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13 NOVEMBER 2018

 

The Future of Boxing and the Internet




By Thomas Hauser

The major media has largely abandoned boxing. Twenty years ago, virtually every big-city newspaper had a writer whose primary responsibility was to cover boxing. Now some newspapers haven't staffed a fight since Lewis-Tyson. Many newspapers don't even print the results of championship fights anymore.

As the major media has marginalized the sweet science, the Internet has stepped into the void. Boxing's power brokers would like to see coverage of their fights in the New York Times or Sports Illustrated. But they can't get it, so they go to the Internet.

"Boxing," says Jay Larkin of Showtime, "is on life support, and the Internet is the IV-line that's keeping it alive."

It has been said that boxing is such a chaotic mess that it belongs on the Internet. Be that as it may, it's clear that no other sport is as interwoven with the Internet as boxing. The medium has become critical to the sport's ability to hold onto its current fan base and attract the next generation of boxing enthusiasts.

The primary role of the Internet in boxing today is as an information medium. It's the most important vehicle for fans to collect data and also the primary means of communication within the boxing industry. The first thing that many people in boxing do when they settle down to work in the morning is go online to one or more websites. The Internet has become boxing's equivalent of Variety and Backstage.

Overall, boxing is covered well on the Internet. Promoters, sanctioning organizations, television networks, even fighters, have their own websites. But the key components of Internet boxing coverage are the many independent sites. There's an immediacy to their reporting. Links to the mainstream press allow fans to read virtually every print article about the sport on the day it's published. And most important, virtually every big story about boxing in the past few years has broken on the Internet and been covered more comprehensively on the Internet than in the mainstream press.

Boxrec.com is an invaluable resource when it comes to verifying the records of fighters and their past opponents. Boxingtalk and Cyberboxingzone are two more of many sites that have carved out a niche. But in recent years, four websites have separated themselves from the pack.

Internet statistics are unreliable due to technological variations [e.g. some sites measure pop-up ads as hits] and puffery [i.e. exaggeration and outright lies]. However, everyone agrees that Fightnews.com is the most heavily-trafficked boxing website. There's little depth to much of its reporting, but the site serves as a useful ticker for each day's events.

TotalAction is the creation of Charles Jay, who has been involved with boxing for two decades as a writer, promoter, matchmaker, and booking agent. "The concept behind TotalAction," says Jay, "is to provide a sports and gaming portal with a lot of links." The Fight Page at TotalAction does just that. It's the best boxing links page on the Internet. Also, in May 2002, Jay began crafting a series of investigative articles under the heading Operation Clean-Up. Seven months later, Operation Clean-Up #2 followed. These articles offer a comprehensive look at many of the problems that ail boxing today.

Maxboxing went online in March 2001. Its principals are Gary Randall, Doug Fisher, Tom Gerbasi, and Steve Kim. The site offers features written by a staff of twenty. But as Randall notes, "The bells and whistles of Maxboxing are our videos. Ninety percent of our users have DSLs or cable modems, and we give them what they want."

Secondsout has extensive feature writing and particularly strong European coverage. It's the creation of English businessman Robert Waterman, who says of his venture, "I was more of a fan than in the boxing business. And I was disenchanted with the quality of information that was available about boxing, so I decided to set up a website."

Secondsout was launched on July 11, 2000. "We had very good traffic in Britain from the start," Waterman remembers. "But our penetration in the United States was weak. So to improve our demographics, we acquired Boxingpress.com, which was eventually folded into Secondsout."

Secondsout now runs first in the United Kingdom and second to Fightnews in the rest of Europe in terms of visitor traffic. Maxboxing runs second in the United States. Meanwhile, since starting the website, Waterman has begun to promote and manage fighters and has a multi-fight contract with the BBC. But his agreement with the Secondsout editorial board stipulates that he has no editorial control and can only intervene to alter the content of an article if there are legal considerations such as the fear of libel.

The current FBI probe of boxing is a defining time for boxing coverage on the Internet. The mainstream press has largely ignored, and sometimes misreported, the burgeoning scandal. That means there's a huge opportunity for Internet boxing writers. But with opportunity comes responsibility, and that highlights a major problem.

There's little quality control on the Internet. Newspapers have editors; television has producers. All major media have fact-checking procedures that, in theory, ensure accuracy and fairness. But there are virtually no checks and balances with regard to Internet writing. People can put whatever they want online.

Thus, the Internet today features some of the best and the some of the worst commentary imaginable on boxing. The quality of online coverage varies from careful fact-based ethical reporting to reckless uninformed irresponsible tirades fueled by personal bias.

By and large, Internet writers care about their work. They take their jobs very seriously. But just because someone is a diehard fan doesn't mean that he or she has the skill, training, and ethics to be a good writer. And some boxing websites seem to live by the creed, "Punish your enemies; reward your friends; get it out first and forget about the other side."

Also, there's another problem associated with boxing websites. Economics.

Boxing is the only major sport in the world where anyone can just walk in and be a player. Do you want to be a promoter? A manager? A trainer? A fighter? No problem.

It's the same with starting an Internet boxing website. The barriers to entry are negligible. In some cases, a site can be established for less than a thousand dollars. That means there's a glut of websites on the market competing for the same scarce dollars.

A question often asked of boxing website entrepreneurs is, "Where does your revenue come from?" Often, the answer is, "There is no revenue."

Five years ago, most people thought that the way to make money from a boxing website was through advertIsing. But virtually no one believes that now; and at present, no one is getting rich by running a boxing website. The advertising simply isn't there. Nor has the Internet proven effective in selling fight tickets or boxing-related merchandise. Often, the cost of servers (especially broadband capacity) outstrips revenue. And that's not even factoring in the cost of whatever staff exists.

In October 2001, Maxboxing activated a membership program that costs subscribers five dollars a month. Best estimates are that the site now has 4,000 members. But because of the nature of its content, Maxboxing has higher fixed costs than its competitors.

Thus, the most significant economic attribute of the Internet is its potential to become a platform for pay-per-view boxing. It's possible that, in the not-too-distant future, the Internet will become part of the fabric of boxing in the same way that cable television is now.

The first significant fight to be televised on pay-per-view was Buster Douglas versus Evander Holyfield on October 25, 1990. That fight was distributed to public venues via closed-circuit and to private homes via pay-per-view. Then, on April 19, 1991, HBO launched TVKO with Holyfield versus George Foreman. At the time, 16,500,000 homes in the United States were addressable by pay-per-view.

Holyfield-Foreman got people's attention. From a fan's perspective, championship fights could now be viewed in the comfort of one's home with a clear picture and audio that could be heard. Multiple viewers were able to enjoy the show for the price of one. And most significantly from the industry's point of view, Holyfield-Foreman engendered 1,400,000 pay-per-view buys, which translated into $53,000,000 in revenue. "That night," says Mark Taffet of HBO, "was the night the pay-per-view business was born."

There are now 50,000,000 homes in the United States that can be accessed by pay-per-view. 30,000,000 of these are addressable by cable and 20,000,000 by satellite television.

When pay-per-view sales first became a significant factor in the boxing industry, HBO, Showtime, and other distributors (such as promoters) would negotiate separate deals with each cable system operator to determine a suggested retail price, cooperative advertising, and the division of revenue for each fight. Then, over time, two entities emerged as clearing houses through which pay-per-view telecasts were distributed to cable system operators. One of these clearing houses was Viewers Choice, which transmitted the signal for fights and negotiated a package deal on a fight-by-fight basis on behalf of the cable system operators it represented. The other was Request Television, which simply transmitted the signal and let the distributor negotiate terms directly with each individual cable system operator. Ultimately, Viewers Choice and Request merged to form In Demand. In Demand is the conduit through which virtually all cable-TV pay-per-view telecasts now flow to cable system operators.

Meanwhile, over the years, local cable system operators have merged to form communications giants. Three major multi-system operators now control 22,000,000 of the 30,000,000 homes addressable by cable for pay-per-view telecasts in the United States. They are Comcast (12,000,000 homes), Time Warner Cable (6,000,000), and Cox Communications (4,000,000). Cablevision is a distant fourth with 2,000,000 homes.

Cablevision is the only major cable system that does not book pay-per-view telecasts through In Demand. All totalled, In Demand serves ninety percent of the addressable pay-per-view homes in the United States. More than coincidentally, In Demand is owned by Comcast, TimeWarner, and Cox Communications.

Direct-TV and Echo Star transmit pay-per-view content via satellite and are analogous to the cable companies, not In Demand.

In Demand represents its own interests and, to a lesser degree, the interests of the cable system operators. When a distributor negotiates with In Demand, it negotiates (1) satellite time for the event in question; (2) a suggested minimum retail price; and (3) the marketing support to be provided by cable system operators. But the most significant part of the negotiation is how the suggested retail price will be divided among In Demand, the distributor, and cable system operators.

As a general rule, where pay-per-view fights are concerned, the cable system operator receives fifty percent of gross revenue from pay-per-view sales. In Demand gets ten percent, and the program provider gets forty percent. That's subject to negotiation. The bigger a fight, the more leverage the distributor has. Every cable system operator wanted Lennox Lewis versus Mike Tyson. "Latin Fury" is a tougher sell. But if a program provider tries to cut In Demand's share too much, In Demand counters with other terms that the provider can't live with.

In most areas of the United States today, cable television is a regulated monopoly. The primacy of In Demand has implications that go far beyond boxing and raises the spectre of serious antitrust violations at the heart of how the cable-television industry operates today.

"In Demand is an illegal monopoly," says Don King. "Everybody in the business knows that."

He might be right. And if boxing promoters are looking for a common cause, they might look more closely at how In Demand controls their access to the public. It should also be noted that In Demand raises issues of vertical as well as horizontal monopolization. For example, HBO Pay-Per-View (which is part of Time Warner) bankrolls and distributes fights. The fights are sold to cable system operators through In Demand (which is owned in significant part by Time Warner). Then the fights are seen by much of the country on Time Warner Cable.

And . . . oh, yes. In Demand insists upon the restriction of Internet transmissions in virtually every pay-per-view contract that it negotiates with HBO and Showtime. That, in turn, limits the financial incentive that might otherwise exist for third parties to develop the technology and marketing programs necessary to sell boxing over the Internet.

The Internet has the potential to significantly change the business of boxing. The sweet science has long been on the cutting edge of technological innovation. It was the first sport to capture the imagination of the American people on radio. Interest in newsreel footage, television, closed-circuit television, and pay-per-view followed. The transmission of fights on the Internet might be next.

In ten years, it will be common technology for people to watch Internet transmissions on their television sets through high-speed modems with the same picture quality as they enjoy now on regular television.

At present there are roughly 100,000,000 households in the United States. Only half of them are addressable by pay-per-view. The Internet has the potential to reach the other 50,000,000. Moreover, cable television companies are regional, no matter how large their region might be. The Internet is global. More than any other communications medium, it constitutes a truly worldwide market.

There are significant technological hurdles to surmount before pay-per-view boxing on the Internet becomes a profitable reality. But the Internet has revolutionized facets of American life ranging from the sex industry to politics.

In the past, boxing promoters have often been responsible for technological advances in marketing their sport. And Internet boxing is of great potential interest to promoters. It would cut production costs. It would break the stranglehold on pay-per-view transmissions currently enjoyed by In Demand, Direct-TV, and Echo Star. And most significantly, it would eliminate the need for local cable-system operators. That means there would be no need to pay the cable companies fifty cents on every dollar of pay-per-view revenue.

No wonder Comcast, Time Warner, and Cox seem adverse to Internet boxing.

If pay-per-view boxing on the Internet becomes a reality, HBO, Showtime, ESPN, and other big players can be expected to dominate. But there will always be niche players. Virtually any promoter would be able to disseminate a pay-per-view show. That, in turn, could help small promoters break even or make a small profit on local cards. And some of the better-known boxing websites might be acquired at a handsome profit for their owner-investors.

In other words, the Internet has the potential to help boxing survive and prosper. To make money from the sweet science, one should go where the fans are. And right now, that's on the Internet.

Award winning author Thomas Hauser can be reached at
thauser@rcn.com



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