Wow, here's a VERY detailed article on how this all came to fruition. I can't believe that after all HBO/Top Rank had been through, that nobody from HBO came to the funeral of Arum's son nor Arturo Gatti's funeral.
How HBO Lost Manny Pacquiao
Mon 24-Jan-2011 03:11
By Thomas Hauser
Manny Pacquiao is going to Showtime. On January 20th, Top Rank (Pacquiao’s promoter), Showtime, and CBS put the finishing touches on a three-way contract that calls for the May 7th fight between boxing’s reigning pound-for-pound king and Shane Mosley to be televised on Showtime Pay-Per-View.
Showtime and CBS (a terrestrial network) are owned by the media conglomerate CBS Corporation.
Pacquiao’s last eight fights have been televised by HBO-PPV.
Top Rank CEO Bob Arum has long been intrigued by the idea of synergy between a pay-per-view provider and a terrestrial network. He‘d explored the idea in the past with Showtime and CBS but nothing came to fruition.
The idea was revisited in December 2009, when Arum, Les Moonves (CEO and president of CBS Corporation), and attorney Allen Grubman were vacationing with their wives in Mexico. It percolated while Pacquiao fought Joshua Clottey (March 13th) and Antonio Margarito (November 13th) on HBO-PPV. Then Moonves made an oral presentation to Arum outlining what CBS and Showtime were prepared to offer.
Among the things that Moonves ultimately promised were 1) advertising spots and live cutaways during the NCAA men’s basketball championship tournament and other CBS Sports programming in April and the first week of May, 2) a four-part countdown series, with either the first or last episode airing on CBS in prime time on a Saturday night, 3) appearances for pay-per-view undercard fighters (such as Christy Martin) on CBS talk shows 4) a May 1st 60 Minutes segment following up on the Pacquiao feature that aired last March, and 5) hosting the CBS Morning Show in Las Vegas on Monday through Friday of fight week.
Also, when HBO produces a 24/7 series to engender pay-per-view buys, the promoter bears the cost of production. That’s true here too. But Top Rank will be given commercial time on CBS during the shows that it can sell to partially underwrite its costs.
In sum, the move to Showtime isn’t simply about choosing one pay-per-view platform over another. It’s about getting the broadest possible exposure for Pacquiao, Pacquiao-Mosley, and boxing. Manny is Top Rank’s vehicle for breaking down some of the barriers that have separated boxing from large segments of the American public for the past 30 years.
Showtime and CBS offered Top Rank more than HBO did. Not more up-front dollars. The currency here is awareness and exposure, 115,000,000 homes in the United States to promote the fight. That contrasts favorably with the 30,000,000 households that subscribe to HBO.
However, sources say that Arum’s disenchantment with the leadership at HBO Sports also played into the decision-making process. Arum was angered by what he felt was a tilt by HBO in favor of Golden Boy and Al Haymon. In recent years, HBO has turned down opponents for Kelly Pavlik and Miguel Cotto (two elite Top Rank fighters), who were just as good as the opponents that the network accepted for boxers who were promoted by Golden Boy and managed by Haymon. The maneuvering by HBO that hastened the transit of Floyd Mayweather Jr. from Top Rank to Golden Boy infuriated him. And he was saddened by the fact that no one from HBO attended the memorial service in Seattle in honor of his son, John (who was killed in a mountaineering accident last August).
“No one – and I mean, no one – has had a longer relationship with HBO than Bob,” notes one observer, who has been a friend to both Arum and HBO Sports President Ross Greenburg over the years. “That Ross and Kery [Davis, HBO Sports Vice President of programming] didn’t get on a plane was callous and disrespectful.”
Planning for 2011 brought more of the same. Arum suggested putting Yuriorkis Gamboa on a February 26th HBO telecast. Davis told him that HBO was holding that date for a possible fight between Shane Mosley and Andre Berto and asked if Top Rank would schedule Gamboa for March 5th. Arum said yes. Then he read on the Internet that HBO had given the March 5th date to Golden Boy for Saul Alvarez.
Arum told Greenburg that he planned to promote an interim fight for Miguel Cotto (possibly against Vanes Martirosyan) on March 12th and match Cotto against Antonio Margarito in June. Ross said that he wasn’t interested in the first Cotto fight and Arum should do it on his own as an independent pay-per-view show. Then HBO announced that it was holding March 12th for a Sergio Martinez fight (which would cut into Arum’s pay-per-view buys). Davis told Arum, “We didn’t know that you were going on March 12th.”
When crunch time came, there was no reservoir of good will for HBO to draw upon.
Meanwhile, it was known to many in the boxing industry that Arum and Moonves were talking. And Top Rank President Todd DuBoef had made no secret of his interest in exploring options other than HBO for Pacquiao. Indeed, last June, DuBoef stated, “I should have explored making a deal with ESPN for Pacquiao-Clottey. HBO brought nothing to the promotion. They wouldn’t even do a 24/7 series. They did The Road to Dallas as a promo piece. One show. ESPN would have given us four ‘Roads to Dallas’ in 90,000,000 homes. If I had it to do over again, absolutely, I’d discuss Pacquiao-Clottey with ESPN, with CBS, with Showtime. I’m not looking to rock the boat but I am looking to grow the audience.”
A visionary television executive would have taken DuBoef’s remarks as a signal to seriously explore the possibility of synergy between HBO and either TNT or TBS (which are in 90,000,000 homes and, like HBO, are part of the Time Warner empire). Greenburg didn’t do that.
Moreover, as negotiations between Top Rank and CBS Corporation were reaching a critical juncture, HBO Sports essentially shut down for an extended Christmas holiday.
“They knew they didn’t have Pacquiao-Mosley locked in,” Arum says. “I kept waiting for a serious proposal from them that would address my concerns and it never came. Ross was off skiing, I guess.”
Finally, word filtered back to HBO that the network might really lose Pacquiao-Mosley.
On Wednesday, January 5th, Greenburg telephoned Arum and told him that he wanted to fly to Las Vegas as soon as possible to meet with him. They agreed to have dinner on Monday, January 10th, just the two of them.
DuBoef was scheduled to meet with Showtime boxing tsar Ken Hershman in New York earlier in the day on January 10th to finalize a term sheet. HBO had become Arum’s safety net in the event that negotiations with CBS and Showtime failed.
On January 7th, Arum called Greenburg and cancelled their Las Vegas dinner engagement. His reason, unstated, was that he felt it would be wrong to have Ross make the trip, given the fact that he hoped to close a deal with Showtime and CBS. The promoter suggested that, snow permitting (six-to-12 inches were predicted for the following Tuesday), they meet for dinner in New York on Wednesday, January 12th.
The snow didn’t permit. Arum’s dinner with Greenburg was rescheduled again, this time for Tuesday, January 18th.
By Friday, January 14th, Top Rank’s deal with Showtime had been finalized. A few issues with CBS needed to be nailed down. “I have to know that CBS will deliver what it’s promising,” Arum told one confidante. “I don’t want ‘best efforts.’ I want a full contractual commitment.”
Arum arrived in New York on Monday, January 17th. The following night, he and Greenburg had dinner at San Pietro (an upscale Italian restaurant).
“Ross thinks he has to act fast because the ship is getting ready to sail,” one observer of the unfolding drama said before the two men met. “Trust me; the ship has sailed.”
According to one report, the Arum-Greenburg dinner was civil. Bob told Ross that there were a number of reasons for a move to Showtime and CBS but the primary reason was his desire to give boxing a presence on terrestrial television. He also cited his obligation to Pacquiao and Mosley to maximize their income from the fight. “If it was a question of choosing HBO or Showtime,” Arum said, “I’d choose HBO. But CBS brings an entirely new element into the equation.”
“Then at the end,” the source recounts, “things fell apart. As they were getting ready to leave the restaurant, Bob told Ross what some of his grievances were, including the fact that HBO had played the situation with Floyd Mayweather Jr. in a way that was calculated to take Floyd away from Top Rank. Ross said, ‘That wasn’t me; that was Seth [former HBO Sports president Seth Abraham].’ Arum told him, ‘No; that was you. Seth was gone by then.’”
“Ross is trying to play chess with Arum,” the source concluded, “but he’s moving his pieces like they were checkers.”
On Wednesday, January 19th, Arum hosted a press conference at B.B. King’s in New York to formally announce a March 12th fight between Miguel Cotto and Ricardo Mayorga.
Mayorga is promoted by Don King and there was a lot of talk about the reunion of the two promoters being the equivalent of a Hollywood buddy movie. Think Bob Hope and Bing Crosby, Oscar Madison and Felix Unger, or Thelma and Louise.
More significantly, Cotto-Mayorga will be on Showtime-PPV. Among other things, it’s a trial run to get the glitches out of the system for Pacquiao-Mosley.
Ken Hershman was in Los Angeles with Todd DuBoef, putting the finishing touches on what Arum hoped would be the CBS portion of the Pacquiao-Mosley television contract. In his place, Showtime upped the ante. Arum proudly told the assembled media, “To demonstrate Showtime’s commitment to boxing, we don’t have the head of the sports department here today. We don’t have the head of pay-per-view. We have the actual head of Showtime [CEO Matt Blank].”
After the press conference, Arum walked several blocks from B.B. King’s to HBO, where he met for two hours with Greenburg and HBO Senior Vice President Mark Taffet (who oversees the network’s pay-per-view programming). Following that meeting, Ross asked Bob to accompany him to Richard Plepler’s office.
Plepler is the president of HBO. He’s liked and respected throughout the company.
Arum was impressed with Plepler but at that point, there was nothing HBO could do to halt the tide of events.
“A ‘Hail Mary’ pass might work when you’re down by six points at the end of the game,” one source who was following the negotiations noted, “but it won’t work if there are ten seconds left on the clock and you’re behind by three touchdowns. What’s HBO going to do? Offer Bob a 36/7?”
On Thursday, January 20th, Arum was in Puerto Rico for another Cotto-Mayorga press conference. Meanwhile, contracts with CBS Corporation were finalized in Los Angeles.
On Friday, Arum returned to New York. Early in the afternoon, he telephoned Greenburg and told him that the deal was done and he was taking Pacquiao-Mosley to Showtime and CBS. Greenburg offered a curt response and hung up.
Ross told several staff members about the development. Then he called Al Haymon, Golden Boy CEO Richard Schaefer, and a few others, saying that he looked forward to continuing to do business with them in the future.
“Ross was very dejected,” one person said of their conversation. “I felt sorry for him.”
As for what comes next, the first thing to note is that, on its face, the Top Rank-Showtime-CBS alliance is largely about one fighter (although Miguel Cotto is also in the mix).
Fighters move from Showtime to HBO all the time. Naseem Hamed, Ricky Hatton, and Joe Calzaghe all developed on Showtime as attractions in the United States. Then they jumped ship. So did Chad Dawson.
But the move of Pacquiao to Showtime-PPV for at least one fight symbolizes the drift at HBO Sports. The HBO Boxing brand has been in decline for almost a decade and there are more storm clouds on the horizon.
Over the years, this writer has referenced the issues facing HBO Sports on numerous occasions. Non-competitive fights, low ratings, inconsistent announcing, and stale production values have been ongoing problems.
The network that brought boxing fans the scintillating Gatti-Ward and Barrera-Morales trilogies now can’t even make the first in what would be a trilogy-worthy series of fights.
2011 looks to be a repeat of the erratic programming that has typified HBO boxing in recent years. A lot has been made of the upcoming bout between Timothy Bradley and Devon Alexander. In a vacuum, it’s an intriguing fight. Bradley and Alexander are good young fighters but HBO is spending close to $4,000,000 on the license fee, marketing, and production costs for a fight that most likely will draw a poor rating because only hardcore boxing fans are interested in it. Also, styles make fights and this could turn out to be a boring styles match-up.
Worse, HBO has mortgaged its future to make Bradley-Alexander. Each fighter (in tandem with his respective promoter) has been guaranteed a second fight for a license fee of at least $3,000,000. This means that, unless their first encounter warrants a rematch, three fights involving these two boxers will command almost 25% of HBO’s license fees in 2011.
Some of HBO’s problems also flow from what is perceived by many to be a culture of disdain within the sports department. There are many good caring people at HBO Sports but there’s a widespread feeling within the boxing community that too many of those at the top of the pyramid are aloof and look down their noses at “boxing people.”
“The guys running the show now,” says former 140-pound champion Paulie Malignaggi, “don’t care that every decision they make has the power to turn someone else’s life right-side up or upside-down. The way they make fights, sometimes it feels like they’re playing chess and all we are is pawns. They don’t think twice that someone else’s livelihood is on the line. The only fighter they’ve shown any real respect for since I’ve been in boxing is Oscar [De La Hoya].”
No one from HBO attended Arturo Gatti’s funeral in Montreal.
Former middleweight champion Kelly Pavlik fought seven times on HBO. In April 2010, he lost his title to Sergio Martinez. Late last year, he spent several months in rehab for drinking-related problems. No one from HBO wrote to Kelly to wish him well while he was undergoing treatment.
“They don’t care about anybody but themselves,” a member of Team Pavlik grumbled. “They don’t even pretend to care.”
Often, when HBO executives are onsite for a fight, they’re booked into a hotel other than the fight center. For example, at Pacquiao-Margarito, HBO personnel stayed at The Four Seasons rather than the Gaylord Texan. One week later, fight headquarters for Sergio Martinez vs. Paul Williams in Atlantic City was at Caesars-Bally’s. HBO put its people in The Chelsea. That might mean more elegant surroundings but it’s isolating and symptomatic of a failing that has led to the decision-makers at HBO Sports not being fully grounded in the sport and business of boxing.
“There were a lot of warning signs on Pacquiao,” says one person who followed the negotiations, “but HBO missed them because the guys there don’t have their ear to the ground. By the time they woke up to the problem, it was too late. And there’s an arrogance. It’s like, ‘We’re HBO. We can buy what we want. We’re too big to fail.’ But when they can’t get what they want by throwing money at people, they have no idea how to deal with the situation. Look how helpless they were when they tried to make Mayweather-Pacquiao.”
“Ross and Kery brought this on themselves,” says Arum. “They’re not bad people but they’re in the wrong jobs. Ross is a producer, not a television executive. Kery has no feel for boxing and cares less. And they don’t treat people with respect. Look; I know what HBO has done for Top Rank over the years. If Ross had treated me differently, it would have been very hard for me as a matter of personal loyalty to bring Manny to Showtime and CBS. I carry a lot of Jewish guilt.”
Pat English has represented Main Events for almost 30 years. He’s one of the most respected attorneys in the boxing industry.
“There’s an incredibly high degree of frustration toward the actions of certain representatives of HBO,” English says. “Right now, some promoters have become so angry that they’d just as soon see HBO sink into the sea. There is an element of wanting to see HBO fail. I share some of that resentment but I think that’s the wrong reaction. I want HBO to be successful in boxing. I want Showtime to be successful in boxing. It pains me more than it angers me to see some of the decisions they’ve made at HBO in recent years. I was there [as the attorney for Main Events] during the heyday of boxing at HBO. Unfortunately, those days are past.”
“Can they be rekindled?”
“I think so,” English answers.
“One, they have to regain credibility as decision-makers with the people that they deal with in the industry. The industry as a whole has to perceive that there’s a rational basis for decisions that are made at HBO. And the general perception in the industry now is that there is not.”
“Two,” English continues, “people in the industry have to believe that the individuals with whom they are dealing at HBO are dealing with them honestly. They have to believe what is said to them and that doesn’t exist right now. There is a serious credibility issue at HBO.”
“Three, HBO has to get back an understanding of what its subscribers and potential subscribers want to see. There is a fundamental lack of understanding at HBO that people have to care about the fighters who are on HBO if HBO is going to get good ratings. There should be a premium on fights and fighters that are fan-friendly. There should not be an award for being associated with certain people who are in favor at HBO.”
English was then asked, “Do you think that Ross Greenburg is capable of doing that?”
“I don’t know.”
“What about Kery Davis?”
“Ross’s arrogance led to this,” says a promoter who has done extensive business with HBO. “He fiddled while HBO Sports burned. HBO has the largest checkbook in the business, so he’s used to buying whatever he wants. If Ross had put together a package that gave Manny a platform on TBS or TNT, the fight could have stayed with HBO. But Ross didn’t see the need for that and he isn’t that creative. He’s creative in a production sense but not as a businessman. Ross doesn’t understand boxing as a business or a sport, so he can’t help find ways to make it better. He understands what makes a compelling documentary but not a compelling fight. He has lots of Emmys but Emmys are about art, not business.”
The loss of Pacquiao to Showtime coupled with the decline in ratings for HBO’s boxing programming has sent ripples throughout HBO. There’s a growing feeling internally that the sports department, as presently constituted, will be unable to fully solve its problems.
The point person in any overall evaluation of the situation is likely to be Richard Plepler. In all probability, he would work with Michael Lombardo (president of HBO programming and West Coast operations). Ultimately, HBO CEO Bill Nelson could become directly involved.
In recent years, Plepler has been aware of issues within the sports department but he has had more pressing concerns to address.
In November 2010, after a three-part series about HBO was posted on this website, Plepler had separate meetings with New York City Police Department commissioner Ray Kelly (a former chairman of the New York State Athletic Commission) and Edwin Torres (a retired New York State Supreme Court judge currently serving as a member of the athletic commission) to solicit their thoughts on how to revive HBO’s boxing program.
People who care about boxing hope that Plepler will now become more deeply involved in the situation and cast a wider net. He and Lombardo rebuilt HBO’s programming staff on the West Coast after Chris Albrecht’s departure in 2007. They might decide do the same thing with HBO Sports.
Meanwhile, HBO has to fashion a coherent plan for the future. In some areas, immediate action is required.
The network needs a constructive strategy, not a punitive one. It should not counter-program Pacquiao-Mosley with a “free” fight on May 7th nor should it retaliate against Top Rank.
In that regard, Arum says, “I would hope Ross understands that we’ve approached decisions about Pacquiao-Mosley the same way that HBO makes the decision to not buy some of our fights. I didn’t refuse to do business with HBO because they wouldn’t televise Julio Cesar Chavez Jr. or any number of other Top Rank fights. If we offer a fight to HBO in the future and it meets their criteria, I assume that HBO will buy it. If not, they’ll be short-changing their subscribers.”
Next, HBO has to understand that there are issues here that go far beyond one fighter. HBO survived the loss of Mike Tyson to Showtime in 1995 and it will survive the loss of Manny Pacquiao even if he never comes back. The big prize in many people’s eyes is Pacquiao-Mayweather (if it happens). But keep in mind; Mayweather vs. Oscar De La Hoya engendered a record 2,400,000 pay-per-view buys four years ago and HBO Boxing is worse off now than it was then. It would be a mistake for HBO to focus on Mayweather and Pacquiao-Mayweather to the detriment of other fighters and fights. The most constructive thing that HBO Sports can do to get healthy again is to televise more entertaining fights.
HBO has to explore an alliance with Turner Sports now.
There should be some soul-searching and fence-mending.
Regardless of how HBO reacts, Pacquiao to Showtime is one of the biggest out-of-the-ring boxing stories in a long time and the most significant development in the sport since HBO’s boxing program went into decline. What happens next depends in large measure on whether the tandem of CBS and Showtime is successful in engendering pay-per-view buys.
The target that Arum is pursuing here is the general sports fan and the public at large. But successfully marketing a pay-per-view fight is more complicated than simply getting on-air promotion. There’s a great deal of behind-the-scenes nuts-and-bolts work that has to be done with cable system operators and other entities. HBO does that better than anyone else in boxing. Most of the people at Showtime who did it successfully for Mike Tyson’s fights more than a decade ago are gone. Top Rank has done it with some success (and some failure) for its small independent pay-per-view shows. Pacquiao-Mosley is a far more ambitious undertaking.
If Miguel Cotto beats Ricardo Mayorga on March 12th, Cotto vs. Antonio Margarito on Showtime-PPV is likely to follow. Strong numbers for Pacquiao-Mosley could lead to ABC-ESPN, NBC-Versus, and Fox-FX pairings for similar ventures. That would break HBO’s control over major pay-per-view shows.
In other words, if the Top Rank-Showtime-CBS alliance is successful, it will mark a seismic shift in the boxing landscape. The be-all-and-end-all for fighters will no longer be a fight on HBO-PPV.
When ABC passed on Larry Holmes vs. Mike Weaver in 1979 and HBO purchased the fight, it marked the beginning of the end of ABC’s supremacy in boxing. Pacquiao-Mosley could mark another changing of the guard.
“For far too long,” says Arum, “boxing promoters have been puppets doing whatever HBO tells them to do. At times, I’ve been guilty of that too. But that’s over now. We’re taking back the business from HBO.”
A television network can get into boxing for a minimal investment. This isn’t the National Football League. Two other premium cable networks are currently in discussions with promoters about adding boxing to their programming. Hopefully, Pacquiao-Mosley will lead to the return of boxing to terrestrial television as well.
“I don’t know yet what the ramifications of this will be,” says Pat English. “No one does. If this opens up a new market and helps popularize the sport, it’s a good thing. We have to see how successful it is and how wide-ranging the involvement of CBS in the sport will be after this.”
Whatever happens though, it’s going to be an interesting few months. People who thought that boxing was dead 30 days ago are once again paying attention to the sport.
Dallas Cowboys owner Jerry Jones has one of the keenest business minds in sports. “Don King and I are lucky this guy didn’t get in boxing when we did,” Arum said, last year. “He would have run us both out of the business.”
Earlier this month, Jones spoke publicly about the ongoing National Football League labor negotiations.
“Every place in the world is revisiting how they do business,” Jones said. “Everybody is doing it. It is almost irresponsible not to do it. The time to address the adjustment in your business model is now, not when you are driving off the cliff.”
In recent years, boxing and HBO have been driving toward a cliff. Bob Arum just got out of the car.
Thomas Hauser can be reached by email at firstname.lastname@example.org. His most recent book (Waiting for Carver Boyd) was published by JR Books and can be purchased at http://www.amazon.co.uk/ or http://www.abebooks.com.
Hauser says that Waiting for Carver Boyd is “the best pure boxing writing I’ve ever done.”