Taking Care of Business
By the time OscarDe La Hoya steps into the ring in Las Vegas next May to defend his WBC superwelterweight championship against Floyd Mayweather Jr., it will have been ayear since his last fight. His enormous purses aside, you may well ask, Is thisany way to make a living?
Actually, no. As it was for George Foreman, that other boxer-entrepreneur,before him, fighting has become more of a hobby than a livelihood for De LaHoya, a sort of vanity project, not unlike his brief, largely forgotten singingcareer. We exaggerate, of course, seeing as how De La Hoya may earn upward of$25 million for his bout with Mayweather. That's not exactly pin money. But,let's face it, the effort--the training and the promotion--are going to beinterfering with his day job.
And not just oneday job, either. De La Hoya has so much going on these days that it's difficultto isolate just one occupation. Land developer, boxing promoter, media mogul,philanthropist--this is a super welterweight with a super welter of interests.He tells people that he's still mostly a boxer and that even this mega-fightwith his nemesis, Mayweather, does not spell the end of his career. Though DeLa Hoya, 33, seemed to be on the way out two years ago, after Bernard Hopkinsdropped him to his knees with a blow to the liver, he claims to have beeninvigorated by his destruction of Ricardo Mayorga earlier this year and wantsto fight beyond next May. But no matter how well he does in the ring, hisbusiness interests will soon dwarf all else. In business terms, his boxingcould become a loss leader.
De La Hoya hasalmost become too big for his own good. Like Foreman, who toyed with a secondcomeback in his 50s but then decided he couldn't afford to take time from hisown business empire to do something as low-paying as box, De La Hoya faces theprospect of pricing himself out of his sport. He still commands the biggestpurses the game can produce--the goal of this promotion is to break thepay-per-view record of 1.99 million buys, each at a probable cost of$49.95--but he must now reckon with a variety of enterprises that require hisattention, most of which offer a bigger future than fighting does.
For those whohave followed De La Hoya's career, this is a startling development, because hewas not very careful with his money coming up, nor was he very interested inanything but the task at hand. At times he spoke dreamily of a career inarchitecture, but otherwise he didn't concern himself with the future, whichdidn't extend much past his next fight. But several years ago, after he met aSwiss banker named Richard Schaefer over a game of golf, he began to redefinehis goals, or rather to expand them. De La Hoya and Schaefer quickly set out tocapitalize on the Mexican-American fighter's celebrity--not just in boxing butin the burgeoning Hispanic market.
Of course thefirst order of business was to extend the boxing franchise, which has been DeLa Hoya's bread and butter since he won an Olympic gold medal at the 1992Barcelona Games. World championships in six classes have earned him millions inpurses and created one of the most familiar names in the sport. But to preparefor the day when he would no longer be a headliner, De La Hoya and Schaefercreated Golden Boy Promotions, gathering select fighters under his umbrella togo after the pay-per-view dollars that promoters Don King and Bob Arum had keptmostly for themselves.
In only a coupleof years Golden Boy has attracted some of the biggest nonheavyweights in thegame and has become more than simply an alternative promoter. Schaefer pointsout that, as the end of 2006 approaches, Golden Boy will have accounted forabout 70% of the total pay-per-view volume in boxing: 2.2 million buys for theyear. "I think we've arrived," says Schaefer. Nearly half of that wasfor De La Hoya's bout with Mayorga, but even so, the fighter has a stablethat's varied and powerful enough to make up for a postretirement shortfall inincome. Among De La Hoya's boxers are 35 current or former world champions, andthey're not just Latino fighters--who constitute the big niche market in boxingthese days. Golden Boy also promotes African-American fighters such as Hopkins,Shane Mosley and Winky Wright (chart, next page).
Golden Boy hasbecome a steady supplier to Telefutura (12 cards), HBO (11) and ESPN (6). Thereason the company has been able to grow, aside from attracting high-profilefighters by word of mouth--"We're spotless," De La Hoya has said,"straight shooters"--is that it's been able to endure low margins ofprofit. Since the "shareholders" are De La Hoya and, to lesser extents,Hopkins, Mosley and Wright, it's much easier to keep plowing money back intothe business, even though it's long been profitable, with revenues well beyond$50 million for 2006.
De La Hoya andSchaefer have ambitions beyond boxing, of course, and these have to do withexploiting the exploding buying power of Latinos in the U.S., who are 44million strong and growing faster than any other segment of the population.Maybe this is easier to recognize in Southern California, where Los Angeleselected a Hispanic mayor, than in other parts of the country, but it stilltakes a little vision to recognize where this demographic is going. And, in anycase, with a reported $500 billion worth of Hispanic buying power (which isgrowing at three times the rate of non-Hispanic spending), it's not like De LaHoya and Schaefer were the only ones to notice.
"This spaceis so underserved," Schaefer said. "You look at Anglos, theAfrican-American markets, there are lots of entertainers, lots of celebrities.Look at the Hispanic market. Give me five people who have both recognition andreach. Edward James Olmos? Who else?"
Uh, Oscar?
So it's theiridea to target several ground-floor industries--print media, land development,food services and financial services--and give them a boost of instantcredibility by applying De La Hoya's name. Take banking. Schaefer has saidthat, of more than 250 banks in California, there is only one that targets theHispanic market. "Do you know that 53 percent of the Hispanics in thiscountry do not have a bank account?" he asked. A Latino consumer-financecompany, which is what Schaefer and De La Hoya are looking to buy into rightnow ("a regional roll-up," Schaefer said), might seem all thefriendlier to such newbies, what with a barrio-boy-made-good legitimizing itwith his endorsement.
"To a largeextent," said Schaefer, "Oscar has become the face of Hispanics."With that in mind, De La Hoya and Schaefer are seeking entry into otherbusinesses as well. "We want a diversity of revenue streams, sports otherthan boxing, entertainers other than athletes," Schaefer asserts.
De La Hoya hasbeen using his estimated $150 million in personal wealth the old-fashioned way,too: buying and selling land. Last year he announced a partnership with a LosAngeles developer to invest $100 million in housing and commercial propertiesin Latino communities. De La Hoya took profits on his minority ownership of theBarneys building in Manhattan, but he has entered into deals on eight otherdevelopments under construction around the country. His own Golden Boy Buildingin Los Angeles, a 12-story office building on pricey Wilshire Boulevard, hasseen rents more than double since De La Hoya became its majority owner a yearago. And it's 98% leased.
The fighter alsohas been bucking the trend by buying into newspapers--six Spanish-languagedailies across the U.S.--believing that the Hispanic market still favors theprinted page over the Internet.
The comparisonwith Magic Johnson, who has built a business empire with a special focus onminority customers, is apt, and De La Hoya has acknowledged the inspiration."He's a tremendous role model for any athlete who wants to be anentrepreneur," the fighter says of the former NBA star. But De La Hoya saidthere is a difference between his projects and Johnson's, and it's more thanthe difference in the two men's ethnicities. "This is my money," hesaid.
He expects it tocome back to him, though, as the Hispanic demographic more fully enjoys itseconomic strength. "They're spending the money," De La Hoya said of hisfellow Latinos. "Sometimes money they don't have. There is no hesitation tobuy a car, the first home, to invest. The growth, the spending power, it'smind-boggling."
But De La Hoya isnot just about the making and taking. As he's matured, he's developed aphilanthropic streak. He donated $1 million and paid another $7 million forland to establish a charter school, Animo High, in East L.A. The investment hasbeen paying off in superior test scores.
And De La Hoyahas become involved with White Memorial Hospital in East L.A., donatingmillions to a cancer center he established. (His mother, Cecilia, died of thedisease there.) Once involved, he continued with donations of several millionmore to help with neonatal intensive care and a maternity and deliverycenter.
Although De LaHoya spends more and more time in Puerto Rico with his wife, Millie, and their11-month-old son, Oscar Gabriel, he is not at all an absentee owner, content tolet his partner orchestrate the deals, according to Schaefer. "He walksevery piece of land," Schaefer said, "goes over every deal. He knowshow to work a deal and how to sign one. He really gets it. He's theboss."
If so, he's goingto be a slightly distracted boss in the next few months, as the promotion forhis fight against Mayweather gears up. He might as well enjoy this distractionwhile he can--while he can still afford to, that is.
RING TALES
Read more aboutboxing, including the latest fight results and rankings, at SI.com/more.
Oscar Winners
De La Hoya's Golden Boy Promotions represents some oftoday's top ring draws
BERNARD HOPKINS, 41
Philadelphia, Middleweight, 47-4-1
Hopkins's plan to retire changed after his big winover former light heavyweight champ Antonio Tarver in June. Now Hopkins hasbigger fish to fry: Despite never having fought at more than 174 1/2 pounds, hewants to get up to 200 and fight for a heavyweight title.
SHANE MOSLEY, 35
Pomona, Calif., Light Middleweight, 43-4-0
A world champ in three weight classes who beat De LaHoya in 2000 and '03, Mosley has become a business partner of his former foe.Having pummeled Fernando Vargas in July, Mosley said he plans to drop down towelterweight and consider his options.
OSCAR DE LA HOYA, 33
Los Angeles, Super Welterweight, 38-4-0
The Golden Boy is still the top earner in his stable.Witness the huge payday--a potential $25 million--in store as he prepares tofight Floyd Mayweather Jr. in May, with a chance to establish himself as thesport's best pound-for-pound fighter.
DEMETRIUS HOPKINS, 26
Philadelphia, Light Welterweight, 25-0-1
The Gladiator, who trains with his uncle Bernard, hadan amateur record of 125--11 and was national Golden Gloves champion in 1999.Last month he won an IBF title-elimination fight against Rogelio Castaneda Jr.to qualify for a shot at a major belt.
MARCO ANTONIO BARRERA, 32
Mexico City, Super Featherweight, 63-4-0
A fan favorite after his electrifying trilogy againstErik Morales, Barrera ignited a new rivalry this year with two controversialdecisions over Rocky Juàrez. Barrera appears to be on a collision course tofight Manny Pacquiao, by whom he was TKO'd in 2003.
VICENTE ESCOBEDO, 25
Woodland, Calif., Lightweight, 12-1-0
A 2004 U.S. Olympian, Escobedo has climbed the proranks quickly with a mix of power and technical proficiency. He suffered hisfirst professional loss last April but then hired Hall of Fame trainer FreddieRoach and won his next three fights.
KASSIM OUMA, 27
Kampala, Uganda, Light Middleweight, 25-2-1
De La Hoya forked over a $400,000 bonus last year tosign the indefatigable Ouma, who holds the CompuBox record for most punchesthrown in a 10-round fight (1,331). On Saturday, Ouma will challenge JermainTaylor for the WBC and WBO middleweight belts.
WINKY WRIGHT, 35
St. Petersburg, Middleweight, 51-3-1
Winky Promotions announced an alliance with Golden Boyin July, after Wright lost some of his mojo by fighting to a draw againstJermain Taylor in June. But Wright's decisive win over Ike Quartey lastSaturday vaulted him back to the top of the division.
De La Hoya gathered select fighters under his umbrellato go after the PAY-PER-VIEW DOLLARS that promoters Don King and Bob Arum hadkept mostly for themselves.
"To a large extent," said Schaefer, "Oscarhas become THE FACE OF HISPANICS. We want a diversity of revenue streams,sports other than boxing, entertainers other than athletes."
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Photograph by Manuello Paganelli
FASHIONPLATES
De La Hoya will trade his business suit for boxing trunks to climb into thering with Mayweather (right) in May.
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[See Caption Above.]
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ABOUT-FACE
De La Hoya turned Mayorga's head with a stiff right during a decisive victoryover the rugged Nicaraguan last May.
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TEDDY BLACKBURN/REUTERS
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IN THEPINK
Mayweather (right) easily outpointed Carlos Baldomir last month and now awaitsa showdown with the Golden Boy.