Golden Boy Promotions Suspended By NY Commission

By George Kimball

NEW YORK --- In recent years Golden Boy Promotions’ relationship with the boxing world has often seemed a case of the tail wagging the dog. Between an ever-expanding client list, a cozy relationship with HBO, the nation’s most powerful cable conglomerate, and institutional control over ratings and even “championships” through its ownership of the onetime “bible of boxing,” The Ring, the multi-tentacled Las Vegas-based company has increasingly appeared to call the tune for U.S. regulatory bodies as well, cajoling GBP-friendly state commissions and bullying those displaying a more independent streak.

But last week one of them bared its own teeth. The 90 year-old New York State Athletic Commission has placed Golden Boy on suspension, meaning that the firm, its Teutonic CEO Richard Schaefer, and its figurehead and namesake Oscar De La Hoya have been indefinitely barred from conducting business in the Empire State.

The unprecedented action was taken after a Friday hearing, which found Golden Boy guilty of deceptive and fraudulent practices in direct violation of the federal Muhammad Ali Act, in connection with the May 15 Amir Khan-Paulie Malignaggi card at the Madison Square Garden Theatre.

The disciplinary action came as a result of some creative accounting with the co-featured bout of that night’s show, in which Kansas prospect Victor Ortiz won a unanimous decision over 38 year-old former lightweight champion Nate Campbell. Although HBO had agreed to underwrite a total purse of $750,000 for the fight, Campbell was paid just $125,000, Ortiz ($100,000) even less. The half-million dollar discrepancy was apparently concealed from both of the boxers, and, had Golden Boy had its way, would have been concealed from the NYSAC as well, but unlike some of its brethren commissions, New York refused to roll over and play dead.

The Ali act prohibits concealing such usurious arrangements from the hired help – ie, the boxers; moreover, to be in compliance with the statute, Golden Boy would have had to file the contractual particulars with either the NYSAC or with the Association of Boxing Commissioners. It did neither, and further incurred the wrath of the commission by ignoring repeated demands for the paperwork.

What happened to the missing half-mil remains a matter of conjecture, but there are really only three possibilities, in my opinion.

One, obviously, is that Golden Boy simply skimmed the money off the top and lined its own coffers.

Another is that Golden Boy, which had earlier poached, in the opinion of some fight game insiders, Ortiz and Campbell from their previous promoters, used the part of the windfall produced by short-changing the fighters to pay reparations to Bob Arum (Ortiz) and Don King (Campbell). If that was indeed the case, money used to stave off potential lawsuits is supposed to come from the promoter’s end, not by dipping into the boxers’ purses.

The third possibility is that Golden Boy had so overreached in its guarantee to Khan (on a night when there were nearly 1,000 unsold seats in the Theatre) that they made up the difference by diverting two-thirds of the intended Ortiz-Campbell purse to keep the Boy from Bolton happy. Should that prove to be the case, the New York suspension could only be the beginning of Golden Boy’s worries: Golden Boy’s contract with DiBella Entertainment for the Khan-Malignaggi main event called for a 60/40 split of all such revenues.

If it were proven that the missing money was funneled straight to Khan, and concealed from Malignaggi and DiBella, it could well expose Schaefer and Golden Boy to criminal charges.

Whatever the purpose of the manipulation of the Ortiz-Campbell purse might have been, it seems inconceivable that the deceit could have taken place without HBO’s knowledge, but – even though they bankroll Golden Boy’s shows and exercise the right of approval in selecting opponents – the network is technically not a “promoter” and is hence not subject to the provisions of the Ali act.

By the same token, it seems extremely unlikely that the skullduggery could have taken place without some complicity on the part of Shelly Finkel, who was both Ortiz’ de facto manager and a Golden Boy consultant. Even though Ortiz’ name is included on the client list posted on his website, Finkel is technically an “advisor” and not a manager, and hence not subject to the normal constraints imposed by the Muhammad Ali act.

GBP was already in hot water with the New York commission as a result of the unseemly riot perpetrated by an army of Khan supporters who invaded the May 14 weigh-in, conducted at the Essex House on Central Park South. Although attendance at the weigh-in was supposed to be limited to NYSAC officials, the fighters and their camps, and the press, it seemed plain enough that the presence of an extra hundred or so hooligans had been encouraged by Golden Boy. Although Schaefer claimed to Chairman Melvina Lathan that he had no idea where the interlopers came from, Golden Boy had in fact stationed a pair of bikini-clad Tecate Girls to hand out hundreds of souvenir boxing-glove key-chains at the weigh-in.

Arranging safe passage to the weigh-in for the members of Khan’s Army – and even lying about it after the fact – might have gotten Golden Boy slapped around a bit by the commission, but a tongue-lashing and perhaps a modest fine would have been the end of it. Given the magnitude of the irregularities which subsequently came to light, Golden Boy’s part in the weigh-in fiasco was never even addressed at Friday’s hearing.

The sanctioning of Golden Boy was defined as an “administrative suspension” in details that have already been forwarded to FightFax. Other state regulatory bodies are not automatically obligated to reciprocally honor the New York action. Rather, states entertaining requests for dates from Golden Boy are supposed to contact the NYSAC for an explanation of the particulars, after which they determine their own course of action.

Although some jurisdictions may cite the New York example and think better of approving future Golden Boy shows, the expectation is that in states where Schaefer & Co. already exert a profound influence, the suspension will not be an impediment. But Golden Boy has been put on notice that its days functioning as a law unto itself may be numbered.