The Pugilist

The split which could have huge consequences for boxing

The Pugilist

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Many were quick to hail Richard Schaefer's resignation as the chief executive officer of Golden Boy Promotions on Monday as the end to boxing's ugly and counter-productive "Cold War."

And perhaps Schaefer's departure after a feud with company founder Oscar De La Hoya will signify blue skies ahead for fans, who have been frustrated at the in-fighting that has prevented many appealing bouts from being made between promotional giants Golden Boy and Top Rank.

It's more likely, though, that Schaefer's resignation after nearly 12 years with Golden Boy is going to spark many more legal battles. Things may get worse well before they get better.

In 2000, Schaefer, 52, left a job as the deputy CEO for UBS, the largest Swiss bank, in which he oversaw all of the company's private banking operations in the U.S., to take a job as De La Hoya's manager.

The two were introduced in 1995 by De La Hoya's friend, Raul Jaimes, who is Schaefer's nephew. De La Hoya and Schaefer hit it off instantly, playing golf together and sharing common bonds. By 2000, Schaefer was De La Hoya's manager and by 2002, he'd been appointed CEO of the newly formed Golden Boy Promotions.

In his 12 years, he promoted the card that sold the most pay-per-views (De La Hoya-Floyd Mayweather in 2007, which is at slightly more than 2.5 million sales) and the one that generated the most pay-per-view revenue (Mayweather-Canelo Alvarez in 2013, which generated in excess of $150 million).

He also made Golden Boy arguably the sport's top promoter. He did it by using leverage, first using his relationship with De La Hoya to land an output deal on HBO that gave his company television dates no other company could match.

Later, he leveraged his relationship with Mayweather and powerful manager/adviser Al Haymon to not only land a terrific television deal with Showtime, but also do things like land an exclusive venue deal with the $1 billion Barclay's Center in the New York borough of Brooklyn.

For the first half of his tenure, Schaefer learned the nuances of promoting from Bob Arum and Arum's team at Top Rank. Slowly but surely, though, Arum became Schaefer's mortal enemy, and by last year, he was insistent that Golden Boy would no longer work with Top Rank.

That was fine while De La Hoya was in a rehabilitation center and not involved with the company on even a semi-regular basis. But when De La Hoya completed his rehab stint and decided he wanted to make amends with Arum, Schaefer balked.

Ultimately, that disagreement led to Schaefer's exit. De La Hoya, the company's founder, namesake, president and largest shareholder, favored working with Top Rank again. He made a trek to visit Arum at Arum's Los Angeles home in late April to apologize and repair their relationship.

But Schaefer wasn't in such a forgiving mood and the two, as well as their high-priced attorneys, couldn't work out a settlement satisfactory to both sides.

The dissolution of their partnership leads to several questions that probably won't be answered until the sides are in front of a judge.

Arum, who had grown to despise Schaefer as much as Schaefer hated him, said he welcomed the opportunity to co-promote fights with De La Hoya.

He said despite the rancor and occasional lawsuits over the years, he always maintained feelings for the man he helped to become one of the sport's biggest names.

"Deep down, I've always had a deep bond with Oscar," Arum told Yahoo Sports. "So does Todd [duBoef, his stepson and Top Rank's president]. Todd was just getting into the business when Oscar was coming out of the Olympics and there has always been a bond there.

"I look forward to working with them again. I've always liked Eric Gomez, Oscar's friend who is their matchmaker. He's a terrific young man. This is the start of something good, I think."

Schaefer's future remains in question, as he told Yahoo Sports he's uncertain how he's going to proceed.

Most likely, he has a non-compete clause in his contract that will prevent him from working for another company in the space for a given period of time.

The business side of boxing is as vibrant as it has been in some time, in large part due to Schaefer's success at the helm of Golden Boy. One of his first acts as Golden Boy CEO was to hammer out a deal for a series of fights on HBO Latino. One of his last was to forge a deal with Fox Sports 1 to air weekly Golden Boy-branded boxing shows.

Not long after Mayweather shocked the boxing world by bolting from HBO in February 2013 to sign an exclusive six-fight, 30-month deal with rival Showtime, HBO announced it would no longer broadcast Golden Boy fights.

It seemed as if it would be a killer, but Golden Boy had a magnificent year in 2013 and viewership on Showtime rose significantly.

But part of Schaefer's success came at a cost, though, and the full price of that won't be known for many years. He partnered closely with Haymon and came to favor a heavily athlete-centric business model in which the fighter, such as Mayweather, gets the overwhelming share of the money.

The move made Mayweather rich beyond his wildest dreams – he's been the highest-paid athlete in the world for the last three years, and likely will be again in 2014 – but Mayweather is a unique case with no comparables in boxing.

A promotional company is a business, just like a restaurant or a car dealership or a grocery store. If one, or several, of the employees wind up making 95 percent or more of all of the money, the business won't be sustainable.

Clearly, the athletes deserve to be paid handsomely for their services, and boxers as a whole are grossly underpaid. Mayweather was paid $41.5 million plus a percentage of pay-per-view revenues to fight Alvarez last year. But there was a fighter on that card who made just $1,500.

The overwhelming majority of fighters aren't paid $41,500 a bout, let alone a mind-boggling figure like $41.5 million.

Mayweather has said he's loyal to Schaefer and not to Golden Boy, which has promoted all of his fights since 2007. But a lot of the deals Schaefer did with Haymon for other boxers will now be the concern of Schaefer's successor at GBP.

Right now, few people know which fighters are actually signed to Golden Boy deals. Schaefer admitted to Yahoo Sports earlier this year that some fighters were signed to Haymon managerial contracts as well as to Golden Boy Promotional contracts, while others were simply signed to Haymon managerial deals and Golden Boy just used them on a fight-by-fight basis.

As the CEO, Schaefer had a fiduciary responsibility to Golden Boy. He remains a shareholder and said he wishes the company well, but if it turns out that Haymon insists some of his fighters are promotional free agents, this could get ugly.

Arum was asked a simple question – "Considering his overall tenure, was Schaefer good for boxing or bad for boxing? – and didn't hesitate.

"Anybody who in my opinion is a bad person can not be good for boxing," Arum said. "Don King could be terrible and was a very hard competitor. He did some bad things, but when I look back on it, on the whole, King was good for boxing. Overall, he was not a bad guy, even though there were many unbelievable fights between us.

"Schaefer, I can't say that. Schaefer was mean-spirited and brought an attitude to the sport I wasn't familiar with or party to. Sure, promoters would fight each other, but three months later, the fight would be over and we'd be buddies for the next six months. He wasn't that guy. He was bad for the business, in my opinion."

Given what he's already accomplished, it seems that Schaefer is a lock for induction into the International Boxing Hall of Fame. He built a promotional company from scratch into a global powerhouse and helped to greatly expand its television footprint.

And he may have more to add in the future, as he wouldn't rule out a potential return.

"In 2000, when I left my banking days behind, I left very happy," Schaefer told Yahoo Sports. "I was the No. 1 banker in the U.S., private banker, and I felt I'd accomplished a lot and I moved on to a new challenge. That was boxing. Now, I'm at a crossroads again.

"I could do something totally different, or am I going to stay involved in some form in boxing? We shall see. But the fact is, I have a large number of relationships in the sports and entertainment fields, so I'm going to weigh all of that and see what I'm going to do."

The smart money is on Schaefer remaining involved in boxing in some capacity, likely working with Haymon and Mayweather.

The smart money is also on De La Hoya and Arum co-promoting again as soon as possible.

It seems inevitable, though, that the biggest fight will be between Schaefer, De La Hoya and Golden Boy in a California court room.

Kevin Iole | Yahoo Sports US

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