The Impact of Richard Schaefer's Departure from GBP
On Monday, Richard Schaefer officially resigned as CEO of Golden Boy Promotions (GBP) after leaving the banking industry (Credit Suisse) to build the company from the ground up along with its namesake (Oscar De La Hoya) over the past twelve years. The announcement was anything but surprising as it became apparent during the Mayweather - Maidana promotion that Schaefer and De La Hoya had 'irreconcilable differences'.
The past year has been anything but harmonious at GBP with De La Hoya in-and-out of rehab as well as a heated feud between Schaefer and the other major boxing power - Top Rank's Bob Arum. At one point, Schaefer claimed (and still stands by it) that he would never do business with Bob Arum again. Schaefer's relationship with De La Hoya was further distanced and perhaps even severed when De La Hoya made peace with Bob Arum and then discussed the 'amends' in a very public forum - through the media.
If the soap opera couldn't get anymore complex, in the middle of all of this, you have Floyd Mayweather, Jr. and his management, which includes Leonard Ellerbe (CEO of Mayweather Promotions) and the 'infamous' Al Haymon. When De La Hoya returned to his company following rehab, where he serves as President and is the majority shareholder, he learned that a lot of fighters fighting on GBP cards only had signed contracts with Al Haymon and were not contractually committed to GBP - a fact he admitted to the press that 'caught him off-guard'.
The boxing business is complex in that there are not strict regulations and oversight, unlike other major professional sports. The so-called 'Ali Boxing Reform Act' was implemented in May-2000 and was designed to protect the fiscal interests of fighters (specifically from promoters like Don King). For example, under the Act, promoters are not supposed to serve as managers concurrently. Many have long-believed that the 'man behind the curtain' (Haymon) serves as both for many of his fighters. In any case, Ellerbe and Mayweather have publicly-sided with Schaefer, which leads into what I think is going to happen with Schaefer.
In comments to ESPN, it appears that Schaefer has no intentions of leaving the sport of boxing. It is likely that his GBP contract includes some type of non-compete clause in it. However, as ESPN's Dan Rafael correctly points out, non-compete clauses in the state of California are about as 'loose as they get' and the enforcement of such provisions are often shot down.
Ellerbe and Mayweather have stated that Schaefer will always have a home in some capacity with their camp. Additionally, Ellerbe stated that he has no intentions of working with GBP in-any-capacity in the future, which likely includes co-promoted cards. The biggest question remains, which GBP fighters will defect and follow Schaefer? After all, it has been Schaefer, not De La Hoya, that they have built relationships with. The fact that a lot of supposed-GBP fighters do not have actual contracts with GBP does not bode well for De La Hoya.
I could see a scenario develop where Schaefer joins Ellerbe / Mayweather / Haymon making boxing a three-party race with Mayweather Promotions, Top Rank (Arum), and GBP (De La Hoya), all holding a number of reputable fighters. I see it unlikely, but possible, that De La Hoya joins forces with Arum's Top Rank, which would consolidate the sport back to a two-horse race.
To top it off, you also have the 'network' effect whereas certain promoters have now exclusively aligned themselves with certain television networks - not a new phenomenon in boxing, but one that is certainly amplified with the sport's current global divide. For example, GBP (under Schaefer) has been exclusively aligned with Showtime, which is also the driver behind Mayweather's historic six-fight deal. On the other hand, Arum's Top Rank is aligned with HBO. The disconnect and exclusivity of these fighters with the various networks is just another complication to get the best matches made while the respective fighters are still at the top of the game.
In any case, Schaefer's departure from GBP does not bode well for the possibility of better fight cards in the future. I think we are going to see more "manufactured champions" like Adrien 'I have a problem with real fighters' Broner - guys who are built up and sold to the public as great fighters based on domination of weak opponents - the result of skillful match-making (e.g., the 'Haymon Effect'). With Schaefer / Ellerbe / Mayweather refusing to work with Arum's Top Rank and now with GBP, it leaves the sport in peril. People need to look beyond just Mayweather - Pacquiao, there are a lot of other great potential fights out there - unfortunately for all of us, those fighters are rarely under the same promotional banner, which appears to be the greatest left-hook of all in destroying a deal.