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Are PPV and Boxing Facing a KO?

Imagine the year is 2004.

The biggest heavyweight championship of the unified world
is about to be announced in New York City, and even President-elect Hillary Clinton is in

The fight is so big that Time Warner Inc.'s TVKO and
Viacom's Showtime Entertainment Television have joined forces (KOTVSET) to promote the
pay-per-view battle. The Weather Channel is a major partner, since the fight will be held
at the new outdoor Cablevision Yankee/Madison Square Garden Stadium in New Jersey.
Overseas rights are being handled by Microsoft-Pokemon Ltd.

This will be the first heavyweight championship shown live
on the Internet for $69.99; $99.99 without Windows '04.

Everything seems to be in place for the biggest moneymaker
pro boxing has ever seen -- but the public isn't buying. Consumers are just tired of
plunking down hard-earned cash for weak, over-hyped boxing (mis)matches.

While the opening scenario is of the stranger-than-truth
variety, the last point -- about the public's apathy toward the fight game -- is
growing closer to reality, according to boxing observers.

Despite a near record-breaking revenue year for PPV boxing,
industry executives are concerned about the immediate and long-term future of the
beleaguered sport. While boxing carried pay-per-view until the early 1990s, competition
from pro wrestling, recent image problems and a scarcity of marquee up-and-coming fighters
seem to have the sport stumbling into the new millenium.

On paper, 1999 was a boon for boxing and PPV. The sport
generated almost $220 million in revenue, and provided a number of title unification
fights for which the public had been clamoring.

Yet instead of celebrating one of its most productive
years, the sport instead is licking wounds -- many self-inflicted -- that may take
a long time to heal.

Item: The industry's biggest draw, Mike Tyson,
suffered several setbacks both inside and outside of the ring. His January PPV event
failed to live up to operators' performance expectations, while the fighter barely won the
bout against Frans Botha.

Months later, Tyson found himself in jail once again, this
time on a road-rage assault charge. He returned to the ring in October, only to be
involved in another controversial fight in which he hit opponent Orlin Norris seconds
after the bell. Norris was unable to continue and the fight was ruled a no-contest.

Item: Pay per view's marquee fight, a March
unification bout between Lennox Lewis and Evander Holyfield, ended in a controversial
draw, which spurred several state and federal investigations into fight-fixing and
provided boxing with another black eye. The rematch last month was also a disappointment,
leaving many observers to say that the two bouts combined weren't even as good as
Ali-Frazier II -- the weak link of that epic trilogy.

Item: A much anticipated "fight of the
decade" between welterweight champions Oscar De La Hoya and Felix Trinidad failed to
live up to expectations in the ring, and ended with another controversial decision.

Item: The International Boxing Federation was
indicted on charges that the federation took bribes from promoters in exchange for giving
fighters high rankings, further staining boxing's already-tainted image.

"For the hard-core fan, it was a good year in the
sense that a lot of the matchups we wanted to see were made," said CNN/SI boxing
analyst Steve Farhood. "We had the [Holyfield-Lewis] and the [De La Hoya-Trinidad]
fights and that was good.

"But, to the average fan, a combination of the
outrageous [Holyfield-Lewis] decision; the bad decision and the lack of action in the De
La Hoya-Trinidad fight; and the IBF [indictments] was bad. I don't know how much lower
boxing can drop, but I think it definitely dropped in '99."

Yet boxing, like a good plague, is hard to eradicate.
"Boxing will always be around on PPV," says Ted Hodgins, manager, PPV for Media
General Cable of Fairfax City, Va. "It will come back in some way or another form. It
may not have the big, big fights next year, but it's cyclical. It will take some time to
build the new guys back up and get some exposure for them."


But boxing will have to fight hard to reach the PPV revenue
success it enjoyed in the 1990s. Right now there, aren't many fighters with the ability to
draw the consistent buy-rate and revenue numbers that the industry achieved earlier this
decade. In fact, two fighters -- Evander Holyfield and Mike Tyson -- represented
the majority of PPV boxing business in the '90s.

A recent Showtime Event Television PPV report showed that
Tyson and Holyfield took part in 12 of the top 13 highest-grossing PPV events of all time.
But with both fighters presumably at the end of their careers, it's incumbent on the sport
to come up with new marquee names.

Even with attractive fighters, the industry still has to
come up with the right matchups at the right time to be successful. While a early 2000
Mike Tyson-Lennox Lewis fight may look appealing on paper, the industry couldn't maximize
its profits right now because Tyson doesn't have any credibility, having come off a
controversial fight in October.

"We feel very strongly Mike needs another fight or two
before he can go to PPV." Showtime Sports and event programming senior vice president
and executive producer Jay Larkin said. "I just don't think the public is going to
pay $50 a pop to see Tyson."

But TVKO senior vice president Mark Taffet says the PPV
universe is ready for a heavyweight unification bout between Lewis and young heavyweight
Michael Grant -- even though Grant is virtually unknown outside of boxing circles.
Grant, however, showed he may be a prime-time player by getting off the deck against
Andrew Golota not once, but twice, on his way to a 10th-round knockout over the enigmatic
Polish heavyweight.

Grant would also be fighting for the unified heavyweight
championship, which lends more credibility to the event.

"I believe the biggest most credible fight in the
sport of boxing right now is Lennox Lewis versus Michael Grant for the undisputed
heavyweight championship of the world," says Taffet. "You can't find 13 feet and
500 pounds in any combination other than Lewis and Grant. If that's not a heavyweight
fight, what is?"

The problem is, the champion Lewis is himself not the most
popular or well-known heavyweight standard-bearer. Prior to the Grant-Golota slugfest,
when Lewis was introduced to the crowd, he was met by a significant number of boos.


But at least the good-natured Lewis brings a lot of
credibility to the sport. Lewis' win over former heavyweight champion Holyfield last
November went along way in repairing the sport's damaged image, which suffered several
hits during the 1990s and must be repaired quickly if the sport is to survive in the next

"First of all, the public has to be confident that the
sport is being run correctly, fairly and with integrity," Taffet said. "The
first thing Lewis-Holyfield II did was is restore in the public's mind the integrity in
the sport and the governance of boxing. That was critical to show the public that the
sport of boxing was not only worth their time, but worth their money."

And executives said that will go a long way toward
establishing PPV boxing going into the next century.

"The future is very bright. It's very, very exciting
about what's going to happen over the next few years," predicted Taffet. "There
are a number of very, very exciting young fighters which we think will be emerging on the
scene in a bigger and better way. These fighters, who will carry the sport into the next
millennium, are Prince Naseem Hamed, Floyd Mayweather, Shane Mosley, Fernando Vargas and
Oscar De La Hoya, who's still a very young man.

"Lennox Lewis, for as long as he fights, he's young by
heavyweight standards. Michael Grant is one of the great young heavyweights of the
future," Taffet added.

Prime Cable director of marketing Pam Burton agreed that
boxing and PPV have a bright future.

"After '96, '97 and '98, how could it not go up?"
she asked. "I think we're starting to see some of the newer folks come into this

Unfortunately for the industry, most of the
"new-jack" fighters are not well known to casual boxing fans. To right itself in
2000, industry observers believe boxing must find a way to promote its biggest names.

"Guys like Mosley and Mayweather are two names that
are tremendous talents to those of us who watch boxing," said Farhood. "Will
that eventually be able to translate into PPV? Now? No. They have to become mega-stars.

"They have the talent to do it, but can they be
marketed to become such? I don't know."

But promoting fighters is difficult in the current
broadcast-television climate, which is anti-boxing due to the sport's surly image. The
industry hasn't helped itself with scandal after scandal, but boxing is still a viable
sport if networks are willing to recognize the fans' interest, observers said.

Currently, ESPN2's Friday Night Fights is the only
weekly show that showcases up-and-coming boxers. Home Box Office and Showtime both offer
frequent boxing shows, but neither has the household reach of a broadcast network. For
now, boxing will have to maximize its cable opportunities to promote its new crop of

"[The industry] needs even more exposure on Home Box
Office or Showtime and ESPN2," said Hodgins. "ESPN2 is doing a great job with
some of their Friday Night stuff in just getting these guys on basic cable. People can see
them and know who they are, as opposed to having to rely on me selling a $50 fight. None
of us likes to do that."

Other executives believe that its time for the sport to
consider funding a cable channel of its own as self-promotion.

"Boxing should look to a boxing channel or something
where you can stay involved with the boxers through their career, or continue to follow
them once they've made it," Prime's Burton said.

Burton said the Olympics are successful because its
telecasts use personal-interest stories to develop audience interest in the athletes.
Boxing could adopt the same strategy using its own channel, she said.

"Showcasing the other interests behind the athletes
helps the public stay informed," she said. "Boxing has always been a blood
sport, but a little spit and polish couldn't hurt its tattered image."

Others believe that the sport needs a total overhaul to
become more appealing to the masses. Farhood says current Congressional legislation
attempting to regulate the sport could help, although he calls such government
intervention " a double-edged sword."

He also said the sport should go after additional financial
partners. "We have to look for co-distributors at the basic-cable level and the
broadcast television level to help create a new fan base and educate new consumers.

"Our concern is, at what point do the costs outweigh
the fan support? It is very essential for us to keep the fan base growing because the
costs are escalating every day," he said.


Unlike the early 1990s -- when boxing was the staple of
the PPV industry -- the sport enters the new millennium facing a strong challenge from
professional wrestling. In fact, wrestling has generated more revenue than boxing over the
last two years. With $1.1 billion earned during the decade, wrestling finished a close
second to boxing's $1.3 billion, according to SET.

Traditional men's boxing may also receive a challenge from
women in the new millennium. While revenues from women's boxing pale in comparison to what
the men generate, the sport is quickly gaining momentum and could be a major revenue
source for the industry.

"I think women's boxing to some degree has created
mild enthusiasm, and with the competition of wrestling and how they've positioned
themselves in the industry and to their consumers, you're going to see changes,"
Prime's Burton said.

"The continuity of wrestling is there every month, but
it's not with boxing," she said. "Some of the boxing fans were leaving the
category to some degree -- not your hard-core boxing fans, but your light users. I
think they will come back, but it's all about programming and who's on the card."

The key for any PPV bout, however, is strong competition
-- and that can be hit or miss for the industry. Going into the fight, Lewis-Holyfield
I and De La Hoya-Trinidad were hot tickets. The results in the ring were so-so at best.

And the more misses the industry suffers, the more upset
the viewer becomes -- particularly with most major PPV bouts costing $50 a pop.

"You had some events that promised a whole lot more
than they delivered," said Larkin. "I think you're looking at a PPV buyer now,
they really feel burned. It's in the best interest of the suppliers, such as SET and TVKO,
and the promoters like Bob [Arum] and Don [King] to put together events, price them
appropriately for the consumer's benefit so that when they plunk down their money, they're
going to see their money's worth."

He added: "If you put King Kong vs. Godzilla in the
ring and they don't want to fight, there's nothing you can do about it, but what you try
to do is hedge your bet by supporting it with a very attractive [undercard].

"Since we can't guarantee the quality of the main
event, you put together three main events."


Yet despite several doomsday scenarios, industry executives
still believe boxing will eventually get off the mat and produce some more revenue
knockouts for the pay-per-view industry.

"Boxing is still a popular sport," said Mike
Luftman, Time Warner vice president of corporate communications. "It's going to be a
strong PPV draw. It's just a question of a continuing supply of new and exciting fighters
coming on the scene, and history says that will happen."

Cox Communications Inc. director of corporate
communications Amy Cohn also sees the sport's upside. "Boxing has been very good, but
it's very cyclical and it's a down cycle right now," she said.

Boxing Writers Association of America president Chris
Thorne sees one way to jump-start the sport: the best must battle each other. "That's
the only way to go now, because there's nothing else out there," said Thorne, the
boxing writer for The Star-Ledger of Newark, N.J.

But with the lack of available marquee talent, there is no
event sure to draw one million or more PPV buys. "Other than De La Hoya, title or no
title, what fan is willing to ante up fifty bucks two or three times a year for boxing,
other than the hard-core fan?" Farhood asked.

There are a few legitimate PPV bouts on the horizon,
including March's proposed Felix Trinidad-David Reid middleweight championship bout, or
rematches pitting De La Hoya against Trinidad or Ike Quartey. But none of those events is
likely to attract one million buys, Farhood predicted.

Maybe that earlier scenario of a great heavyweight
championship in 2004 with no viewers will one day be a bad joke. When the new millennium
starts taking its first baby steps in the year 2000, maybe the megamerger between CBS and
Viacom will lead to a return of afternoon fights on the Tiffany network, which will lead
to bigger fights on Showtime and even bigger fights on SET. Then the other networks will
be forced to follow suit.


Or maybe that heavyweight championship fight finds the
ultimate partner when the undercard is announced: a matchup between an injury-free Stone
Cold Steve Austin and Goldberg for wrestling's unified heavyweight championship.