Boxing shows’ breaks
Anybody who wants to put on a professional boxing match in California has to navigate 128 pages of regulations, many of them designed to ensure the health and safety of boxers as well as to promote the integrity of the sport.
But when reality TV producers from Hollywood came calling earlier this year, state officials agreed to bend a couple of those rules.
The producers of Fox’s “The Next Great Champ” and NBC’s “The Contender,” bitter rivals in most respects, had one thing in common: Both were so eager to keep their shows’ outcomes under wraps prior to broadcast that they sought and received approval from boxing commissioners and the California attorney general’s office to circumvent a state law requiring immediate public disclosure of bout results. Both series are counting on the secrecy to help them build dramatic suspense as they seek to find new champions from fields of unknown athletes.
What’s more, both the “Champ” and “Contender” producers negotiated lower-than-normal state taxes on the license-fee payments mandated for boxing broadcasts. Representatives of both shows successfully argued that they should pay tax only on the portion of their shows actually devoted to boxing matches -- typically just a few minutes in each episode. Other promoters described this arrangement as highly unusual. In the case of “Champ,” the amount and timing of the tax payments was sharply questioned by the then-chairman of the California Athletic Commission, which regulates boxing.
Although state boxing laws have entered into a bitter court fight between the two shows, the special deals given to both shows have remained out of public view until now.
Until recently, Hollywood’s great boxing standoff had focused more on accusations of idea theft than on meeting state boxing standards. Executives from DreamWorks, which is producing “Contender” with reality guru Mark Burnett, and from NBC, which will air the show starting in November, have complained for months that “Champ” ripped off their concept.
Then last week, they filed an unfair business practices and fraud lawsuit against Fox Broadcasting in Los Angeles Superior Court, alleging that “Champ” broke state laws in a scramble to get on the air. A hearing on a request by DreamWorks and Burnett for a preliminary injunction against airing “Champ” -- which is slated to debut Sept. 7 -- is set for Friday.
In the brief history of reality shows, concepts have tended to pivot on questions of who gets voted off the island or receives the final rose. But in the case of “Champ” vs. “Contender,” the producers have waded into the tough arena of a heavily regulated sport.
In agreeing to soften the public disclosure requirement -- which is designed chiefly to allow boxers to verify a prospective opponent’s fight record before a match -- the commission granted the reality-show producers a break seldom if ever extended to other promoters, according to two former commission chairmen and two licensed California promoters contacted for this story.
But the former chairman said that the benefits the TV shows are expected to provide, in terms of state revenue and heightened exposure for boxing, make the trade-off worthwhile.
“This is where Hollywood and boxing cross paths,” said Sanford L. Michelman, who served as a commissioner for four years, including a stint as chairman that ended Aug. 1 but included the time period in which the TV waiver deals were struck. “That’s the first request [to change the public-records rule] I ever heard of when I was on the commission.... The whole reason is to protect the results of the show.”
Commissioner John Frierson referred calls to the commission’s general counsel; other commissioners could not be reached.
Michelman, an Encino attorney, said that commissioners agreed to delay the reporting requirements partly because they were concerned that the TV producers might shoot their productions in other states if their conditions were not met. While the delayed disclosure waivers seem unlikely to set off a wave of copycat requests, some say they might embolden boxing promoters to ask for special deals of their own. “It’s definitely opening up a door,” Michelman said.
University of San Diego law professor Robert Fellmeth, a boxing commissioner from 1976 to 1981, said officials inappropriately carved out a legal exemption for the Hollywood producers.
“This whole state is excessively star-struck,” Fellmeth said. The main rationale of the boxing laws is to ensure that “matches are fair and the public is monitoring them, [and] that money does not unduly influence” the sport, he added. “Hollywood stardust does not trump the law.”
“Outside of these reality shows, boxing is a great sport and if it begins to look like show business or wrestling, it takes away from boxing,” said licensed promoter Ken Thompson.
As for the waivers, “why are they allowing them to do it, and not us as promoters?” said licensed promoter Ed Holmes.
Still, both promoters acknowledged that the shows could build exposure for boxing. And the shows aren’t short on star power: “Champ” features boxing great Oscar De La Hoya; the host of “Contender” is Sylvester Stallone.
Patty Glaser, a lawyer representing “Champ” producer Endemol USA, confirmed that the producers had received permission to modify the public-disclosure requirements. DreamWorks spokesman Andy Spahn said that “Contender” also got the go-ahead from the athletic commission and the attorney general in late July to keep its bout results secret.
While both shows received waivers, paperwork reviewed by The Times applied only to “Champ.” Efforts to obtain documents related to “Contender” were unsuccessful, though the waiver and the negotiated tax payment were confirmed by the show’s producers.
In an interview Tuesday, Burnett said that the disclosure waiver was “appropriate” because the “Contender” boxers agreed not to fight again until after the show aired. That would prevent another fighter from being deceived about a boxer’s record, he said.
As for whether the secrecy is designed to protect the show’s ratings, Burnett replied: “Of course it is.”
Dean Lohuis, acting executive director of the athletic commission, confirmed there was a disclosure agreement approved by the attorney general, but referred questions to Anita Scuri, the commission’s counsel, who would not discuss the matter.
“Our official comment is ‘no comment,’ ” said Karen Chappelle, the deputy attorney general who signed off on the disclosure deal. Spokesman Tom Dresslar of the attorney general’s office in Sacramento also declined requests for comment.
The athletic commission, a unit of the state Department of Consumer Affairs, has regulated boxing in California since a voter initiative in 1924. The commission typically has seven members, but due to term expirations and a lack of recent appointments by Gov. Arnold Schwarzenegger there are currently only four commissioners.
The producers’ dealings with the state might have escaped notice if not for the ongoing legal fight over “Champ.”
In their suit filed Aug. 17, DreamWorks and Burnett claimed that Fox and Endemol, which is producing “Champ” with De La Hoya’s Golden Boy Promotions, are rushing “their ersatz copycat show to air no matter how many statutes and regulations need to be violated.” The “Contender” side relied heavily on an Aug. 12 memo from Michelman that stated Endemol violated state rules because it undertook extensive promotional activities without a promoter’s license. Michelman also wrote that Golden Boy failed to pay the required state tax for the “Champ” matches.
In an interview, Michelman said he raised the disclosure requirement with the “Champ” producers during a meeting June 11, two weeks before the producers held their first bout, but no consensus was reached. On July 26, he broached the subject again, telling the Endemol attorneys in a phone conversation that the commission would soon release the names of the “Champ” bout winners, according to Glaser.
This set off a flurry of negotiations between state officials and attorneys for the “Champ” producers. On July 28, Robert L. Shapiro, a law partner of Glaser’s who rose to prominence as one of O.J. Simpson’s lawyers, outlined the resulting agreement in a letter addressed to Michelman, Scuri and Chappelle.
To allay officials’ safety concerns, Shapiro wrote, each boxer on “Champ” would sign a declaration promising not to fight in any match until after the show’s finale was telecast. The document also featured a provision in which the boxers asked the commission to “keep all ... information confidential until the final episode of the series airs, and that it not be reported to the official registry of boxing commissions or to any other registry as may be required by” state and federal law.
The “Contender” producers reached a similar agreement with state officials shortly before starting production of their show last week, according to DreamWorks’ Spahn. Both sets of producers also negotiated a favorable rate on state taxes applicable to boxing matches.
According to California law, boxing promoters are required to pay the state up to 5% of any revenue earned from the sale of broadcast or television rights. Because Fox is paying the “Champ” producers approximately $1.2 million for each episode -- for a total of either 10 or 11 episodes -- Michelman said the producers could have owed up to $600,000 in taxes.
The “Champ” producers did not share that view. According to Michelman, the producers insisted they pay tax only on those portions of the show that actually consisted of officiated boxing -- typically just a few minutes at the end of every program. The producers sent checks for $6,000 for each bout, although Michelman said that after he threatened to audit the producers’ books, they raised that amount to $9,000. “Champ” producers paid the tax for a total of 13 bouts, or $117,000, according to Michelman.
In his Aug. 12 memo, Michelman criticized the “Champ” producers for not providing access to financial records and for failing to pay the taxes on time. But Glaser, Endemol’s attorney, dismissed such complaints. “As I’m sure Mr. Michelman is aware, this was the boxing promoter’s obligation, and it was paid in a timely manner by Golden Boy,” Glaser said. The “Contender” side also negotiated a special rate, although the details remain unclear. Producer Burnett confirmed that the state agreed to tax “Contender” based on the number of minutes devoted to boxing matches, rather than the entire program length. DreamWorks declined to release the figure, and state officials would not comment. But given that NBC is believed to have paid DreamWorks and Burnett a license fee of more than $2 million for each of 16 episodes, the producers could have been on the hook for as much as $1.6 million in state taxes.
“The [final] number was one the athletic commission and the attorney general told us they were happy with,” DreamWorks’ Spahn said.