American Son

by Oscar De La Hoya

  Married to the former Lilia Jaimes, a native Mexican who had emigrated to this country as a child, Richard understood the Hispanic culture. He saw the potential of the growing Hispanic buying power in the United States and felt I, as a Mexican-American, had crossover appeal to both Anglo and Hispanic consumers. I could not only straddle two cultures, he said, but also appeal to both males and females, sports fans and pop-culture fans.

  Richard wanted to know what my goals were in the business world. I told him they weren’t modest. I wanted to make more outside the ring than I made inside it. I wanted to build a business empire. Since boxing was what I knew best, it seemed logical to start there, as a promoter, and then expand into other businesses.

  With both of us on the same page, Richard and I drew up a blueprint for success, a blueprint based on my future in business, not my past in the ring.

  Next, Richard turned to the lawsuits.

  “Take the bricks off your shoulders, the gum off your fingers, and breathe again,” he said. “Be free. These lawsuits have encircled you. You keep pushing them forward as if they are suddenly going to go away. They won’t. You need to take care of them, get them dismissed. Face them head-on just like you face your opponents in the ring. We need to move on. Why do you want these people lingering in your life, hanging on? It’s not worth it. This has to be your first order of business so that, when you go to training camp, you can focus on your fights. You will have a financial base when you are done. And whatever that base ends up being, you will start building again. Build from that foundation. Build your business.”

  From Richard, I finally learned to face my problems and deal with them. It was uncomfortable, but when I was done, when the last lawsuit was dealt with, I had a great feeling of relief.

  Finally, there was the matter of my father and brother. They had both been receiving a percentage of my earnings under Hernández, and I had no intention of cutting them off now.

  “How much do you want to pay them?” Richard asked. “It’s up to you.”

  I came up with a figure and everybody was happy.

  It was all so new with Richard. I had my first credit card. Can you imagine that? Here I was, a professional fighter, a very successful professional fighter, for eight years, and I had never had a credit card. The days of getting cash in an envelope at the car dealership, like I was engaged in some drug deal, were over.

  The difference between Richard and Mike Hernández is best illustrated by the way they regarded me, the man who was supplying the revenue. Richard sees me as an equal, someone who is involved every step of the way in every business transaction.

  Hernández’s attitude was demonstrated in a conversation he once had with my agents Binkow and Armato. “The best way to keep Oscar out of trouble,” Hernández told them, “is to buy him his own strip club.”

  I did as Richard advised on many issues—he never advised me to buy a strip club—and off we went, the financial world opening up under his guidance.

  I was almost on empty when that journey began. After all the lawsuits were settled, I had only a few million dollars left.

  “Now we have to reload,” said Richard, undaunted by the numbers.

  He had two targets for us, operating businesses in which we would be actively involved in running the day-to-day operations as majority shareholders, and businesses in which we would only invest.

  Richard believes in a well-diversified allocation of liquid assets, putting the funds into fixed-income investments, such as municipal bonds, along with traded equity, private equity, commodities, and alternative assets.

  That, Richard said, would be my safety net, my guarantee that I would always have enough money to support me in a comfortable lifestyle.

  We could then take some risk by investing additional money in real estate and corporate assets. With Richard, it’s not that much of a risk because his years in the financial arena have enabled him to identify money-savvy people to become our partners in various business ventures.

  Richard believes that with investments, you make your money on the way in, not on the way out. When nobody wants an asset, you buy. When everybody wants it, you sell.

  We have focused on five areas to invest in, with a special emphasis on the growing Hispanic market:

  Real Estate

  We have formed Golden Boy Partners for development projects and Golden Boy Real Estate for existing structures.

  So many Hispanic neighborhoods in L.A. and frankly, all over America, have been neglected. They are crying out for the kind of redevelopment Magic Johnson has done in the African-American community. While Richard is my guru, Magic is my role model.

  We have hooked up with John Long, a very successful developer, through his company, Highridge Partners. We combined forces to form Golden Boy Partners. Gabriel Brener, a wealthy businessman from Mexico, has also joined us in this venture, as he has done in many others.

  We currently have eight projects in various stages of development. These projects will be lifestyle centers where people can live, work, and play. We want these places to be a destination for people. They will contain stores, movie theaters, affordable housing, restaurants, and fun zones. Something for everyone’s taste. It’s a chance for me to give back to the community

  Along with Gabriel, we acquired a high-rise on Madison Avenue in downtown Manhattan. We bought the office/condominium structure in 2003 and sold it in 2006 at the height of the market, one of the highest per-foot sales ever recorded in New York.

  In 2005, we bought a high-rise on Wilshire Boulevard in downtown L.A., which now houses our offices, and renamed it the Golden Boy Building. Through another associate of Richard’s, Chris Rising, we had been tipped off that the fourteen-story building was for sale well below replacement level because it was only 40 percent occupied and was missing an elevator.

  At the meeting to close the deal, Richard informed the seller it would be that seller’s obligation to replace the elevator, which would cost half a million dollars.

  The seller balked.

  “Then forget it,” Richard said. “I’m not going to buy a building with one of the elevators missing. That’s not right. That’s like buying a car without wheels. Give me a break.”

  The sellers thought Richard was nuts, threatening to walk away from a deal like that because of an elevator. Richard was just bluffing, but the bluff worked. The seller paid for the elevator.

  Because of the conversion of many downtown L.A. structures into residential buildings with lofts, and all the other construction going on in the area, available office space has been diminishing since we made our purchase. As a result, today, our building is 100 percent leased, every office filled, generating an annual profit in the millions.

  A couple of years later, Richard refinanced the building and used the extra money generated to buy The Ring magazine, boxing’s most prestigious publication, and several other magazines as well. So really, that purchase didn’t cost us anything. Today, the building is worth several times what we paid for it.

  For now, we are holding on to it. Eventually we will sell because, as Richard always says, “Never fall in love with your assets. You only fall in love with your wife and your kids. Everything else is for sale.”

  Sports and Entertainment

  This includes Golden Boy Promotions; Golden Boy Mixed Martial Arts; the Houston Dynamo, the two-time defending Major League Soccer champions; Frontera Productions, a movie company geared to making films for Spanish-language audiences; as well as a small stake in Univision, the leading Spanish-language television network.

  Media

  We have gotten into the Hispanic newspaper business as investors in ImpreMedia, the dominant source of information for Hispanics in this country. ImpreMedia owns El Diario La Prensa in New York. Around since 1913, it is the oldest Hispanic newspaper in the United States. ImpreMedia’s publishing empire also include Hoy Nueva in New York, La Opinión in Los Angeles, La Raza in Chicago, El Mensajero in San Francisco, La Pre
nsa serving Orlando and Tampa, and the chain of Rumbo papers in Texas. Included in this category are The Ring magazine and the other publications related to contact sports.

  Food and Beverage

  We have equity ownership in Equal, the sugar substitute, a growing industry not only in the United States, but elsewhere in the world under the brand name Candarel. We are also investing in a distinct brand of tequila and a premium water product.

  Hotel and Leisure

  We will have partial ownership in a planned chain of Fontainebleau hotels and will create the Golden Boy Sports Lounge. The first of several is planned for Las Vegas.

  There are also plans for a bank and insurance products geared to Hispanics. Perhaps the greatest compliment we could receive is that AEG, the fabulously successful company run by multibillionaire Philip Anschutz, is acquiring an equity interest in Golden Boy. AEG normally acquires companies, not minority interests, but Anschutz thinks enough of us to make an exception.

  Most of these investments focus on the Hispanic market. It is my way of giving back to my community while also educating and empowering Hispanics.

  So Richard’s father need not have worried. His son is doing just fine.

  I always had big dreams. I just took them to another level when I hired Richard. Without him, I could not have gotten to where I am today.

  He has also become one of my best friends, the best man at my wedding, and a godfather to my son, Oscar Gabriel. It’s gotten to the point where we don’t even need to sit down and talk at length about a business proposal because he knows what I think, I know what he thinks, and usually, it’s the same. What I bring to the table, Richard doesn’t have, and what Richard brings to the table, I don’t have. That’s why we make a perfect team.

  I trust him completely. Well, almost completely. I still wouldn’t trust him to drive me around in a golf cart.

  XXII

  LOSING THE GOLD

  Going from Mike Hernández to Richard Schaefer, I felt like a blind man who miraculously gains the gift of sight. My future suddenly looked so bright, the financial landscape so appealing, my path to success beyond boxing so clearly marked.

  I had struck a blow for my financial independence, but I began to wonder if I should be throwing a second knockout punch. Should I also get rid of my promoter, Bob Arum? After all, he and Hernández had been joined at the hip. They would disappear into a room, huddle together, and when they emerged, I would be presented with a contract for my next fight. How could I separate the two? If Hernández had been bad for my economic well-being, was Arum any better?

  I knew that he and his matchmaker, Bruce Trampler, had done an excellent job in bringing me along through the early part of my career, picking just the right opponents to season me without threatening me. As my skill level rose, so did the quality of opposition. When I peaked, the blockbuster fights awaited.

  People said I was the masterpiece of a man who had made promoting an art form. But at what price?

  That question echoed loud in my mind after my fight against Trinidad.

  When he began to take over my affairs, Richard wasn’t shy about admitting what he didn’t know. Give him a financial portfolio, an investment plan, or an innovative business idea and stand back. The wheels start turning, numbers are crunched in his head with the speed of a calculator, and within minutes, he can present you with options. But when it came to boxing, the numbers were foreign to him. He was like the average fan. He read about the purses the fighters earned in the ring and was impressed.

  When it came time to take a hands-on approach as my representative, that quickly changed. Richard passionately devoured information. He had a hundred questions off the top of his head. He wanted to know about every revenue stream in boxing from the live gate to the pay-per-view telecast to the closed-circuit broadcast to the international rights. He wanted to know how everybody involved in a fight gets paid and how that is determined.

  Richard’s involvement began after the Trinidad fight. We had set a record for a nonheavyweight match with 1.4 million pay-per-view buys. My share of the revenue had been a $23 million guarantee up front.

  “How do you know if this is a good amount?” Richard asked me.

  “It’s a good purse,” I said.

  “Related to what?” Richard said. “You sold one-point-four million pay-per-view buys at fifty-five dollars a household. That’s seventy-seven million right there. The live gate was something like fourteen million. Now we are up to ninety-one million. If a sports bar buys the fight and charges admission to the public, do they have to pay extra for that?”

  I didn’t have all the answers for Richard and neither did my father. The questions triggered another question in my mind.

  Trinidad had made $10.5 million in the fight. Bob? Probably the same or more. It was Trinidad and I who had put in the long hours on the road promoting the fight, Trinidad and I who had worked and sweated and starved our way through the agony of training camp, Trinidad and I who had attracted the record crowd, and Trinidad and I who had taken the blows and sustained the bruises in the ring. So why was the promoter making more than one fighter and more than half of the purse of the other fighter? The more I thought about it, the less logical it seemed.

  After learning what Bob had made, I recalled a conversation I had had before the fight with my agents, Bruce Binkow and Leonard Armato. They had advised me to take the risk rather than the guarantee. Go for zero guarantee, they said, and take a percentage of the revenue because this fight is going to be big.

  I remember hearing that Bob had been pounding his fist on a table at the Mike Hernández car dealership, saying, “No way this fight does more than eight hundred thousand buys.”

  Binkow and Armato disagreed. Their plan was to bring in new sponsors who would, in turn, bring more media exposure and more hype for the fight. That’s what they did and Bob wound up the beneficiary when the pay-per-view total exceeded his own estimate by 600,000.

  I had left money on the table, but I would make no changes in my relationship with Bob, however, until Richard could give me an educated opinion. He went to Bob, who was very cooperative and schooled Richard on boxing finances.

  Looking at the cold, hard numbers may have been instructive, but seeing the flesh-and-blood movers and shakers with all their sound and fury was even more illuminating. Richard got that opportunity in a brief, explosive meeting at the HBO offices in New York.

  The purpose of the gathering was to see if I could get a rematch with Trinidad. He would be there along with Don King, his promoter; Don Félix, his father/manager; and, of course Bob and the HBO executives. I asked Richard, who was still working for the bank and was in New York on business, to represent me.

  The meeting began, Richard told me, with a discussion of a catch weight for the fight, since Trinidad’s people said he could no longer make 147 pounds, as he had in our first match. Trinidad talked about going to 154. Bob held firm at 147. Trinidad came down a few pounds and Bob went up a few until they dug their heels in just 2 pounds apart. And there they held firm.

  The whole discussion lasted all of five minutes, ending when Bob said, “Forget it, then. There will be no rematch.”

  And just like that, everybody stood up to leave. Richard was flabbergasted.

  “Excuse me,” he said. “I’m new to all this. Most of you came from far away, from Puerto Rico, from Vegas, and you guys are breaking up the meeting after just five minutes, a meeting for a rematch, which I understand could potentially be one of the richest fights in the history of the sport, because of two pounds?”

  “Who is this guy?” asked King, as everybody walked out the door.

  They would soon find out.

  With the rematch talks dead by the spring of 2000, negotiations were under way for me to fight Shane Mosley at Staples Center.

  First, however, I had to decide what I was going to do about Bob. My lawyers had determined that I could legally break my contract with him, so that was not a hurdle.<
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  Richard, however, lobbied to keep Bob. He had determined that the promoter had never ripped me off.

  “Arum negotiated very smart deals for himself and Top Rank,” Richard said. “There is nothing illegal about that. If a promoter gets away with a deal where he ends up making millions, good for him. Bad for you. That certainly doesn’t make him a crook. The problem was, you didn’t have anybody on your side doing a better job of negotiating.

  “Having changed business advisers, maybe you should maintain stability by keeping the same promoter. It seems to me Arum has done a pretty good job of guiding your career. I think you should continue to work with him, but only after redefining the relationship. Don’t just dump him.”

  That sounded fair as long as I had Richard looking over my shoulder. I felt he knew enough by then to represent me in my dealings with Bob.

  After seeing Bob’s proposal for the Mosley fight, Richard suggested a way to reconfigure my deal with the promoter. Richard gave me the same advice I had received before the Trinidad fight from Binkow and Armato: take less of a guarantee and more of a percentage of the revenue. I had always felt more secure taking the guarantee, money I knew was mine regardless of how well the fight sold, content to let Bob take a percentage of the profits. I figured it was Bob who was taking the risk.

  “It seems to me the risk Arum takes is relatively minimal,” Richard told me. “You agree to a big guarantee, but it turns out to be not such a big guarantee if the fight does as well as projected. It’s the percentage that turns out to be a big figure and that goes to Arum. You really should get the lion’s share. You are the big-name star who is bringing in the money.”