The Pugilist's Predicament: HBO and the Decline of Boxing

Adrien Broner is currently the biggest name in boxing, but there's a good chance that you

dont know who he is. The 27 year-old from Cincinnati is a former world champion in four

different weight classes, and currently holds a 32-2 record. However, for those that do know

Broner, it's because of his behavior outside the ring, not inside of it. If you google his name, you

will see links to TMZ stories, controversial videos on World Star Hip Hop, and his audacious

instagram account. The average sports fan may not remember when he knocked out John Revish

in only one round to win the WBC lightweight, but they do remember the videos of him flushing

a wad of $20s down a Popeyes toilet, or when he publicly cursed out Jay-Z after being offered a

$40 million deal to sign with the hip-hop moguls management company.

How have we arrived at a point in which the best boxer in the world has been reduced to

childlike antics in order to garner any publicity? Why has boxings popularity declined so

drastically in the past 20 years? Many analysts have pointed to numerous issues the sport faces,

such as competition from other combat sports and internal politics. However, most sports writers

and analysts have ignored the one force that is most responsible for boxings decline; television.

For the past few decades, the biggest fights in boxing havent taken place within the ring, but

inside studio offices between television executives and boxing promoters. However, the two

sides have failed to construct a system that adequately rewards boxers, promoters, and television

networks, while providing the best possible product to the widest audience. This is because the

current relationship between boxing and HBO, the most important provider of boxing on

television, is deeply flawed. HBO has held a near monopoly on boxing since the networks

inception in the 1970s. This monopoly has greatly benefited the financial fortunes of various
boxers and promoters, and has elevated the status of HBO. However, HBOs unique

structure as a subscription based pay-per-view network has deflated the overall value and

popularity of boxing. In this paper, I will analyze the historical context of HBO Boxing,

examine HBOs policies and programs, and attempt to tease out the tensions between HBO

executives and boxing promoters. Through this analysis, I aim to contextualize the downfall of

televised boxing within the wider world of sports media.

In order to understand HBO Boxing, it is necessary to examine the development of cable

and satellite systems that led to HBOs formulation. Cable had long been used as a solution for

delivering network television to areas of the United States that did were not able to receive

television broadcast signals. This was a free service, though by the 1950s companies began to

experiment with pay-cable services. In 1950, Skiatron Electronics and Television Corporation

began tests of Subscriber-Vision, a broadcast pay system that used IBM punch cards for both

program selection and billing. (Mullen). This service was provided on an experimental basis to

an unaffiliated New York station during the stations non-operating hours. (Mullen). In 1953,

Skiatron attempted to obtain permits from the FCC that would allow the company to expand

their service. While the FCC denied Skiatrons permit, broadcasters had become anxious about

the idea of pay television. Broadcast networks argued that pay-cable services would destroy the

democratic nature of free television. This concern over pay-cables potential to circumvent the

traditional framework of the major networks would become a relevant issue just a decade later.

However, in the face of opposition from the FCC and the major networks, companies continued

to experiment with pay-cable services. In 1962, Phonevision, a joint project between RKO and

Zennith, was permitted to launch an experimental service in Hartford, Connecticut. (Mullen).

Subscribers were offered two to three hours of programming and paid a $3 monthly fee.

(Mullen). The cable system attempted to provide more culturally aware programming, however

boxing matches drew the largest audiences. In 1964, a Cassius Clay v. Sonny Liston fight was

viewed by 86% of all Phonevision subscribers. (Mullen). This trend would influence later

programming choices on established pay-cable networks. Phonevision never made a profit, and

the cable service ended in 1969. However, before the services collapse, Phonevision had been

awarded a permit by the FCC allowing the service to conduct business on a non-experimental,

commercial basis. (Mullen). This change in broadcast regulation would pave the way for future

pay-cable networks.

One of the first networks to take advantage of the new change in broadcast regulation

was Sterling Manhattan Cable. The cable service offered uncut films and sporting events to

Manhattan residents in the late 1960s. The system, run by Charles Dolan, created an opportunity

for Dolan to pitch a new cable channel to Time Life Channel. Dolan proposed a cable channel

that employed the use of satellite technology, and called the channel the Green Channel.

Satellite technology had not yet been fully developed, but Time Life Channel backed Dolans

plan. The name of the network was soon changed to Home Box Office, and on November 8,

1972, Dolan officially launched the network using microwave instead of satellite. (Santo).

HBOs first ever broadcast was a hockey game between the New York Rangers and Vancouver

Canucks, and was broadcast via a CATV system in Wilkes-Barre, Pennsylvania. (Santo).

However, HBO quickly struggled. After three months and $1 million in losses, Dolan was fired

and Gerald Levin was instated as the new CEO. Levin attempted to keep the fledgling network

afloat, and in 1975 signed a six year, $7.5 million contract that gave HBO access to RCAs
newly launched Satcom 1 communication satellite. (Edgerton). While Levins name would

eventually be tarnished in the disastrous AOL-Time Warner merger in 2000, his decision to

hedge HBOs bets on the Satcom 1 satellite proved to be immensely successful. On October 1,

1975, HBO broadcasted a live boxing match between Muhammad Ali and Joe Frazier from the

Philippines via satellite. The 14 round heavyweight bout, which came to be known as the

Thrilla in Manila, was hugely popular and a great success for the three-year-old network. The

historic event ushered in televisions cable era (Edgerton), and marked the beginning a long and

storied relationship between HBO and boxing.

As a subscription based cable station, HBO operates in a distinctly different way than the

traditional television networks. These differences have profound effects on HBOs programming.

In 2004, after Janet Jackson exposed her breast during the Super Bowl halftime show, FCC

chairman Michael Powell promised congress that he would crack down on indecent material on

both network television and cable stations. However, the FCC had no legal right to back up

Powells pledge. Cable stations, like HBO, travel into homes via privately owned and maintained

hardware. The FCC can only regulate over-the-air broadcasters who use the publicly owned

spectrum. Therefore, HBO isnt subject to the FCCs indecency standards. In 1977, the U.S.

Court of Appeals upheld this right. According to the ruling, cable, which is purchased as opposed

to openly distributed like radio and network television, is more similar to newspaper publishing

and under the first amendment. (Strover). This meant that HBO could transmit explicit content,

so long as they did not violate obscenity laws. HBO is also not beholden to the wishes of

advertisers who want to present their products in an inoffensive way. This has created a

privileged position for HBO. Producers, writers, and directors are given greater artistic freedom
and dont have to cater to commercial interests. This has influenced the branding of HBO as a

provider of premium television, a channel where subscribers can view unique and original

programming. So-called premium programming such as The Wire, Game of Thrones, and The

Sopranos have attracted millions of subscribers and greatly elevated HBOs popularity.

However, HBOs status as a subscription based cable network has had a negative impact

on its boxing programming, and the sport itself. The economics of commercial television

revolves around networks, audiences, and advertisers. The consumer is the advertiser, and the

seller is the network that sells the audience to the advertiser. In order to maximize advertising

dollars, commercial networks attempt to create programming that will attract a wide range of

viewers. A show with high ratings will be attractive to an advertiser as that show will provide

access to a wide range of people. However, the economics of commercial based television are far

different than the economics of subscription based television. In subscription television,

networks are concerned with selling the consumer a subscription to their network, as opposed to

creating a mass audience to sell to advertisers. Therefore consumers express a demand for

channels, rather than a demand for programs. (Baldwin). Pay channel subscribers must vote for

or against an entire channel of programs with their dollars. If they vote yes, they receive many

programs which they choose not to watch. If they vote no, they deny themselves some attractive

viewing opportunities. (Baldwin).This means that HBO can ignore individual ratings, because

all HBO needs to ensure is that they deliver to each subscriber a channel worth paying for.

(Kelso). For example, a subscriber may be upset that theyre not getting quality boxing matches,

but ending their subscription means that they wont have access to all their other favorite

programming on HBO. An anonymous HBO executive once declared in The Economist that,
We dont care how many people watch our shows. We just want people to decide at the end of

the month that its worth renewing their subscription. (Economist). The benefit of this network

structuring is that HBO can afford to experiment with programming content, as HBO will still

earn the same amount of revenue, regardless of that shows success or failure. However, this

leaves certain kinds of programming on HBO vulnerable to neglect.

HBOs subscription structure allows for bad boxing programming in theory, but is boxing

on HBO actually a marginally good product? The answer is yes. Just as in any sport, fans want to

see the best competitors competing against each other. However, it is in the interests of

individual boxers and their promoters to fight against far weaker opponents. Promoters want

their fighters to have high win vs. loss ratios in order to increase the value of their fighters. They

do not want to take chances, and when they do, those chances are highly calculated. For

example, in 2007, HBO Sports President Ross Greenberg initially declined to buy a rematch

between Wladimir Klitschko and Lamon Brewster. Brewster had previously beaten Klitschko,

though he was now a far weaker opponent who had not won a fight in two years and had

undergone numerous orbital surgeries. (Hauser). However, HBO eventually decided to buy the

fight, and no one was surprised at the results. Klitschko pummeled the outmatched Brewster, and

the fight was called to a halt just after six rounds. HBO could have taken the money it spent on

license fees and promotion for the fight and spent it on meaningful, competitive fights.

Greenberg appeared to be aware of this issue, but ultimately the network overspent on a poor

matchup that resulted in a terrible boxing match. (Hauser). This happens repeatedly because the

pressures on HBO to create a compelling matchup are not as great as the pressures that HBO
faces from boxing promoters. So over time, HBOs subscription-based model has led to less

quality fights.

HBOs pay-per-view model has also had negative effects on boxing. The term

pay-per-view was coined in the early 1980s, though it was originally developed by Zenith in

1951 as a part of their Phonevision system, and was later developed for cable in 1972 by Mission

Cable. (Mullen). Essentially, pay-per-view is a type of service in which subscribers of a

television provider can purchase programs to view via private telecast. Pay-per-view has been

used by HBO since their broadcast of The Thrilla in Manilla in 1975, and has brought in

immense profits to the network. For example, in 2006 HBO generated $117 million off

pay-per-view sales of boxing matches alone. (Hauser). However, pay-per-view has presented a

number of issues. HBO has a lot of boxing programming that is available to anyone that

subscribes to the network. However, the biggest fights occur on pay-per-view. Pay-per-view

fights can cost a viewer anywhere from $50-$150 per fight, which prices out many boxing fans.

This also has an effect on the future of the sport, because traditionally boxers come from lower

socioeconomic backgrounds. But this market is simply unable to afford to watch the biggest

fights, so those who are most likely to become boxers do not get any exposure to the sport.

Pay-per-view also creates misleading price signals. While pay-per-view boxing has

created a rise in HBOs profits, these profits from pay-per-view do not signal a willingness

among boxing fans to pay for matches. It only shows that pay-per-view has allowed the network

to capture consumer surplus. (Holden). Consumer surplus is the difference between what

consumers are willing to pay, and the amount they do pay, based on how much they value the

product and want to have it. HBO has been able to capture a demographic of people who highly
value boxing and will pay large amounts to view the biggest fights through the pay-per-view

model. However, the rise in profits from this demographic obfuscates the desires of the average

boxing fan. Because of these misleading price signals, HBO has failed to create boxing

programming that consistently pulls in casual fans of the sport.

So if pay-per-view is bad for the sport, why doesnt HBO do away with it? According to

Ross Greenberg, the former head of HBO Sports, boxing promoters force the network to use

pay-per-view. "I can't tell you that pay-per-view helps the sport because it doesn't. It hurts the

sport because it narrows our audience But the promoters and fighters insist on pay-per-view

because that's where their greatest profits lie... (Hauser). However, HBO cant just drop the

pay-per-view model, or promoters would simply take their fighters to another network that

would use it.

As shown from testimony of former HBO executives, the network knows that they do not

put together the best boxing product. The network knowingly puts on bad fights, and their

subscription structures allows for it, but why do it at all? Why not scrap boxing altogether, and

replace it with a more compelling and popular sport? The answer is branding. Boxing-related

programming is essential to the HBO brand. As previously discussed, HBOs unique status as a

subscription based network allows it to operate outside FCC and commercial regulations,

allowing them to create programming with far greater artistic liberty. HBO has used this unique

position to brand itself. It presents the profanity, violence, sex, and nudity that commercial

network television cant show. It presents life in all its grit and nastiness, unlike the sugar-coated

reality that the traditional networks present. Hence the networks catch phrase, It's Not TV: Its

HBO. HBO, with its emphasis on true daily life, is an obvious home for the brutish sport of
boxing. The network claims to be the home of boxing, and it needs to be the home of boxing in

order to maintain its brand. Also, due to its branding, they dont use the effective business

models that classic television networks have historically used with boxing. As long as HBO

continues to react to and against network TV (i.e. to define itself in relation to network TV) the

range of aesthetics and ideas available and acceptable to it will be significantly limited. (Ott).

Through HBOs successful branding, that have limited their ability to be successful with boxing.

Pro Sports and television have long been closely linked together. However, the

relationship between sport and television has often been one sided. It could once be said that

television will exist with or without sport, but that sport needs television to survive. However,

this balance has recently changed. With the rise of online video-on-demand services like Netflix

and Hulu, scripted content is not limited to network television. In the future, it is possible that

scripted content will no longer exist on television. Without scripted content, the next biggest

draw to television is live broadcast of sporting events. However, my analysis of HBOs handling

of boxing shows the issues that arise when television networks become closely aligned with

sports. When the media promote and own what they report on, there is room for major

malfeasance.(Miller). In my opinion, network executives need to be aware of how the innate

structures within television and their own networks influence the sport events they present. As

sports become more central to television networks, this awareness is essential in order to

maintain the popularity of professional sports.