Patrick McKendry is a rugby and boxing writer for the Herald.

Business of boxing: Big risk bringing Joseph Parker's heavyweight title bout to NZ

The build-up to Joseph Parker's world heavyweight boxing title bout in Auckland has been about the money to finance the fight. Patrick McKendry attempts to unravel the costs and rewards.

Profit, break even, or loss?

Joseph Parker's promoters Duco Events won't know if they have made any money out of their heavyweight's world title fight against Andy Ruiz Jr at the Vector Arena on Saturday, December 10 until late on the night of the fight.

In fact, it may not be until the next morning when the pay per view figures are added up, before they know whether it's a plus or a minus.

Most Kiwi punters leave it until the last minute to make their decision to buy the TV package, so it all adds up to a hefty risk when you're putting on a fight costing just over $4 million, the most expensive in New Zealand.

"The people who say Duco will be making millions from this haven't got a clue," chief executive Martin Snedden said this week. "Some events we put on don't make any money at all.

But we just feel this is the best chance for Joe to win a world title and we're willing to back him."

The cost of putting on a world title fight is considerable, and much of it comes from paying the fighters, including the undercard.

Duco are Parker's promoters, but not his managers. The 24-year-old has his own management team, including mum Sala and at least one legal representative. Before each fight Duco will negotiate a fight fee for Parker, plus they will do the same for his opponent should they host the bout.

California-based Mexican Ruiz will not come cheap. It's a disadvantage for him to fight away from home, plus he will travel with an entourage of seven people, all of whom will stay at a five-star Auckland hotel for at least 12 days before the fight. All of their expenses will be met by Duco. That all adds up to big money.

He also has a canny promoter in Bob Arum, who will not settle for second best.

There are six fights on the undercard, some of whom feature New Zealanders, but not many. Australian welterweight star Jeff Horn, promoted by Duco, will fight, as well fellow Aussie Shannon O'Connell, a female bantamweight ranked second in the world. Both are in significant fights. Horn will travel with a support team of three, all paid for.

But while a quality undercard is expensive, it is also crucial to attracting international viewers. Australian viewers will be attracted to the card because of Horn and O'Connell.

Horn is fighting a South African, and there is a Ghanian featuring, so there is the African market covered. There will be two Argentines fighting separate fights, so there is the South American market, and so it goes.

Risk has come up a lot over the past couple of days, following the decision by central and local government to overlook the chance of a partnership (costing Duco a six-figure sum). In a delicious irony (which Duco won't comment on), the Samoan government has stepped up, promising US$100,000. Parker's parents Sala and Dempsey, named after former US heavyweight champion Jack, were born there, and the government are understood to be extremely happy with the exposure the country got during Parker's fight in Apia in January.

So instead of shots of Auckland's Waitemata Gulf, and Queenstown's Shotover River, during the telecast broadcast to 100 countries around the world, we'll be seeing the delights of Lalomanu beach and the Piula Cave pool.

But risk is something the company is used to. In 2009, one of the owners, David Higgins, gambled it all when backing the Tua v Cameron fight. And he struck the jackpot when the broadcast attracted the highest number of pay per views in this country. The number was around 85,000 and still hasn't been beaten.

Higgins told the Herald in March: "The fight came at the perfect time. It was a rainy night in October with no other sport on.

"Most pay per view buys come in the final 48-24 hours so you can imagine the day before the fight - we were quite a few hundred thousand dollars in the hole, looking at possible bankruptcy and simply hoping. We didn't break even really until the card had started and then we went into profit. It was probably the most memorable event of my career, a hell of a journey, and it paved the way for what has come."

When Snedden was asked this week if the Parker v Ruiz fight could get close to the Tua v Cameron level, he said: "We'd love to think so. That would take some of the risk out of things. But when Tua and Cameron fought, there weren't the platforms and media outlets there are now so it's become a little more challenging, but you never know, it could."

Martin Snedden, CEO of Duco Events. Photo / Greg Bowker
Martin Snedden, CEO of Duco Events. Photo / Greg Bowker

Snedden, a qualified lawyer, former New Zealand cricket representative and chief organiser of the 2011 Rugby World Cup, appears a methodical and sensible individual. That's why Dean Lonergan and Higgins hired him as their chief executive.

Asked if the business case for the Parker v Ruiz fight was an acceptable one, he said: "Yeah, in a long-term sense absolutely because if the home advantage is enough to tip a pretty even fight in Joseph's favour, if he manages to take advantage of home advantage and grab a title, then the long-term benefits for him and for us just keep growing. We're putting ourselves out there, but the beauty of having the sponsors come on board means we can understand how much of that risk we can mitigate straight away ... We're in the lap of the gods in some ways but that's the style of Duco. Lots of our events carry significant risk."

Duco had no contracted sponsors following Parker's last fight against Alexander Dimitrenko in Manukau in October, which makes the re-signing of the current crop all the more significant.

Duco, who consist of only 13 full-time staff, plus Higgins and Lonergan, have been on some journey since signing Parker in 2012. In between Parker's bouts - and he is one of the busiest heavyweights in the world, fighting about five to six times a year - the company also put on the NRL Nines at Eden Park and on February will stage the inaugural Global 10s rugby event in Brisbane.

You can imagine the day before the fight - we were looking at possible bankruptcy and simply hoping.
Duco owner David Higgins on backing Tua v Cameron fight

It is a journey which brought them to the door of Arum, the legendary Top Rank promoter who will turn 85 two days before the fight. Lonergan cold-called him about the possibility of Ruiz fighting Parker for the WBO title, and Arum said, "let's meet".

Next thing, Lonergan was dining with him at the Beverly Hills Hotel.

"Yeah, I was surprised," Arum said of the call, before adding: "They were nice guys and bound and determined to have this fight in New Zealand. I was prepared to do it in the United States, but hey, I'm glad we're doing it in New Zealand. It's something different.

Arum, who spends time in Los Angeles and Las Vegas, has been in boxing for decades, so he knows a bit about negotiating.

"They're very honourable guys," he said. "I like to deal with no-nonsense people. They're straight up. If they don't like something they'll tell you. You save a lot of time in that type of negotiation. It's not like when people agree to one thing and the next day they change it. They're good negotiators, they know what they want."

Arum has agreed to market the fight to North, Central and South American television. It could be a match made in heaven, but Duco can only wait and see.

- NZ Herald

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