PELTZ SQUEEZES FROM BOTH ENDS IN DUAL ROLE

PELTZ SQUEEZES FROM BOTH ENDS IN DUAL ROLE – “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”– Abraham Lincoln

On the promotional front, I’m not sure there’s a more important issue for regulators than assuring that there is as fair and equitable a business atmosphere out there as possible.

Anyone who follows boxing knows that the television networks wield an awful lot of power, and that’s it’s not an easy thing to make a living in this business.

One thing you can be certain of – it’s difficult enough for a promoter to gain a foothold in the boxing industry without having to get the seal of approval from one of his (or her) own competitors for the right to do so.

Should networks, or their representatives, be allowed to compete for talent with the vendors who would solicit them? Does that not present a conflict of interest that is, at best, alarming?

Yet that is the situation we are faced with here.

J. Russell Peltz, a long-time promoter from Philadelphia, was brought aboard at the outset of ESPN2’s “Friday Night Fights” series as a “boxing coordinator”. According to Bob Yalen, ESPN’s director of brand management, “When we took on the Bill Cayton library (which incidentally, is the subject of a current lawsuit between Cayton and Peltz), my duties at ESPN were expanded to include a number of other sports categories, and they thought it might be helpful to bring in a consultant to lighten my load. So we brought in Russell.”

Peltz, together with Yalen, had the responsibility for fielding proposals from various promoters who sought to sell fight cards to the network.

While Peltz did not have sole responsibility for this, he had more than his share of it, and the way the position evolved, he and Yalen each had their own group of promoters they did business with on behalf of ESPN. In an earlier interview with us, Yalen said, a promoter “could call Russell or myself, depending on who he normally deal with, and we’ll weed it out and see who’s got the best show for the date.” Peltz told one reporter, when trying to explain why Sugar Ray Leonard Boxing was allowed to use Keith McKnight as an opponent for Joe Mesi on one of its April shows, “Bob has his guys, and I have my guys.”

To those of us in the business who were expecting that Peltz might step out of his role of promoter, at least for the time being, when he took the ESPN job, we were somewhat surprised. Not only did Peltz NOT recuse himself from promoting, he actually, as part of his deal, received up to seven TV dates per year of the 45 available on ESPN!

Those dates alone, plus anything else he could put together by his own devices, would afford Peltz a healthy schedule by which to keep any of his signed fighters busy.

Most people in boxing acknowledged that there was an inherent conflict of interest just by virtue of Peltz’ dual role, but it was generally concluded that his own credibility in boxing would overcome any suspicions, and that he wouldn’t jeopardize a good reputation in the business by abusing his position. And after all, at least the package of promotional dates he garnered as part of his contract was a fact that was known up front.

But circumstances have changed – considerably.

And we’re left wondering whether the old adage should be amended – whether it doesn’t take absolute power to corrupt absolutely, but if indeed, partial power is enough.

Perhaps it was just wishful thinking to believe that the conflict that everyone thought was just a possibility would never come to fruition, and have a far-reaching effect.

But results have demonstrated that the fears of some observers may have justified.

One illustrative example involved a promoter/matchmaker named Rick Glaser, whose fighter, Billy Irwin, had been used on Peltz’ shows at the Blue Horizon, and televised on ESPN2. Glaser had a promotional contract with the Canadian lightweight, and through his efforts, got Irwin rated the #1 contender by the IBF.

According to Glaser, Peltz was under the impression that he would be included as part of the promotional deal with Irwin, by virtue of the fact that he had put him into action on his own shows and featured him on the network.

Toward that end, Peltz sent a short memorandum to Glaser on December 27, 1999, in which Peltz sought a 50% piece of Glaser’s promotional interests. Glaser turned Peltz down, reasoning that “I don’t make deals like that. There was nothing to gain.”

Indeed, because Irwin was the mandatory challenger for IBF lightweight champion Paul Spadafora, Glaser didn’t need the help or influence of ANY promoter to secure a championship opportunity for his man. But Peltz knew exactly what he was doing.

Glaser eventually endeavored to promote a show of his own on ESPN2, featuring Irwin in the main event. He was turned down flat – first by Peltz, then by Yalen. He was given a number of different reasons – that he was inexperienced and unlicensed as a promoter, that Irwin was not enough of a name to be in the main event, that he would not “go in tough enough”, because Glaser would be protecting Irwin’s mandatory status. In an interview with Yalen shortly after our initial story broke, he expressed those same concerns to me as well.

“He (Glaser) isn’t a promoter per se,” Yalen said. “That’s not to say he couldn’t become one. We absolutely listened to what he wanted to talk about. Evidently he and Russell couldn’t come to terms on a match – about Irwin’s opponent, and the method to handle it, that’s where the problems were.”

To the savvy observer, however, the rationale seemed a bit transparent. For one thing, ESPN has, in fact, used more than one promoter without experience, including Larry McCartney, who is closely affiliated with Dean Chance’s International Boxing Association, Bjorn Rebney of Sugar Ray Leonard Boxing, and Jeff Fried, who had previously been the attorney for Mat Tinley and America Presents. Obtaining a license to promote is generally not problematic in most jurisdictions, and it is not unusual for a first-timer to wait until a show is at least in the serious talking stages before applying for the license.

As for Irwin’s status – how many #1 contenders did ESPN have an opportunity to show?

Glaser obviously smelled a rat, as did we. He went public with his grievance, revealing that he had been contacted by representatives of the FBI in connection with Peltz’ business practices, and investigated filing lawsuits against Peltz and ESPN.

Glaser’s claim was that Peltz, in effect, wanted to “freeze him” out of any involvement with Irwin, by creating the situation where Glaser couldn’t get any TV fights for him, thus paving the way for Peltz to sign Irwin himself and profit from the eventual fight with Spadafora. In point of fact, that’s exactly what wound up happening.

At the time of our original story about the Glaser/Peltz incident, I wrote:

“Peltz, in the process of being a promoter who pro-actively endeavors to invest in and guide careers, is engaged in the business of signing fighters to promotional contracts. As such, he is, in effect, in competition with other promoters in that pursuit – not necessarily the upper echelon promoters like Don King, Bob Arum, and Cedric Kushner, but certainly other mid-level promoters.

Essentially, in his current role with ESPN, Peltz finds himself in a position where he can exercise a certain level of control over whether the status of his competitors becomes stronger or weaker.

That’s a conflict of interest. And if Peltz has actively used his position to strengthen himself as a promoter relative to the industry, or weaken others, he’s in a possible restraint of trade situation.

It deserves some looking into.”

The only part I would change is the last line. It doesn’t “deserve some looking into”. It deserves immediate action.

Any extraneous circumstances that might have existed should be of no consequence at all. Maybe it would have ultimately made financial sense for Glaser to hand over 50% of his fighter to Peltz. Maybe it would have made moral sense as well, if Peltz had used Irwin on his Blue Horizon fight cards in the hope that he would be involved in the fighter’s career. Maybe cooperation with Peltz was absolutely necessary to advancing Irwin’s career at that point in time.

Still, it’s irrelevant.

Peltz was completely out of line approaching Glaser with such a proposal, so any explanations he may offer for his actions are completely moot.

Of course, he’s never offered any explanations to us. Peltz refused to comment to TOTAL ACTION regarding this particular story, other than to tell us at the time of our original story almost two years ago, “Nothing Rick Glaser said was the truth.”

Ironically, that, in and of itself, was a lie. I’ve seen a copy of the 50% agreement Peltz sent along for Glazer’s signature. It is timestamped for December 27, 1999 and has Peltz’ fax number stamped across the top as well.

What really matters, beyond all else, is that while he is an employee, contractor, or in any way represents the interests of ESPN, Russell Peltz has ABSOLUTELY no business making pitch for ANYONE’S fighters, particularly those he has done business with, either directly or indirectly, while acting in his capacity as a representative of ESPN, regardless of the circumstances.

If the people in the United States Congress are truly concerned about the welfare of the boxing industry, they’ll take steps to prevent these kind of situations from persisting.

fightpage@totalaction.com

Copyright 2002 Total Action Inc.

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