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SPORT'S $5 MILLION PAYDAY
Jerry Kirshenbaum
January 25, 1971
It's the biggest in history—the brainchiid of show biz promoter Jerry Perenchio, who got Jack Kent Cooke to put up the money. Now they own the Ali-Frazier fight and they make a mint themselves
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January 25, 1971

Sport's $5 Million Payday

It's the biggest in history—the brainchiid of show biz promoter Jerry Perenchio, who got Jack Kent Cooke to put up the money. Now they own the Ali-Frazier fight and they make a mint themselves

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Just three weeks have gone by since Los Angeles talent agent Jerry Perenchio came along to grab off the richest prizefight in history, which makes it too early to tell for sure whether he will win his brave gamble or lose. For now, you would have to call it even-money, the same as the fight itself. "I'm trying to stage the Normandy invasion" is how Perenchio describes the situation, but as his promotion of the Muhammad Ali-Joe Frazier fight winds toward its March 8 consummation, he admits to just one possible problem: "I really don't know the first thing about boxing."

Few understatements are heard in the fight business, and this is not one of them. Until he signed them last Dec. 30 to fight at Madison Square Garden, Perenchio had never met either Ali or Frazier, and to this day he has yet to see Frazier in the ring. Before his emergence as an instant Tex Rickard, he had seemed content enough as president of Chartwell Artists Ltd., a successful (annual bookings: $30 million) Beverly Hills talent agency with such clients as Elizabeth Taylor and Jane Fonda. Perenchio's interest in boxing was strictly a fan's. He went to the Ali-Jerry Quarry fight in Atlanta last October, for instance, and he had hopes of attending the Ali-Frazier showdown wherever it might be held, but that depended, of course, on his getting tickets.

Now, far from merely going to the big fight, Perenchio owns it through a joint venture called The Fight of the Champions that he has formed with Jack Kent Cooke, the irrepressible owner of the Los Angeles Lakers and Kings. The money behind the promotion is largely Cooke's, but the deal is very much Perenchio's. As he works on the match out of Chartwell's offices in Los Angeles and New York, the 40-year-old Perenchio has a slightly harried air about him these days, but his boyish face becomes particularly anxious when you ask him about the financial projections—"the numbers," he almost mystically calls them—that he carries around in a ubiquitous black briefcase. They are very big numbers, for Perenchio bullishly expects Ali-Frazier to gross up to $30 million before his fingers get too tired to count farther.

Whatever disadvantages it might otherwise have, Perenchio's inexperience in boxing has certainly kept him from being lured into regarding this as just another fight.

"This one transcends boxing—it's a show business spectacular," he said last week in the kitchen of his hilltop Los Angeles home. It was barely 7 a.m. and his wife Jake was still asleep, but Perenchio, in pajamas and bathrobe, already had his briefcase open and the numbers spread out on the breakfast table. "You've got to throw away the book on this fight. It's potentially the greatest single grosser in the history of the world. It's like Gone With the Wind. And that's why I'm involved. I don't think it takes any special talent to put a couple of guys in the ring. The trick is to merchandise them properly."

Perenchio's idea of merchandising is the same as the whaler's: don't waste any part of the carcass. He plans to work every possible angle, from peddling a line of fight-night souvenirs and memorabilia ("This is a historic event, remember") to producing a feature-length documentary on the bout and its behind-the-scenes drama ("We hope to break some hearts") for distribution to movie theaters within 60 days after the event. The exploitation extends even to the two fighters' gloves, trunks and shoes, which become his property after the fight. "If a movie studio can auction off Judy Garland's shoes, these things ought to be worth something, too," he says.

Considering his enthusiasm, it is not surprising that Perenchio should occasionally be guilty of overreaching. In scaling the house at Madison Square Garden, for instance, he pushed for $250 ringside with a $500-a-seat "Golden Circle," but the Garden prevailed on him to back off. "We didn't want to be accused of gouging the public," explained a Garden official, the resulting $150 ringside price apparently being below the gouge level. Another Perenchio scheme is to sell commercials during the closed-circuit TV coverage for a total of $4 million or so. Apart from obvious problems that would result from an early-round finish, and assuming that a $4 million figure is otherwise realistic, potential sponsors are sure to have some questions before hitting a noisy captive audience that has already paid up to $30 a seat (the closed-circuit TV top scale envisioned by Perenchio) with commercials.

But then, the finances of this fight have an almost surrealistic quality and anything is possible. At stake, first of all, is the record $5 million payoff—a fiat $2.5 million each—that Cooke and Perenchio have guaranteed the fighters. To cover that guarantee, Cooke put up $4.5 million, with the remaining $500,000 coming from Madison Square Garden. Delighted to put on the fight after making an unsuccessful bid of its own against Perenchio's, the Garden, in fact, agreed to pay Fight of Champions a little more than that: $700,000 or 70% of the live gate, whichever is larger. Its own gross would be 30% plus a cut of the closed-circuit TV proceeds from New York and Illinois.

For the Garden, which has had its financial difficulties of late, it adds up to a tidy windfall. A sellout crowd of 20,000 will yield about $1.25 million, and if there is one certainty it is that the Garden will be sold out.

The stakes Perenchio and Cooke are playing for go far beyond the live gate. To cover Cooke's $4.5 million investment, plus $1 million or more that Fight of Champions is likely to incur in promotion expenses, the fight would have to gross something like $9 million from all sources. Although documentary films, historic mementos and the rest are nice, the only proven way to make a heavyweight title fight pay these days is with closed-circuit TV. Allowing receipts of $1 million-plus from the live gate and another $1 million or so from foreign rights, this means the match would have to gross roughly $7 million from domestic closed-circuit TV for Fight of Champions to break even. The biggest closed-circuit take to date is $3.2 million for the first Patterson-Liston fight in Chicago in 1962.

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