Its easy to forget just how many ‘industries’ are actually are out there. Once upon a time, sports was a pastime. Now its an industry and courtesy of American Airlines seat number 33C, Miami International to London Heathrow, I got a window on one part of that industry: the world of professional boxing.
Now there are two things guaranteed to sustain my interest: sport and businesses that I know nothing about. Turns out my fellow passenger was a boxing manager and after a quick trip through our favourite fighters and favourite fights, we got on to something much more interesting: the business of boxing. Turns out, boxing is virtually devoid of big players, with the exception of the television companies from whom they derive the bulk of their revenues. Its a huge cottage industry with manager, trainers and promoters constantly in a state of flux, all making a living based on a percentage of the fighters purse. The equivalent would be Volkswagen teaming up with Bosch, Continental and all their other suppliers, based on a cut of the final sale price of a car. ten per cent for a manager, ten per cent for a trainer. Promoter puts up a purse. Every fight is hand crafted: all of the various players are brought together on one night and then disappear once the show is over: for one night only.
My fellow passenger had just returned from Madison Square Garden, his fighter was a world champion, but he had to run a second job to make a living. It turns out that very few people are making any real money, bar the really big promoters and the really big fighters. Everyone else has second jobs or gyms which draw in people who pay to associate with the ‘fight game’. But the passion is palpable. As with any industry, the rewards are disproportionately earned by the top players; its closer to the 95-5 rule than the 80-20. People are drawn to the sport and don’t want to leave because they love it. Is it inevitable that in an industry where people love their job, their reluctance to leave the industry drives down returns for everyone?