Oscar De La Hoya: The Best Businessman in American Sports
Posted Mar 7th 2008 7:30AM by Michael David Smith
Filed under: Boxing, Featured Stories, The Word
When Oscar De La Hoya purchased a piece of Major League Soccer's Houston Dynamo last week, the news didn't get much attention because, well, the MLS never gets much attention.
But it pointed to one quietly simple fact about De La Hoya, a champion in six weight classes: As fine a boxer as he is, his savvy as businessman is on a whole other level. This is the smartest businessman in sports.
Many elite competitors understand that it's the athletes who do the work but the owners who make the money. But De La Hoya is the one who has used his business acumen to control the means of production after years being used by it.
While professional athletes in the 21st century make the kind of money that their predecessors (not to mention you and I) could only dream about, they do not run their own show. As noted economist Chris Rock explained, "Shaq is rich. The white man who signs his check is wealthy."
De La Hoya is wealthy: Next month this extraordinary pugilist will make millions on a boxing match without ever stepping into the ring.
Bernard Hopkins (left) versus Joe Calzaghe will be one of the biggest fights of the year, and De La Hoya is promoting it. (There's a reason his is the happiest face of the three.)
This ability to take ownership of his sport makes De La Hoya the best. Compare De La Hoya to some of the other athletes who might stake a claim:
Tiger Woods: According to Sports Illustrated's estimate, De La Hoya was the second highest-paid athlete in America last year, making $55 million. Woods, who could be a billionaire by the time he's done, made about twice that much. But Woods has made that money because he's the best athlete ever to play his sport: When you're dominating golf -- the sport of the affluent -- like no one ever has, it's only natural that you'll get rich out of it. De La Hoya is nowhere near as good in the ring as Woods is on the course.
Michael Jordan: As the greatest athlete endorser of all time, Jordan changed the way modern athletes are used to sell everything from shoes to hot dogs, hamburgers to cologne to long-distance service. Like Woods, however, Jordan has once-in-a-lifetime talent in his sport, and that -- not Jordan's business sense -- made companies line up for him.
LeBron James: The other #23 talks a good game about becoming the first billionaire athlete, but to date he's been a Jordan-style pitchman. He's smart enough to recognize the value of the international market, but he remains one career-altering injury away from being another B-level endorser.
Magic Johnson: So impressive were Johnson's business pursuits during his playing career that they were featured on the cover of Sports Illustrated. His Johnson Development Corporation works with Loews theaters, Starbucks, T.G.I. Friday's and Washington Mutual to bring businesses into under-served markets and has a presence in 65 cities. That's a great accomplishment, but it has come from working with established businesses, not creating his own.
George Foreman: The mean, lean grilling machine has made Foreman $150 million, making it the single most lucrative sponsorship arrangement any athlete has ever had. Foreman is a born pitchman, but he was mostly was lucky enough to endorse a product that convinced Americans you could drain the fat out of red meat. Other products he's endorsed haven't been nearly so successful.
Roger Staubach: The Hall of Fame Dallas Cowboys quarterback has made a fortune as head of The Staubach Company, a global real estate advisory firm. Staubach used connections he made during his football career to begin in real estate, but there's really not much connection between his playing career and his post-playing career.
Billie Jean King: Her business sense may be the most like De La Hoya's, in that recognized the potential for female tennis players to organize their own tournaments. King, however, was more an activist than a businesswoman.
De La Hoya's top priority is a pure businessman, and I mean that in the nicest of ways: He's been around boxing his entire life and has seen that boxers are usually chewed up and spit out by the sport. He decided that he would use the sport rather than letting the sport use him, and the result is that he isn't just the most popular boxer in the United States, he's also the most influential boxing promoter in the business.
In January, when Kevin Iole of Yahoo! Sports ranked the 25 most powerful people in boxing, the list was dominated by those on the business side. Only four of Iole's top 25 were fighters, but De La Hoya was first, with Iole writing, "The Golden Boy is far and away the most powerful individual in the sport."
Previous popular boxers have lacked De La Hoya's business sense, often to such an extent that they filled arenas for years and then wound up broke. Joe Louis spent the latter portion of his life making demeaning performances in a futile effort to pay back taxes from his income as a boxer; Mike Tyson managed his money so badly that he declared bankruptcy after a career that netted him $300 million.
Even as professional athletes' salaries continue to escalate, smart players realize the importance of being more like De La Hoya and less like Tyson. The NFL and the players' union have teamed up on an executive education program that has about 120 NFL players enrolled in business courses this off-season at the Stanford Graduate School of Business, Northwestern's Kellogg School of Management, Harvard Business School and the University of Pennsylvania's Wharton School.
Maybe one of those NFL players who are learning about the business world will end up an NFL owner some day. That's the trail that De La Hoya is blazing.
As for De La Hoya's decision to buy part of the Houston Dynamo for a reported $10 million, that's a small-time investment. But soccer fans should be glad to know that De La Hoya considers MLS to be worthy of any investment at all. He doesn't bet the wrong way very often.