Finance: A Bully Market

If Shannon Briggs beats Lennox Lewis this Saturday night and wins the WBC heavyweight title, contenders will be lining up for a piece of him. To get one, they might consider buying a little-known stock traded on nasdaq under the symbol WWES. In October 1996, Worldwide Entertainment & Sports, which represents Briggs, became the first company of its kind to go public, and with Briggs on the verge of the big time, it may finally produce significant returns for investors.

Win or lose, Briggs gets $1.8 million for the Lewis fight, of which the New Jersey?based outfit takes one third. And if Briggs wins, he stands to make upwards of $15 million in a subsequent title bout against Evander Holyfield, bringing the cut for Worldwide’s management and shareholders up to $4 million.

Profiting off boxers’ careers is nothing new, but in the past the opportunity has been restricted to managers, agents, and a few large backers. Pegging the value of a publicly traded stock to Briggs’s success, while entirely above board, comes a bit closer to legalized sports gambling. Worldwide’s Marc Roberts, who also represents a number of football and basketball players, insists it’s just an innocent way for ordinary people to feel that proprietary thrill that fat cats get watching their star athletes compete. It’s sure been thrilling for him: Worldwide raised $8.4 million in its initial public offering.

But it’s been up and down ever since. After Briggs won a controversial split decision over George Foreman in Atlantic City last year, the New Jersey boxing commissioner who chose two of the three judges for the fight was accused by various sportswriters of “having ties” to Worldwide. Denials were made all around, and the commissioner was cleared, but the incident prompted Arizona senator John McCain, a sponsor of federal boxing legislation, to write the New Jersey Division of Gaming Enforcement demanding an investigation.

Worldwide survived the post-fight fracas, but its stock has taken a beating ever since. After initially trading at more than $5 a share, it dipped as low as $1.50 last month before mounting a slight comeback.

Whatever the company’s performance, Kevin Wynne, the president of the boxing division at the International Management Group, sees a conflict in merging sports and the stock market. “I think it raises a lot of questions,” he says. “It makes it more difficult to police conflicts when you have so many people involved.” Wynne describes a hypothetical situation in which a boxer is injured before a major fight. Stockholders would have a right to know that their investment was in jeopardy, but management would have an incentive to withhold that information, lest the ringside doctor call off the fight.

Roberts dismisses such concerns. “As long as I keep doing my job, at the end of the day all of our investors are going to make out real well,” he says. “I just know that there could never be anything bad coming out of a fighter making $50 million a fight.”

Finance: A Bully Market