The real battle began after Muhammad Ali and Leon Spinks finished fighting. No sooner had the two heavyweights left the Superdome ring than the principals involved in the promotion were swinging away, and in a matter of hours it was clear that it was going to be a more eventful fight than the one that preceded it.
The first sign of trouble was the discovery of two questionable $200,000 finder's fees. Then, in stunning sequence, came a $1 million suit charging misappropriation of funds, an inexcusable diatribe delivered by Ali, charges of ancillary rip-offs, a ticket-duplicating scheme that may have netted more than $500,000 and a $15 million slander suit. By last weekend, a U.S. grand jury had been impaneled in New Orleans, Justice Department subpoenas were issued and the FBI was impounding records in New York and Louisiana. FBI agents expressed interest in two of the local promoters, Don Hubbard and Sherman Copelin, as well as in high-ranking Louisiana political figures and an official of the Teamsters Union.
The story began innocently enough. Top Rank, which held all promotional rights to the heavyweight title fight, was looking for a buyer for the live gate. Bob Arum, Top Rank's chairman of the board, thought he had South Africa locked up for $5 million. But when the moneymen in Johannesburg asked for more time, Arum, with more than $7 million already assured from ABC and international closed-circuit television, sold the live gate for $3 million to a group of investors in New Orleans who were among those who had expressed interest in staging the fight.
From that point on, the plot thickened. In quick order, a number of teams and players were involved.
October 1, 1978
Team A: Louisiana Sports, Inc., which bought the live gate rights, plus some of the ancillaries. LSI consists principally of Jake Dimaggio and Philip Ciaccio, two white men, and Hubbard and Copelin, both of whom are black.
To make the deal, LSI received $3.6 million in financial backing from...
Team B: Civic Enterprises of Louisiana, Inc., known as the Lafayette Group. It consists of six wealthy and influential men from the city of Lafayette, and is headed up by Bob Wright, the president of the Louisiana Bar Association.
It should be recorded with an asterisk that while Louisiana Governor Edwin W. Edwards is not listed on Team B's roster, his actions at this point certainly didn't hurt their cause. "I made a few phone calls," said Edwards. The result of one call was quick legislative approval for reducing the state's special sales tax on boxing promotions from 5% of the gross gate to a maximum of $5,000. At the last yet-to-be-audited count—which is at least $1 million below educated guesses—the fight had a gross gate of $4,806,675. Even using that low figure, the state's share at the former tax rates would have been $240,333.75.
And after another of the governor's calls—this one to Superdome officials—the rental charge for the fight became $100,000, plus roughly another $75,000 for costs. Normally one night's rental for the Dome is 10% of the gross after taxes. The estimated savings as a result of that call: $300,000.
Enter now Team C, Corporate Management Ltd., which, surprisingly, turns out to be Copelin and Hubbard, who are hired by Team A to handle the daily operations—for which Copelin and Hubbard were each paid $55,000, plus unlimited expenses.
There is more. Along comes Team D, Sports and Entertainment, Ltd. of Delaware. This outfit consists of John Lewis—the father of Butch Lewis, then a Top Rank vice-president—and two friends. Copelin and Hubbard awarded them some of LSI's ancillary rights.
On Sept. 15, just seven hours before the fight, Arum and two of the LSI people, Dimaggio and Ciaccio, exchanged affidavits stating that Arum on the one hand and Dimaggio and Ciaccio on the other had been "duped" into paying $200,000 finder's fees to salaried employees. Arum said that he had paid the sum ($50,000 by check and the rest in a letter of credit) to Copelin and Hubbard at the urging of Butch Lewis. In turn, LSI partners Dimaggio and Ciaccio said that at the urging of Copelin and Hubbard, they had given $25,000 to Butch Lewis, with a promise of $175,000 more after the fight.
Copelin and Hubbard, backed by Lewis, said that they came by the money honestly for "finding" the fight—bringing it to New Orleans. (Later they would agree to give $45,000 of the money to Dimaggio and Ciaccio.)
Butch Lewis denied he had received $25,000 from anyone. "Old Butch never took a dollar, never asked for a dollar, and never gave back a dollar," he said. "Anybody says Butch did is a liar."
What Arum said was, "Lewis is fired."
To which Lewis retorted, "He's only firing Butch because Butch already quit."
Meanwhile, Canon Camera had paid $100,000 to Sports and Entertainment, Ltd. (Team D) for rights to advertise in the Dome. Canon paid $50,000 up front and sent another $50,000 to a New York City attorney who also represents Butch Lewis, the money to be held in escrow until after the fight. Only $20,000 of that amount was forwarded to Louisiana Sports, according to Dimaggio. Dimaggio further says that Hubbard told him Canon was only paying $20,000 for the advertising space. Apparently, Sports and Entertainment, Ltd. kept the remaining $80,000 for services rendered.
"I don't know anything about Sports and Entertainment, Ltd., except it is a company formed by my old man," Butch Lewis said. "Why can't my old man form a company and make his own deals?"
To which Ciaccio said, "It stinks. Who is kidding whom? It's ludicrous. What right did Hubbard and Copelin have to sell for $20,000 a deal which was worth $100,000? We expect to recover the rest of the money in court."
Even more money seemed to have gone astray. The contract to sell the fight programs at the Superdome was awarded to Theatrical Happening Inc. for $50,000. Last June 17, Lewis brought a man identified only as Harvey to the Top Rank offices in New York. Harvey, of Theatrical Happening Inc., was carrying $40,000 in cash. Lewis asked Arum if he would take the cash and give Harvey a check for the same amount.
"I told him no," Arum said later. "I thought the whole thing was insane. But I did say, reluctantly, that I would take the cash and put it on the books as a transaction deal, and then send a check for $40,000 to LSI in New Orleans. And that's what we did." The money was part of the $50,000 owed to LSI for the program rights.
"I don't know Harvey," Lewis said. "I just heard he owns some small grocery stores in Brooklyn or Queens. I suppose the program people paid the other $10,000 at a later date."
If the $10,000 was paid, Dimaggio and Ciaccio say they never saw it. "We were told by Copelin that we had sold the program rights for $40,000," Dimaggio said.
The program was one thing, tickets were another. Last week FBI agents began checking a report that at least 5,000 of the $100 tickets had been duplicated. One set was sold for $50,000; some phonies were discovered among the unsold tickets. It was also reported that the government agents had picked up a Teamster official who had 3,000 bogus tickets.
On fight night, early unaudited returns showed that 65,370 people paid to see Ali's victory. One veteran Dome official estimated the crowd count at closer to 71,000, and the gate nearer to $6 million than $4.8 million.
Less than 12 hours after the fight—after rounding up a judge on Saturday morning—Dimaggio, a traffic management specialist and wholesale liquor distributor, and New Orleans Councilman Ciaccio filed a suit in civil district court charging Copelin and Hubbard with misappropriating more than $1 million.
Over the weekend, at the urging of Bob Wright (Team B, the Lafayette Group), Dimaggio and Ciaccio met with Copelin and Hubbard. The latter two agreed to meet all Dimaggio and Ciaccio's demands if the suit was dropped. There would also be a statement saying that it was all a misunderstanding.
Dimaggio and Ciaccio, who each held a 21% share of LSI, had demanded from their two black partners their share of the $200,000 finder's fee paid to LSI by Top Rank, and insisted that LSI only pay $50,000 of an additional $250,000 in finder's fees still reportedly owed Lewis and Alden MacDonald, the president of Liberty Bank of New Orleans. MacDonald already had been given $25,000 for bringing the LSI people together with the Lafayette Group. Copelin and Hubbard agreed they wouldn't give Lewis any more money, and they would give MacDonald only two-thirds of another $75,000 promised him.
"We got what we wanted without prejudice," Ciaccio said. "We got $45,000 from the finder's fee, and we saved having to pay $45,000. But I didn't like that 'misunderstanding' thing. There was no misunderstanding. But Jake and I went along. It was a big mistake."
The statement that Copelin and Hubbard asked for was issued at 9 a.m. Monday. At 10:31, at a press conference planned the night before by Copelin, Hubbard and Lewis, Ali launched a stunning attack at whites in general, and at Jews and Italians in particular, and at Dimaggio and Ciaccio in absentia.
The press conference was just as shocking to the three blacks as it was to everyone else. They had hoped to use it as a step in forming their own promotional group. They thought they had Ali primed for a vitriolic attack on Arum. They had arranged for Bob Cole, a public relations man for LSI, to write a press release for Ali, in which the champion was supposed to praise the trio while destroying Arum. But when Ali saw the release—which already had been distributed—he refused to read it. With good reason: when Ali retires, he and Arum have a pact to copromote a series of elimination bouts, and then to copromote four world heavyweight title fights.
So, rather than attacking Arum, Ali instead charged that the $1 million suit against Hubbard and Copelin—which the parties had already agreed to settle—was racially motivated against black enterprise. "Why are they picking on niggers?" was one typical Ali remark. "Why do only the big Jews and big shots make all the money? To Jews and white people, money is God. From what I've seen, this is a black-white thing."
After that it got worse. But as Ali's harangue wound down, he was asked about the specifics of the suit he was berating. Ali jerked a thumb in the direction of Hubbard, Copelin and Lewis, and said, "I can't tell you exactly...but they can."
With that, Ali and his $3.5 million share of the purse left New Orleans.
Dimaggio and Ciaccio, angrily demanding that Ali apologize for the attack against them, filed a $10 million suit for slander. In Chicago, Herbert Muhammad, Ali's manager, was outraged. "This is not a black-white thing," he said. "I am very sorry this happened. I know, in my heart and mind, Ali is not a racist."
Dimaggio and Ciaccio, however, said their lives and the lives of their families had been threatened since Ali's statement. They asked for and were given police protection. And on Thursday, from Chicago, Ali issued an apology.
Dimaggio and Ciaccio said that the apology was not nearly enough. The $10 million suit was not withdrawn. Dimaggio demanded a public apology in New Orleans. Ciaccio said he would settle for an apology from Ali on national TV.
Meanwhile, they are waiting for an audit of the fight, which probably won't be completed until well into next month. The FBI has tied up the records of Hubbard and Copelin for the time being.
On Thursday, Dimaggio and Ciaccio, with their attorney William Wessel, met with Copelin and Hubbard at the Bank of New Orleans. According to Dimaggio, the scene went like this:
Turning to Copelin, Ciaccio asked, "Where's all the money? In what banks, under what names, and what are the numbers of the accounts?"
"I won't tell you," Copelin replied.
"Come on, Sherman, give us the damn banks," Wessel said.
"I won't do it," Copelin repeated.
"I'm the damn treasurer of the company," roared the volatile Dimaggio. "I demand you tell me."
"Absolutely not," said Hubbard.
On Saturday, Hubbard and Copelin filed a $15 million slander suit against Arum for calling them "hoodlums" and "dangerous people." The petition also claims that Arum repeated false allegations that Hubbard and Copelin sold tickets to seats not shown on the master seating plan and appropriated the proceeds and that they siphoned off ancillary income for themselves by negotiating contracts that should have accrued for the benefit of LSI.
On that note, the week closed. But don't throw away your programs. U.S. Attorney John Volz in New Orleans said the grand jury was looking into possible violations of federal laws, such as interstate transportation of stolen funds and mail fraud. And FBI Special Agent Francis M. Mullen, assigned to New Orleans, said his staff was conducting an investigation relating to the fight's finances.
Tune in next week.