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Lamont Peterson's failed drug test demonstrates the costly balancing act event promoters face

Kevin Iole
Yahoo Sports

There is no person with any decency or sense of fairness who would knowingly advocate allowing a fighter who is using performance-enhancing drugs to compete. The risks are too great.

That's why the movement begun by Floyd Mayweather Jr. to implement random Olympic-style drug testing into combat sports is good.

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Lamont Peterson failed a drug test, putting his fight against Amir Khan in jeopardy. (Getty Images)

Even that doesn't come without risks, though, as Richard Schaefer, the chief executive officer of Golden Boy Promotions, sadly found out this week.

Schaefer can be thankful it was Lamont Peterson who flunked a drug test for an HBO-televised fight against Amir Khan that was supposed to be held on May 19 in Las Vegas, as opposed to Mayweather or Miguel Cotto, who met on May 5 in a wildly successful pay-per-view bout.

The cost to Golden Boy after the expected cancellation of the Khan-Peterson card is going to be around $250,000, perhaps higher. The total cost, to HBO and to fighters who now won't be paid, will likely exceed $1 million.

Given that event-cancellation insurance doesn't cover failed drug tests, that's money which is lost totally by Golden Boy. And because boxers are independent contractors who are only paid when they perform, none of them will earn their contracted salaries. Worse for them, they've gone to great expense to prepare.

Had it been Cotto or Mayweather who failed the test, though, the loss would have been substantially greater. It could have been as much as $6 million and perhaps $10 million or more.

Victor Conte, the founder of the Bay Area Laboratory Co-Operative (BALCO) and now an outspoken anti-doping advocate, said the fallout from the Khan-Peterson issue is the growing pain that the sport will experience while it rids itself of performance-enhancing drug usage.

Boxing promoters don't understand the complexities that are involved, he said, nor the risks.

"This is about the world of boxing existing in a cave in terms of anti-doping," Conte said. "They need to get up to speed and they need to learn these things. Unfortunately, I believe this is the type of situation it's going to take for them to learn what they need to learn so it can be as fair as possible to all parties concerned."

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The issue, though, is that there is no way to prevent against a financial loss when a positive test forces cancellation of a card. No one wants a chemically enhanced fighter who could seriously injure an opponent to compete. But with no way to adequately insure, dozens of parties can and will be out thousands, in some cases millions, of dollars when a fighter fails a test and a card is cancelled.

Figuring out how to deal with that is critical, because the vast majority of fighters, both boxers and mixed martial artists, don't have the kind of money to essentially self-insure against a positive test.

Mayweather would likely have it, and Manny Pacquiao probably would, too. But there are a slew of claims that could come out of this type of cancellation and there are less than a handful of fighters who could agree to be on the hook for such expenses.

"This is money that is basically being pissed away, not just by the promoters but by a number of parties, because of the actions of an individual fighter," Schaefer said. "That is just not right and, absolutely, it has to be addressed in the future. We are taking a huge [financial] risk and we are completely exposed."

Khan set up training camp first in the Philippines and then in Los Angeles to prepare for what would have been the most important fight of his life. Because Peterson failed to follow the rules and apply for a therapeutic use exemption for testosterone replacement therapy, Khan is out that money, as well as his purse.

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Amir Khan would have little recourse to recover lost earnings. (Getty Images)

He could recover his losses by suing Peterson, but the cost of litigation is high and it's unlikely Peterson would be in a position to pay. Plus, the last thing boxing needs is one fighter suing another over this type of thing.

It's a horrendous situation as it is, but it would have been a failure of epic proportions if it had occurred in a Mayweather or Pacquiao fight, ones that would generate far more than $100 million in revenue.

Fight organizers need to find a way to come up with a workable solution that eliminates as much performance-enhancing drug usage as possible while also protecting the rights of the innocent victims, such as other fighters, the promoters, the venue and all the way down to the folks who derive ancillary benefits such as cab drivers and hotel bellhops.

Travis Tygart, the chief executive officer of the United States Anti-Doping Agency, said contracts may need to be rewritten.

"Promoters don't want [the random testing] because of the potential risk, and as a business person, I can understand that," he said. "But they should insure and contract against it. They'll be forced to write slightly different contracts if they are serious. There are ways to deal with it if you value the health and safety of the athletes.

"It would be a huge deterrent to an athlete to know [he'd be on the hook for all those expenses] that I don't think any athlete would even be willing to take that risk."

Dr. Margaret Goodman, who runs the Voluntary Anti-Doping Agency (VADA) that discovered Peterson's use of synthetic testosterone, suggested via email that promoters check with Lloyd's of London.

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Top Rank's Bob Arum, who is not involved in the Khan-Peterson fight, said event cancellation insurance already costs up to eight percent. He said if any carrier would even consider insuring against performance-enhancing drug usage, it would go up many times that.

"They'll be asking for 50 percent and that's economically impossible," Arum said. "How can they write insurance? Basically, they're writing blind. When it comes to the health, they examine the fighter, they have doctors, records and his fight history, all of that, that they can look at. But no one has a record as a substance abuser? Who can get insurance for that or even figure out how to do it?

"The thing is, you don't need [event-cancellation] insurance if it's a team sport. If you lose the quarterback, the game goes on. Even in tennis, if you lose the big star, the rest of the event goes on. But in boxing and in UFC, where it is one-on-one and the event rests on one guy, [a positive test] is catastrophic."

Ultimately, there has to be enough of a deterrent against usage to make fighters choose voluntarily not to use PEDs.

Conte, who said he is not affiliated with VADA in any way other than as an advisor and consultant, said he understands the financial pressures, but said they shouldn't take focus off the real issue.

"Of course heads are going to roll when this kind of money is going down the drain," Conte said."I'm saying that a lot of lessons are being learned, and in some of these cases, it's the first time it is. That doesn't mean you don't have anti-doping [policies]; it means next time, you have to do it a little better and it can easily be done."

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