I really think the decline of boxing was the result of a perfect storm of bad events and decisions rather than one particular event.
First, boxing always was something of the black sheep in sports and society. However, this was not necessarily a bad thing. It was always the sport of renegades and those who refused to accept the status quo. Muhammad Ali’s refusal to go to Vietnam is the most well know example of this, but it really was a continuation of boxing’s proud history of telling the man to stick it.
For example, in 1810 a guy named Tom Molineaux fought a fellow named Tom Cribb for the English heavyweight title (which in 1810 was, for all intents and purposes, the world title). Why is this noteworthy? Because Molineaux was an African-American former slave who was fighting for the world title a full 50 years before the Civil War and 137-years before Jackie Robinson broke the color line in baseball!
Former Heavyweight champion Jack Johnson, an African-American, married three times. Each of his wives were white (quite a scandal in the early 20th century, when this took place) and the man he defeated for the title (back in 1908) was a guy named Tommy Burns. Burns, a white Canadian, was at one point married to a black woman (also scandalous in 1908).
All of this leads us to the ugly part of boxing. Often times these rebels would come to boxing as something of an escape, only to find that society followed them into boxing. This led to an ugly side of the sport where these rebels often became personifications of larger social and cultural struggles. Jack Johnson became more than the heavyweight champion, he became a symbol of black pride and defiance, which created the “Great White Hope” mythology. A lot of promoters got rich hawking the next Great White Hope, because everyone in America was desperate to see Johnson knocked off his pedestal. The movement was in fact started by Jack London, who was relatively progressive for his era, but still wanted to see a white man defeat the black champion.
By the 1930s Joe Louis became a proud representation of what was great about America, and he showed it against Max Schmeling, the German Nazi who was considered a close friend of Adolph Hitler. Of course, Schmeling, being a boxer, actually bucked the system quite a bit in Germany. He had a Jewish manager, and years later it was discovered he saved the lives of two Jewish children during the “Night of Broken Glass”.
So to save boxing, part of it would require boxing to continue to be a representation of greater cultural struggles, which I just don’t think existed like they did in the early 20th century up to the 1960s. You really couldn’t have Ali emerge in the 1980s because there was not the cause that he represented. Naturally the first openly gay athlete to come out while still active was a boxer: a guy named Orlando Cruz. But thankfully we don’t live in a society where there is a call for a “Great Straight Hope” or where Cruz is demonized by a vast majority of American or even Latino sports fans (WBO President Francisco Valcarcel actually came out in support of Cruz’s decision).
The second problem was the emergence of multiple titles without the natural resolution of a unification fight. This really took hold in the 1980s and exasperated a major problem in the sport, one that really hurt the sport tremendously: competitive fights. Ali was popular because he was a great fighter in a great era. When he fought Joe Frazier in the Garden, people really didn’t know who would win. You had Frazier, George Foreman and Ken Norton all in the same era. By the 1980s the emergence of dozens of sanctioning organizations meant that you had numerous champions who were not fighting each other. Other than his fight with Gerry Cooney, Larry Holmes was never in a “pick ‘em” fight as a champion, and he had over 20-title fights! But had he fought Michael Dokes when Dokes was undefeated in 1982, followed by Greg Page in 1983, followed by Pinklon Thomas in 1984, followed by Tony Tubbs in 1985, then he would have had fights that fans could have gotten a bit more excited about. Sure all of those guys sort of flopped, but had they fought Holmes in unification fights at least fans would have been able to debate who would have won those fights at the time. Holmes almost surely would have beaten them all, but the boost to the sport would have been huge: undefeated champion versus undefeated contender/champion. Basically, the heavyweight division has been reliving Superbowl XX for the last forty years.
Third, I think West Ham and Magniac are correct. The loss of network boxing (which the Mancini-Kim fight had a huge influence on) coupled with the emergence of HBO took boxing out of living rooms and made it a much less assessable sport. Let’s be honest, if every NFL game was on HBO in the 1980s and the Superbowl was a $50 PPV, there would be a lot more basketball fans in America and a lot les football fans. Losing the network TV contract badly badly hurt the sport.
Finally, the Heavyweight division has been a mess ever since Ali retired. Holmes was a great champion and a great fighter, but he never had his “Joe Frazier”. His losses were either shocking upsets (Michael Spinks) or past his prime (Mike Tyson, Evander Holyfield). Mike Tyson was also a great fighter, but like Holmes, he didn’t have his Joe Frazier. All of his losses were either stunning upsets (Buster Douglas) or past his prime (Lennox Lewis) with one big exception: the second Holyfield fight, which sadly, didn’t help the sport much at all. The sport has not had an “Ali-Frazier” like fight between two dominant powerhouses in years, and the loss of access to networks has hurt American boxing quite a bit. Blairwitch is correct; we would need a dominant, personable, American heavyweight during the Lennox Lewis era. I don’t mean to sound ethnocentric, but America is where the money is in boxing (there is a reason why Lewis fought almost all of his championship fights in Nevada) and the presence of exciting American heavyweights is always a plus for the sport.