Boxing and wrestling were hugely popular spectator events at the time of this short. The ominous looking challenger with the long, vaguely eastern European name, was likely a send up of the Louis-Schmelling pugilistic contest held the year before.
The article on the right side of the newspaper appears to be a 1936 Summer Olympics article about Guillermo López, a Chilean boxer. López was eliminated in the second round of the flyweight class by losing his fight to the upcoming gold medalist, Willy Kaiser.
At 5:18 (right before the window gag), there is a noticeable jump cut where the music is suddenly different, indicating an edit. Whatever was excised is considered lost, as the edit dates back to 1942.