In an odd lesson of “be careful what you wish for,” it looks like politicians in New York are taking the UFC’s talking points about revenue very seriously. The AP report on the UFC’s legalization effort also has an interesting note on tax plans of certain politicians:
Englebright said he was looking at revenue implications for New York during these dire economic times. He said he made changes to last year’s bill, including increasing the state’s share of gate revenue from 3 percent to 10 percent. The bill will have a three-year sunset clause, giving the state a chance to study the sport.
For the UFC, it’s not a huge amount of money. If they do a 4.5 million dollar gate, it’s the difference between $450,000 and $135,000 in taxes. It’s a significant amount of money, but not enough to dissuade them from coming to New York. As usual, however, the UFC will likely only bear a small portion of the tax increase, and will likely pass it along through lower discretionary bonuses.
The pain here will be for smaller MMA companies trying to run in New York, already facing losses, and barely able to survive. The likely outcome in my view is that few companies will be able to pay a 10% gate fee in addition to their state and federal obligations.