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There might be some big changes coming to the MMA business. My recent Bloody Elbow Substack long-form article detailing the troubles with California’s beleaguered boxing pension fund exposed the financially delicate situation the Golden State is facing with combat sports.
Two state strategies for raising revenue on fights
You can either tax your way to increase revenue or you can attempt to recruit more high-rollers to bring shows to your state.
Facing a dilemma on how to backstop their troubled boxing pension, California is preparing to double the cap on gate taxes for major WWE, UFC, AEW, Bellator, Top Rank, Golden Boy, and PBC events. Assembly Bill 1703, which passed by a 78-0 vote, would raise the tax cap from $100,000 to $200,000 and divert a maximum of $65,000 per major event into their boxing pension fund. The state already charges a $35,000 TV tax cap and an $.88 ticket fee for the boxing pension fund.
AB 1703 would directly target professional wrestling and MMA events to backstop the boxing pension fund. None of the professional wrestlers or MMA fighters would receive a dime in benefits.
The same author of AB 1703, San Francisco Assembly member Matt Haney, is author of Assembly Bill 1136 which will fast track a brand new Mixed Martial Arts pension based on California’s boxing pension model.
These two Assembly Bills represent dramatic change to combat sports fiscal policy in California. It means a higher probability of A-Level major fight events staying away from the state. You’ll still get your B-Level and C-Level shows but the incentives to run mega-events in California are becoming fewer by the day.
For example, WrestleMania had back-to-back sellouts at SoFi Stadium. If California had implemented their new tax cap for those two days, the tax bill to WWE would be $470,000. $70,000 of that in TV tax and $400,000 in a 5% cut of gate taxes. $130,000 of that would go to backstop California’s boxing pension.
Which means that there are plenty of other states willing to poach events away from California. You would normally associate states like Texas or Florida as poachers. But what if I told you that one major big, beautiful blue American state is considering a dramatic change in their fiscal policy to encourage an influx of fighting events?
New York, New York
There are several different bills in the Albany Legislature that propose tax and regulatory reductions on combat sports. However, the three most aggressive Bills would certainly stimulate activity in the New York fight scene.
The first proposal would involve a significant tax reduction. Assembly Bill 5254 would lower the state’s tax on fight shows to 3%. The second proposal, Senate Bill 5953, would require the Athletic Commission to create recommendations to significantly lower barriers of entry for producing professional wrestling events. Current barriers for producing fight events in New York include high insurance, licensing, and bonding fees. A third proposal would streamline gate and TV taxes universally to 5%.
Bottom line? California is doubling down to try to backstop some increasingly worrisome shortfalls. New York is considering a bold experiment to go in the complete opposite direction. Should the bills in both the Sacramento and Albany Legislatures pass, we could see a transfer of bigger fight shows from one big blue state to the home of Big Blue. There are a lot of interested parties waiting to see how this situation plays out.
What do the major fight promoters think about these proposals in California and New York? We would like to give you an answer but unfortunately nobody has expressed a willingness to go on-the-record with us.
Here is a list of people we contacted for comment on this story:
Chuck Kingsbury, Public Relations for WWE
Evan Korn, Public Relations for Top Rank Boxing
Dave Lockett, Public Relations for UFC
All Elite Wrestling, Public Relations
Danny Brener, Public Relations for Bellator
Tim Smith, Public Relations for PBC
Tim Lynch (Platinum Advisors), long-time Zuffa lobbyist in Sacramento
Brian White (KP Public Affairs), Endeavor’s lobbyist in Sacramento
If we receive an on-the-record response from anyone on this list of individuals, we will update this post with their comments.
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