New York: Embracing Inevitability
Published by Jim Genia on January 25th, 2010 in Current Events

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New York Governor David Paterson has unveiled his proposed budget for the 2010-2011 fiscal year, and one of the much ballyhooed provisions contained within is the acceptance of legalized mixed martial arts as a taxable revenue generator for the cash-strapped Empire State. This alone is a huge step forward. Last year, the bill that would’ve repealed the ban on pro MMA – a ban that’s been in place since 1997 – cleared every legislative hurdle and was ridiculously close to becoming law, yet an unforeseen and unrelated upheaval in the State Senate derailed that train. Now, however, it’s the surest of sure things, for when New York’s top executive goes so far as to “put money on it�, he’s not just throwing it out there. He’s embracing inevitability.

Part and parcel with Governor Paterson’s budget proposal is a brand-spanking new bill to make the sport legal, this one a bit different than last year’s “close but no cigar�. The salient details include: a broader scope of licensing powers for the athletic commission; a tiered fee structure based on event size; provisions for penalties; an 8.5% tax on gross ticket sales; and, a 3% tax on gross receipts for broadcasting (with a $50,000 cap). What does this all mean? Ultimately, it all translates into money for New York State, and the only eyebrow-raising points are the taxes, which are higher than those in other states and may prove to be a tough pill to swallow for promoters thinking of taking a bite out of the Big Apple. (Comparatively, the Commonwealth of Pennsylvania charges a 5% tax, while New Jersey’s sliding scale ranges from 3% to 6%). But as a Garden State official put it, these high taxes will only push events out of New York City and into distant upstate locations, “where the venue will waive the site fee in exchange for keeping the money made on concessions.� Conversely, the high taxes won’t impede the big boys, like the UFC and Strikeforce, from coming to Madison Square Garden at least once or twice, nor will it stop any promoter looking to make a splash in what is arguably the media center of the universe.

Other notable aspects of Governor Paterson’s MMA bill include a statutory allowance for single-night eight-man tournaments (but a prohibition against 16-man tournaments; a fighter can only fight three times within 72 hours), a prompting for the athletic commission to approve more martial arts sanctioning bodies, and a definition of professional mixed martial arts competition that leaves the current amateur loophole wide open (it’s this loophole that permits underground shows). These are all game-changers in terms of altering the sport’s East Coast landscape.

This is, of course, all pure speculation until the bill becomes law, and it must first pass successfully through both the Assembly and the Senate before that can happen.

As we learned last year, anything can happen between when the bill gets introduced on the legislative floor to when the governor can legitimize it with his signature. Literally, anything.

Governor Paterson anticipates a recurring net revenue of $1.37 million from sanctioned MMA, and to snag that revenue, “Additional staffing is recommended for the Athletic Commission to regulate the conduct of professional mixed martial arts competitions in the State.� With a newly-minted legalization bill within his budget – complete with dollar amounts and predictions – plus the recommendation for more staff to handle the sanctioning legwork, it’s clear Governor Paterson has got his arms firmly around mixed martial arts. And he’s squeezing tightly.