Law360.com reports that mixed martial arts events and other combat sports in New York state will pay more than 8 percent tax on gross receipts in addition to other tax terms in New York when the sport becomes officially legal on September 1st.
The UFC will debut in New York on November 12th in Madison Square Garden. On Friday, the company announced it would hold an event in Albany on December 9th.
Per the bill, a tax will be assessed of “eight and one-half percent of gross receipts from ticket sales” and “three percent of the sum of (i) gross receipts from broadcasting rights and (ii) gross receipts from digital streaming over the internet, except that in no event shall such tax imposed pursuant to this paragraph exceed fifty thousand dollars for any match or exhibition.”
The article states that boxing events in New York are assessed a 3% tax on gross receipts with a cap of $50,000.
Payout Perspective:
The 8.5% tax is a hefty bill for a promotion to conduct an event in New York. One would think that for the UFC, each event in New York in the next year or so would mean they would pay at least $50,000 per event from broadcasting/streaming rights. Of course, the $1 million accident insurance policy that promoters must purchase for events is another key provision to hold events in the state. The tax will likely prevent smaller promotions from holding fights in the state although I would expect the UFC, Bellator and WSOF will hold events in New York in the upcoming calendar year. The fight to legalize the sport in the state likely means promoters will be willing to pay the hefty price in the short term.
Boxing has been killed in NY because of the $1M insurance policy that is gonna start in September. Lou DiBella and Bob Arum have said so. Only huge boxing events may still be held in NY.
Such a shame.