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Opinion: MMA & #UFC in New York: Good for Surety Bond Providers

By Zach Arnold | July 1, 2011

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Opinion piece submitted & written by JW Surety.

Sanctioned Mixed Martial Arts (MMA) events are currently illegal in New York. Many people from both political parties are working very hard to change that fact and it has a lot of support, but the bill was repeatedly stalled and eventually killed in the State Assembly without ever coming up for a vote. Sanctioned MMA events being allowed in New York would likely be a boon to the local and state economies and the sureties industry.

Places where sanctioned MMA events are currently held require surety bonds for promoters. For example, in Ohio promoters are required to post two different surety bonds: The $20,000 Boxing, Mixed Martial Arts and Tough Person Promoters Surety Bond and a $2,500 tax bond that guarantees their payment of all taxes. If New York were to allow MMA events you could bet that would bring a whole lot of new money to the surety bond market.

New York would no doubt require bonds similar to those already in place for similar combative sports such as boxing. These bonds would probably be similar to those in states like Ohio, that is to say $20,000. That amount is pretty much the same in most states, although some states go at low as $10,000-$15,000.

For those unaware, surety bonds act as a sort of insurance policy, guaranteeing that services will comply with specific regulations and requirements. So in the case of MMA, a combative sports bond guarantees that fight promoters will act in accordance with all applicable state rules and laws. Surety bonds protect the party requesting the bond financially from failure of the party taking out the bond failing to abide by the guidelines they are required to by law or contract or court decision.

MMA promoters would no doubt bring events to New York, the largest media market in America. New York offers the fledgling sports everything it could want, a bright media spotlight, a huge population with large amounts of disposable income, and giant arenas.

Perhaps I should change that last one to famous arenas. UFC (the largest MMA organization) would love to host a pay-per-view event at Madison Square Garden. It would raise the sport’s profile around the country (and even the world) and gain it headlines announcing it as having truly arrived. It has frequently been referred to as the MMA’s Holy Grail.

Perhaps the craziest part of this entire ordeal is the massive amounts that New York would rake in from tax revenues. The estimated amounts seem to vary wildly, but what is known is that New York plans to tax MMA events 8.5% of gross receipt from ticket sales as opposed to only 3% for boxing. There would also be a much more reasonable 3% tax on gross receipts from broadcasting rights. MMA would be unfairly penalized in this tax code for no reason, but it means that any large MMA event overwhelmingly favors the state.

So, New York would be good for MMA and MMA would be good for New York. What’s the hold up? Well, MMA in New York actually passed the State Senate, but was held up in the State Assembly by Speaker Sheldon Silver who claimed that it didn’t have the support.

However, it actually passed the Assembly Committee on Tourism, Arts, and Sports Development and the Codes Committee. It was then killed by the Ways and Means Committee that excluded the bill from the agenda. The real problem is that in the New York legislature what Silver says goes. So until he either leaves office or gets on board, no MMA bill will likely pass in New York.

With the potential boon to New York’s surety companies and the state’s economy as a whole, it’s time for MMA to be welcomed to New York.

JW Surety Bonds is a family owned agency established in 2003, located just outside of Philadelphia.

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