A Reminder that Full Financial Disclosure in Professional Boxing is a Product of Law, Not Contract

The Association of Boxing Commissions’ “Unified Rules of Boxing” did away with mandatory eight counts and the three knockdown rule. In addition to the 10 count, however, at least two forms of counting remain universal and mandatory under U.S. law: revenues and expenses, or more appropriately, the disclosure of such counts. Accordingly, in reviewing a bout contract for a world championship bout recently, I was intrigued to see a provision which read “[p]romoter shall provide full disclosure to Fighter of all revenue sources and fight event expenses worldwide.” The inference appeared to be that the promoter, good citizen of Gotham that he was, contractually obligated himself to share with the boxer the financials that went into producing the contest and card as a whole. However, it is my understanding this should happen even without a contractually created obligation. Indeed, the language within the Ali Act could not be clearer:

“[a] promoter shall not be entitled to any compensation directly or indirectly in connection with a boxing match until it provides to the boxer it promotes: (1) the amounts of compensation or consideration that a promoter has contracted to receive from such match; (2) all fees, charges, and expenses that will be assessed by or through the promoter on the boxer pertaining to the event, including any portion of the boxer’s purse that the promoter will receive, and training expenses; and (3) any reduction in purse contrary to a previous arrangement between the promoter and boxer or a purse bid held for the event.”

The above-cited language does not suggest that the disclosure from promoter to boxer is multiple choice in nature. Nonetheless, this type of disclosure would likely be found to be fairly rare if one were to poll professional boxers to see whether either they, or their management/advisory team, received such information in connection with their last contest, regardless of whether they expressly requested it or not. The truth is, however, that the more this type of information is provided to, or otherwise acquired by, a boxer’s management or advisory team, the better position that they are in to either assure the boxer that he or she is being fairly compensated in the context of the promotion as a whole, position themselves to demand a higher base purse, or demand a percentage of the take of certain revenue streams. Moreover, without demanding such disclosure, the amount of money certain boxers may leave on the table is staggering, especially when one considers that every bout could be their last. Perhaps a promoter will decline to compensate your boxer further even if it is apparent that there is substantially more money being generated than what he or she is receiving, but are you really doing your duty to protect your boxer’s interests if you do not demand such disclosure? The answer is no, and you would not be doing you part to uphold the Ali Act either.

Please do not hesitate to contact the Law Offices of Paul S. Haberman LLC with questions on any legal, regulatory, or contractual issues that you may encounter in the combat sports world.