OK vs. UFC: How a Pay-Per-View Fee Jab Could Become a Knockout Punch
Professional fighters are licensed to take the ring in Oklahoma because the bell sounds at combat sports events in other states and countries.
But the Ultimate Fighting Championship is threatening a lawsuit over fees the State Athletic Commission collects for pay-per-view television events.
The latest round has opened at the state Capitol, where the heavyweights fight with tight fists.
The Oklahoma State Athletic Commission doesn’t receive any state funding, and its entire budget depends of fees and licenses for combat sports events. The commission licenses professional fighters and promoters, enforces health and safety rules and oversees fighting exhibitions and competitions.
Many of those events — whether they’re boxing, wrestling or mixed-martial arts — are fought live in front of Oklahoma audiences. The commission gets a cut — up to 5 percent — of money made at live combat sports events held in Oklahoma.
But most of the commission’s revenue comes from pay-per-view events held in other states, financial records show.
Athletic Commission 2011 Revenue
The UFC is threatening a lawsuit over the fees, which brought the commission more than $240,000 in 2011. No legal paperwork has been filed, but the commission was contacted by attorneys representing the UFC, says commission director Joe Miller.
The Oklahoma Attorney General’s Office is reviewing the constitutionality of the law, Miller says.
Marc Ratner, UFC’s head of regulatory affairs, said it boiled down to a legal matter. Ratner compared the matter in Oklahoma to a similar one Florida faced. A 5 percent pay-per-view tax was eventually wiped from the Sunshine State’s book, writes Josh Gross with ESPN.com.
The television audience for UFC is growing, but professional wrestling still dominates Oklahoma’s pay-per-view payouts, Miller says. If the UFC were to pull out of Oklahoma TV markets, maintaining the status quo at the athletic commission would be “difficult but doable,” Miller says.
But if the UFC legal threat leads to a repeal of the pay-per-view fee rule, the commission could be against the ropes, Miller says.
“It’s not just pulling the UFC out of it, it’s pulling boxing, wrestling and other combat sports,” he says.
If that happened, the commission likely wouldn’t be able to oversee live fights in Oklahoma, says Miller. Basically, the commission would only have enough money to license fighters. Even doubling the commission’s other fees wouldn’t replace the lost pay-per-view revenue.
[bill id=”SB 1533″ state=ok session=”2011-2012″ align=right]
The fight has moved to the state Capitol, where lawmakers are trying to offset some of the pay-per-view revenue through a state appropriation. This year’s state budget is relatively flat, and few agencies are likely to receive increased appropriations.
In March, Miller sent a letter to promoters alerting them that the commission was suspending applications for events scheduled beyond the end of the month. But the UFC has agreed to delay any action pending the outcome of the pending legislation, Miller says.
Still, a measure has been filed that would provide $200,000 to the athletic commission. The hope is that Senate Bill 1533 would prevent the UFC from filing a lawsuit. The bill won unanimous approval Wednesday by the House Appropriation and Budget Committee.
“I hate that — worse than anything — to have to do that,” Miller says. “But if that’s what it’s going to take, hopefully the legislature will stand behind us and appropriate the necessary amount of money.”