UFC to Hawaii? Not Anytime Soon

According to Dana White, the UFC won't be visiting the Aloha state at any point. If you haven't heard, an onerous tax has been placed on promoters strictly for hosting events. That's keeping White at bay:
White, in town to promote the Ultimate Fighting Championship's Jan. 31 fight between champions BJ Penn and George St.-Pierre, says the chances of holding a UFC event in Hawaii are all but dead.
The reason? It's too expensive, White says.
"We finally get some regulations and they slap this huge tax on us that's out of control, so probably never," White says. "I guess it's their way of saying 'OK, we'll sanction this, but we'll make sure nobody ever shows up and comes and does an event here.'"
The bill regulating MMA in Hawaii, which goes into effect July 1, has already hurt local MMA promotions -- including Icon Sport, which held possibly its last show in August after an 11-year run -- and X-1, which hasn't done an event at Blaisdell Arena since May and has been staging its recent shows at much smaller venues.
"Greed got involved and it's a travesty," Penn said. "The real travesty of the whole situation is the children who love fighting and train in people's gyms and love fighting now have people coming in who know nothing about the sport step in and ruin it for the kids.
Dr. David Mayeda and I talked about this, but he clearly knew more than me. Dr., if you're reading this, help explain what the actual terms of the tax are. In any case, the larger point here is that it's easy to blame ProElite for ruining the fertile MMA ground that is Hawaii, but the truth is it goes far deeper than the bureacratic mess in ProElite. And it's also illustrative of how improper regulation can keep out one of the healthiest businesses in a horrendously down economy. I doubt any UFC event will make or break New York State's budget, but certainly there is a cumulative effect to not maximizing a state's resources for monetary gain. Having the ability to host a MMA event the caliber of the UFC's should be a no-brainer, but not everyone in elected office is capable of grasping what appear to be basic tenets of governance.
UPDATE: Dr. Mayeda chimes in here to give a sense of what's going on in Hawaii and reader "cyph" gives us the skinny on the outrageous taxes. Thanks, gents.
Comments
From MMAWeekly:
Included in the new rules for the state of Hawaii will be the following:
* mandatory neurological testing of athletes
* disease and drug testing of athletes
* defining formal “rules” of MMA, including length of fights and rounds.
* criminal and financial background checks
* proof of medical insurance for fighters
* certified payment for athletes
* licensing of fighters & collection of fighter license fees 2 times per year.
Also as part of the new law, a new legislation of fees will be enacted for the promotions who wish to run shows in Hawaii and work along with the department in these new rules (previously they only paid the afore mentioned $500 licensing fee). The fees are as follows:
* 3% of first $50,000 gross ticket sales
* 2% of all gross ticket sales over $50,000
* 2% of all receipts from television broadcasting, internet, DVD sales, etc.
The first 3% and 2% are okay. It’s the 2% of all television, broadcasting, internet, DVD sales that’s the killer. Hawaii just banned MMA. Nice job, guys!
by cyph on
Nov 21, 2008 9:15 AM EST
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A down step in taxes after 50K? Are they trying to make it harder for small shows? I would think they would only want the UFC until you see the 2% cut of everything. That is like Boston Tea Party retarded.
by szucconi on
Nov 21, 2008 9:21 AM EST
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thats the point
they are severely limiting small shows with the first two taxes, then the larger promotions get hit with the broadcasting cut. They don’t want big or small. That’s what it looks like to me anyhow.
by jafotinatos on
Nov 21, 2008 11:23 AM EST
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That's nuts.
Normally you want big productions rolling into town, so you give tax breaks and incentives, not the other way around. They effectively cut off income from local businesses that could have benefited by the UFC coming in. Brilliant strategy.
by pud333 on
Nov 21, 2008 2:26 PM EST
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Hawaii’s not exactly the best run state in the US.
by Richard Wade on
Nov 21, 2008 2:34 PM EST
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2% of all receipts from television broadcasting, internet, DVD sales, etc.
Various states have a % tax on the PPV sales….. Nevada is one, I know that Florida has one on boxing PPV’s not sure about MMA but i would think so. Some states have sought to make themselves more attractive by not having the ppv tax…New Hampshire for one didn’t include this when legalizing mma.
I haven’t heard of the internet dvd etc… type stuff
Mike Goldberg on robnashville:
"His analysis is so analytical"
by robnashville on
Nov 21, 2008 6:38 PM EST
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cyph got the necessary info here.
We did a brief piece on the regulatory measures in our documentary by interviewing various politicians, a locally prominent ex-promoter (Pat Frietas; ICON), Dana White, and people from MMAHawaii.com. At the time of the interview, Dana White expressed enthusiasm about bringing the UFC to Hawaii.
There’s no issues with the medical part. Quite frankly, mandatory blood work, neurological testing and so forth is well over due in a state that’s had MMA running for so long.
Locally in Hawaii, the morale among hardcore fans, fighters, gym owners/coaches, and folks in the MMA media is luke warm at best. At the same time, many people feel the regulations, which have already gone into statute, will in fact squelch MMA in Hawaii. The regulations will not gonna kill it, but MMA was far more mainstreamed in Hawaii than any other part of the U.S., except maybe Nevada in the late 1990s and early 2000s.
ICON Sport (known previously as SuperBrawl) and Rumble on the Rock were two MMA promotions that would have 5,000-7,000 people in attendance pretty consistently back in 2001, 2002. I think politicians saw MMA in the post-2005 era, got greedy, and viewed the sports’ popularity as a money maker for the state. With the implementation of these regulations, they appear to be killing the goose that lays the golden egg.
What needs to happen now is for Hawaii promoters, fighters, and MMA media to collaborate. They have until July ‘09 to formally and strategically express their points of view. Although this has gone into statute, it’s not actually set in stone … yet. However, the MMA industry here essentially let this happen. A politcally savvy coalition should have been organized that hired a lawyer to protect the sport here.
It’s not just the regulations that are hurting Hawaii’s MMA shows. In addition, the sport’s changed. There’s more free MMA on television, and it’s possible the economy is hurting the industry. Unfortunately, the regulations will hurt the potential for MMA in Hawaii to get back to where it was a few years ago. A new MMA organization called Destiny is up and running in Hawaii, and there’s hope it will grow. X1 has really helped amatuer MMA fighters get experience, but it will also be harder for them to keep running big shows with pro fights.
by dmayeda on
Nov 21, 2008 9:43 AM EST
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Here is the information that cyph didn’t include. During the 2008 Legislative Session, the Department of Commerce and Consumer Affairs (DCCA), the department that the MMA commission will be administratively attached to, came to the legislature with legislation that proposed increases in the percentage rates to be collected by the DCCA. Here are the amendments that were made:
*In fiscal years 2009 to 2013, 4% on first $50,000 on total gross receipts on admission fees, and 3% on total gross receipts on admission fees over $50,000
*For fiscal years beginning July 1, 2013, 6% on total gross receipts on admission fees
**Upon the renewal of a promoter’s license (starting in 2011), each promoter will pay an additional surcharge fee of $16, 750 to be deposited in the compliance resolution fund; upon full payment of $335,000 for fiscal years 2007-2008 and 2008-2009 to cover the costs of implementing an MMA commssion, no surcharge will be assessed
The DCCA reasoned that these increases were needed to “sustain the program and minimize the burden on licensees.”
Like in most states, regulatory bodies in Hawai’i, like an MMA commission or insurance commission are funded solely through the collection of fees through licensing, fines, etc. No general funds (funds collected from taxes) are spent on these regulatory bodies.
The problem is that when a state goes from having very little regulatory oversight ($500 event fee) to establishing a commission that will be tasked with licensing and enforcement responsibilities, money for this transition is needed. In anticipation of such transitions, Hawai’i, like many other states, have what is called a compliance resolution fund. The money in this fund is distributed to departments that need to establish regulatory bodies or programs to comply with the law. The problem with receiving these funds is that they need to be paid back by a specified date.
I think it’s easy to say that greed was the motivating factor in passing this law when it’s difficult to understand why a financial decision is made that doesn’t favor those we support. Why did the legislature pass these exporbitant fees into law? The truth is that legislators are forced to make decisions on thousands legislative proposals within a short period of time without having personal knowledge about the problems these proposals may or may not address. As a result, legislators rely heavily on public testimony to make their decisions. Before being enacted, Senate Bill 3030 (the bill that was passes into law earlier this year) was scheduled for hearing on four seperate occaisions. In each of those hearings, the committees only recieved one piece of testimony. That testimony was on behalf of the DCCA, the very department that submitted the proposal to the legislature. How can the legislators make an informed decision about a measure when the only testimony they receive is from a governmental department that submitted it?
In my opinion, Hawai’i moved too fast to establish MMA regulation. I have spoken with individuals at the DCCA who admit that implementing this program was more overwhelming than anyone anticipated. I don’t think that any one group is to blame, but I am certain that if change occurs it will be the MMA community that needs to initiate it.
It is not too late, but if anything is going to be done steps, need to be taken immediately. Legislative offices are currently drafting legislation in preparation of the 2009 legislative session. Without cahnges to the statute, MMA in Hawai’i will die.
Here is a link to SB 3030.
by Kamakana Kaimuloa on
Nov 21, 2008 4:54 PM EST
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As a liberal, I hope liberal-ass Hawaii shows some tolerance for MMA and makes this happen.
by subo on
Nov 21, 2008 10:00 AM EST
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I’m sure old-timers have similar stories (see prohibition) but i’m not sure what this says about our current society that we purposefully ban internet poker (while sanctioning every sort of lottery/scratch off card imaginable) and effectively ban MMA in certain states. These are 2 of the fast growing and most popular interests of young people in America and the world. A source for job growth for the populace and for governments a chance to increase revenue (in a hurting economy) by appropriately regulating the sports. Why are we driving these great growth oppurtunities to other countries?
by !claw on
Nov 21, 2008 2:54 PM EST
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Because gambling and fighting are WRONG and EVIL! When will you grow up and realize this!?!
by AJB on
Nov 21, 2008 3:18 PM EST
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