United States boxing fans, we might be in trouble. If you're the type of American that actually likes to attend the biggest bouts, which by and large take place here in America, your option to do that might be off the table real soon. Not across the board, mind you, but with the news that Manny Pacquiao is fighting his next bout in Macau, and his promoter Bob Arum saying if that goes well, he might never again fight in the US, it has to make you wonder if a trend could be forming.
After all, you saw Sergio Martinez pack 'em in his native Argentina on April 27, when he fought and narrowly defeated Martin Murray. About 40,000 showed up for that card. Two of the games top five scrappers, guys who have done their business in America, are holding big bouts outside our confines, within a half a year. What gives?
Well, for PacMan (seen waving, not bye-bye to US fans, but to fans in Vegas before his fight with Tim Bradley, in Chris Farina-Top Rank photo) apparently, the operative word is “gives.” As in, he doesn't care to hand over about 40% of his earnings to the taxman, which he does when he fights in the US. Manny is a fixture in Nevada, which doesn't tax personal income, and that means he doesn't get whacked like he would in many other states, which would take another wad of cash. (If Manny Pacquiao fought at Madison Square Garden, he'd need to pay almost 9% to the NY state, and almost 4% in New York City tax. That's why Arum always says, whenever I pester him, that we will see Pacquiao fight in NYC when Chris Christie has a 30 inch waist. I kid…Arum says it will never happen.)
But the January rise of the federal top bracket, to 39.6%, from 35%, seems to be a tipping point for Pacquiao. I haven't heard Manny himself delve into this matter, though I have heard Arum rail about it, in person. Me, I'm not sure I even grasp the difference of 4.6% when we're talking a gross of about $20 million, and semi-casual students of our tax system know full well that the top marginal tax rate has been MUCH higher throughout our history; Arum would have blown his stack if Pacquiao was fighting in 1944, when the top rate was 94%. That was in effect to pay for World War II, of course. And Arum has been at this long enough to recall that the top rate didn't drop below 70% until Ronald Reagan took office, so if this top rate looks glaring now, some perspective might be palliative.
I did broach the tax issue with Pacquiao's trainer Freddie Roach a while back. He said he feels Manny's pain, as he knows he will have to pay the piper when he makes money overseas and brings it back to the US. “I get taxed, I can't hide it,” he said, chuckling. “But I think Bob is not just interested in taxes but in a new home for boxing. In Signapore (when Zou Shiming fought April 6) there was a lot more gambling than I ever saw in my life.”
Regarding those “new homes.” I do believe we will see more of this. As the world flattens out, as standards of living rise, as our brand of capitalism is embraced in more regions, as workers' wages rise in other nations, giving rise to better buying power for their burgeoning middle class, I suspect we will see more flight of fights.
It is for more economical minds than mine to hash out whether taking a fight to a place where, as in China, an average monthly wage can be like $700, will pay off in the end. After all, one can't charge the same for tickets or for pay-per-view over there. But…if Arum can charge $5 per pay-per-view, and enjoy the scale that the massive population could bring, he could earn the same, or maybe more, and have to share less with the government. Even he admits this is an experiment, by the way, though, and he isn't banking on the Manny-in-Macau show to establish a new paradigm when Pacman meets Brandon Rios in November.
Me, I'm not really crying a river over the thought of a shift to seeing more big fights outside the US, I guess, as I admit I enjoy the experience of watching bouts on a big arse screen in the comfort of my living room, with my DVR at my beckon call to allow me the luxury of rewinding. But this trend, or potential trend that bears watching, probably should alert us that boxing won't be immune to the effects of all these emerging markets. The athletes from all over the world have been catching up to Americans, challenging their supremacy in this arena and that. Economically, we are seeing some similar shifting of the plates.