While deep pockets allow the UFC to hold their mammoth event at Madison Square Garden, the new insurance costs put in place by the Commission have pushed local fighters and promoters out of the state.
(Brandon Magnus via Getty Images)
ON Saturday night, mixed-martial-arts’ biggest stars will shine bright beneath the lights of Madison Square Garden. Tens of thousands of fans will cheer a moment decades in the making. UFC executives will toast the achievement they’ve so long chased.
While the premier MMA promotion celebrates the historic first New York event, the boxing world collectively sighs as it faces the implications of MMA’s legalization in the Empire State. Smaller promotions across all combat sports come to grips with the changing tide in the state they call home. The UFC is here, and with it comes the New York Athletic Commission’s staggering new insurance policies. The fighters and promoters that have made their livings in New York long before the UFC are all but priced out.
The new bill passed by the commission in April raised insurance costs from $10,000 to $50,000 per event, and also added a $1 million policy per fighter in case of “traumatic brain injury.”
Boxing promoters immediately protested the $1 million policy, believing that no insurance company would underwrite such a plan and costs would be unmanageable. The bill came into effect on Sept. 1, with no changes from the Commission despite the outcry and negative publicity.
David Berlin saw this all coming. Berlin served as the executive director for the N.Y. Athletic Commission for two years, and worked diligently to create a better insurance policy when MMA’s legalization became imminent. The preexisting policy included two requirements: $10,000 for medical, $100,000 for benefits in case of death. Berlin altered the policy to $50K for medical, $50K for death benefits. This change struck a proper balance: protect the fighters, without making events cost-prohibitive for promoters. The costs for a promoter to put on an event would be in the realm of $4,000, an increase of a couple thousand. Reasonable, the promoters said.
Then, the $1 million provision was added by the legislature without warning. Berlin knew the decision was uninformed to the point of potentially grave consequence. Costs for promoters would be many multiples of what they had been, both with the old requirements and with Berlin’s carefully crafted $50/50K plan.
“It was immediately apparent that this was going to perhaps wipe out boxing in New York,” Berlin said. “And it would certainly wipe out the chance of any small promoter doing business.”
Berlin alerted his higher-ups of his concerns, specifically referencing his conversations with insurance brokers concerning the policy’s costs.
Months before the bill would come into effect, Berlin was pulled from his position as executive director and “reassigned” to the legal department. Shortly thereafter he sent his letter of resignation to Governor Cuomo.
Lou DiBella congratulates Heather Hardy after her win at the Barclays Center (Ed Mulholland / Getty Images)
The response from boxing promoters came swiftly, but fell on deaf ears. Sept. 1 came and went, with no alterations to the insurance policy.
Respected promoter Lou DiBella, who has put on successful events in New York for decades, recently pulled his remaining shows from the calendar. In a public statement, DiBella denounced the legislature as “willfully ignorant of both the boxing and insurance industries.”
“This is a disgraceful abuse of legislative and state power,” DiBella wrote.
The most disheartening piece of the press release came in the form of boxer Heather Hardy’s statement. Hardy, a recognizable female fighter with a massive following in New York, saw her Dec. 16 show at the Barclays cancelled due to the new regulations.
“These news insurance restrictions are not just destroying the sport of boxing in New York, they are destroying my livelihood,” Hardy said. “Do you have any idea what life looks like for a professional boxer, especially one who is a female and a single parent? With these news laws…I don’t know how I’m going to survive.
“I’m going to have to go back to delivering books and answering phones to try to cover the bills.”
While not even Berlin was told why the legislature would pass a bill that claimed to protect fighters but instead hurt them, one would only have to look into New York boxing’s recent history for a potential answer. In 2013, Russian boxer Magomed Abdusalamov suffered irreparable brain damage after a bout at Madison Square Garden. An investigation found that the Commission acted with severe negligence after the fight, resulting in Abdusalamov receiving improper and delayed treatment which played a major role in his injury.
The new insurance policy would grant a million dollars to a fighter like Abdusalamov. Rather than protect a man or woman from sustaining a life-altering brain injury, the bill seems instead content with protecting the Commission from scrutiny after the irreversible harm has already been done.
“This isn’t protective of fighters,” Berlin said. “It provides some money for their medical care once they’ve already been injured. I can’t imagine that a million dollars would matter to provide coverage for [Abdusalamov’s] medical care. It would be hard to believe that his medical care hasn’t cost millions upon millions of dollars. Therefore it becomes insignificant.”
In a statement sent to journalist Josh Katzowitz, the Commission responded to the press release with the kind of vague, empty language that DiBella anticipated:
“Documents to sell the required insurance for combative sports in New York have been submitted to the New York State Department of Financial Services. Everyone is working hard to arrive at a final product that will be available to promoters.”
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Big-name promoters like Lou DiBella and Bob Arum hope to use their public platform to create changes. Meanwhile, the smaller combat sports scenes in New York are struggling in relative silence, their voices insignificant to mainstream media and boardroom bureaucrats.
Natalie Fuz, head coach and owner of Chok Sabai Gym, has been putting on Muy Thai events in New York for years. Her gym, a stone’s throw away from Madison Square Garden, has been a hotbed for young Muy Thai fighters and has seen steady growth over the past decade. On Sept. 1, that momentum slammed to a halt, and even reversed.
When the new bill came into effect, the organizations that had sanctioned Fuz’s Muy Thai events for years suddenly threatened her with fines and potential suspensions. Suddenly, she is faced with a massive hole in her business’s profits, endangering her fighters’ chances to gain experience in New York.
“I’ve been in the New York scene for a long time,” Fuz said. “We’ve made so much progress in the last ten years. Now they’ve stunted the whole thing.”
Chris Romulu, owner of CROM Gym, sees the UFC coming to New York as similar to such an event in any other industry: the massive, financially-backed corporation comes to town and suddenly the locally grown, Mom-and-Pop businesses are pushed out.
“We’ve got a local coffee shop here in Rockaway Beach,” Romulu said. “And [the UFC’s entrance] would be the equivalent of a Starbucks opening up next door.”
A Muy Thai event is held at Chok Sabain Gym in New York.
While “the MMA Bill” includes language that states the Commission can alter the $1 million policy, they have yet to respond to promoters’ urges or discuss such an action. Berlin believes the Commission must take a stance, and soon.
“This policy that was meant to protect fighters is doing them a grave disservice. They don’t have the opportunity to fight in New York. It’s hurting fighters, it’s hurting promoters. Until somebody acts, that is not going to change.”
Whether or not it was an unintentional consequence of MMA’s legalization, the UFC may effectively be the only show in town when 2017 rolls around. And for a state that has hosted some of the most historic boxing events of all time, and served as a hotbed for bright talent in smaller shows, that is a harrowing reality.
After Saturday, the UFC will count its profits and peg new names and numbers into its record books. Meanwhile, the boxing staples of the city and the small shows begrudgingly cast their nets outside state lines. New York is no longer theirs.
By Sam Holzman // Interviews by Sam Holzman & Chris Grabowski