Originally posted by Dontae She'marc
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So there are a million ways to manipulate the purse. I'll give you some basic examples. Let's say fighter X is guaranteed $5 million per fight by his promoter. His promoter can pay fighter X $2 million to fight and $3 million to be hired as a spokesman to help market the fight. Thus the commission and sanctioning body, as well as possibly his trainer, are only getting a percentage of his "purse" of $2 million, while having no claim on his $3 million "marketing agreement."
Or, promoter pays $5 million to a shell company owned by fighter X to make fighter X available for the fight. Fighter X than pays himself $2 million to be hired by his own company to fight, thus making $2 million his "purse" while the other $3 million is corporate income, which you can then write off all sorts of expenses, not to mention be taxed at the lower corporate tax rate.
I can give you a million examples, but some of them are a little more borderline in terms of legality, so I'll just give you one more safe one since the game is to be sold, not to be told.
Promoter has the fighter "co-promote" the event. He's still essentially guaranteed $5 million, but you file $2 million as the purse. Then in the co-promotion agreement, the company of fighter X is entitled to the first $3 million of income from the promotion. So the fighter is taking no risk, but that $3 million is coming in as promotional income, and the fighter can even write off a bunch of bogus expenses from the promotion of the event.
These are just some very basic examples, but you get the idea.
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