Tuesday, November 26, 2013

Boxing Manny Pacuiao: The Tax Angle

Even though the Golf Channel and the Tennis Crowd would like to depict boxing fans as a horde of knuckle-dragging troglodytes, some of the smartest people in the world are involved in boxing.

In a sport that can bring in $25-$40 million dollars from a single matchup, it's only natural that smart people would follow the boxing fans into the arena. One such smart guy is Bob Arum, who promotes Manny Pacquiao's fights. 

Arum was asked recently why Manny Paquiao, who has fought fourteen professional fights in Nevada or Texas, bringing in tons of revenue to those states, suddenly decides to fight Brandon Rios in Macau?  The question is particularly relevant when you consider that the overall purse was smaller in Macau than it would have been in the U.S.

Bob Arum has the answer: 

"Manny can go back to Las Vegas and make $25 million but how much will he end up with-- $15 million?" 

If you never think of these things when you're watching boxing, consider that the tax rate in Macau tops off at 12 percent.  Compare that with the U.S. at 39.5 percent and if you come up with the right answer, you may be a contender.  Another factor Pacquiao's people consider:  Texas and Nevada have no state income taxes.

The Arum quote, by the way, is from the Wall Street Journal today.  

No comments: