NY regulations will prohibit all but largest promotions

Now that the hangover from the celebration of soon to be legal MMA in New York is over its time to face one sober reality. New York’s legislation will, in practice, only allow the biggest players to legally host professional MMA bouts in the State. Why? The legislation brings with it a steep insurance requirement, one that only deep pocketed promoters can realistically hope to afford. In short the legislation requires a minimum protection of $50,000 of coverage per licensed professional for medical surgical and hospital care for injuries sustained in an event. Additionally the insurance must offer a further minimum of $1 million of coverage for life-threatening brain injury. The relevant provisions read as follows:

All persons, parties or corporations having licenses as promoters or who are licensed in accordance with section one thousand seventeen of this article shall continuously provide accident insurance or such other form of financial guarantee deemed acceptable by the commission, for the protection of licensed professionals and professional wrestlers, appearing in authorized professional combative sports or wrestling exhibitions. Such accident insurance or financial guarantee shall provide coverage to the licensed professional for: medical, surgical and hospital care, with a minimum limit of fifty thousand dollars for injuries sustained while participating in any program operated under the control of such licensed promoter and for a payment of fifty thousand dollars to the estate of any deceased athlete where such death is occasioned by injuries received in this state during the course of a program in which such licensed professional or professional wrestler participated under the promotion or control of any licensed promoter; and, medical, surgical and hospital care with a minimum limit of one million dollars for the treatment of a life-threatening brain injury sustained in a program operated under the control of such licensed promoter, where an identifiable, causal link exists between the professional licensee’s participation in such program and the life-threatening brain injury.

Some stakeholders in the industry have informed me that few insurers would be willing to take on the risk to provide such coverage. I am not expert in insurance price points for combat sports but one person who is, John McCarthy, speculated that the cost of a policy that complies with New York’s legislation will run a promotion around $100,000 per event and contrasted this with other jurisdictions such as California where the insurance requirements set back promoters between $2,500 and $5,000. McCarthy stated as follows this week on his Let’s Get it On Podcast –

The one thing that needs to be brought out here, is this is legalized MMA in the State of New York, but there’s some additions to this…there’s not going to be small promoters doing MMA in New York, not professional, because there are regulations as far as insurance policies and stuff. Insurance policy for one show is going to cost about $100,000. Now the UFC can afford that, Bellator can afford that, maybe the World Series of Fighting can afford that, but nobody else can…If you’re looking in the State of California, how much is an insurance policy for a show? The insurance policy for a show is going to be somewhere in between $2,500 and $5,000….What has been passed is great, I’m all for it, its the step in the direction but only a couple of shows are going to be able to go there.

This is not a criticism of the long overdue legislation. It is good to see government seeking to protect the athletes that put their health on the line for the entertainment of the public and potential profits of promoters. It is simply an observation worth noting. Professional MMA will be legal in New York as soon Andrew Cuomo puts pen to paper. From there only the big fish will get to play in the Empire State.

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Erik Magraken is a British Columbia litigation lawyer, combat sports law consultant, and deeply, deeply appreciated UGer.