When casually speaking about boxing or MMA, we often call it "The Fight Game". Nothing could be further from the truth. Fighting is a businesS, not a game, and whether you are a boxer or a mixed martial artist, you better "protect yourself at all times" from a business perspective or else you will be left looking up at the lights. There are numerous horror stories about fighters who do not manage their finances correctly and end up either bankrupt or, for financial reasons, taking fights many years after they should hang up the gloves.
For every Larry Holmes or Oscar DeLa Hoya who makes money during his career and prospers after retirement, there are hundreds of Mike Tysons and Evander Holyfields who make and squander tens of millions of dollars simply because they did not keep a watchful eye on who was running their "business". For fighters, there is almost no middle-class. The old maxim that "5% of the fighters make 95% of the money and the other 95% scramble for what's left" is basically true. So whether you are a fighter in the top 5% or the bottom 95%, what can you do to help yourself to survive financially during and after your career?
- Always have an attorney review any contract before you sign
Understandably, fighters don't like the high price of retaining an attorney, but retaining an attorney is like having car insurance. You hate writing that monthly check to State Farm or Geico, but the one time you get in a car accident, you're happy that you paid it. As a fighter, you may not want to pay a few thousand to keep an attorney on retainer to review your contracts, but if your promoter, manager, or sponsor presents you with a contract that might cripple your career and mangle your finances for years to come, suddenly your attorney is your best friend.
- Handle your career like a business
I always tell fighters that your career is only a small "window" during your life, and with some luck, you will have a long, happy life once you retire, but you want to be able to retire on your own terms. The only way to do this is to make sure you treat your career like a business so that you will have some money left after the twilight of your fighting days.
a) Set up a company for yourself
By spending a few bucks to set up Bill Boxer, LLC or Joe Armbar, Inc., you will create an entity that you can use to write off certain expenses that you incur over the course of your career. Equipment, driving to and from the gym, meals, training expenses and a variety of other daily costs may be tax deductible. The less money you pay in taxes, the more money you have for you and your family.
b) Get rid of employees that are not worth what they're paid
Most fighters have to pay a trainer 10% and manager 10-33% right off the bat, which only leaves between 57-80% of your gross pay left for you to survive on. As you win more fights and become more successful, more people are going to want to work for you, be around you, and have their hands out trying to get into your pockets. The bottom line is that if they are not helping you make money, they shouldn't be getting ANY of what you get punched in the face to earn.
- Put aside 10% of your earnings in a retirement fund
Most fighters do not make very much money until they get into title contention, and the early purses are traditionally barely enough to make ends meet. But, if you can force yourself to put aside 10% of your purse from each fight, at the end of your career, with the interest that money will earn, you can find yourself ten to twenty years out with a nice nest-egg ranging from thousands of dollars to millions.
- Pay your taxes every year
Just like making sure you have a good attorney, having a good accountant can save you hundreds, or thousands, or even millions of dollars, but if you don't hire an accountant to make sure that your business is running correctly, the IRS (aka The Man) will knock you out faster than a James Kirkland overhand right. Unless you are a drug dealer and have an all-cash business, the IRS will find you and make you pay your debts. Wesley Snipes just spent his 50th birthday in a cell rather than in Hollywood making more classic movies like New Jack City and Jungle Fever. If the IRS can catch Nino Brown, they can definitely catch up to you.
As I wrote here last week, being a fighter is one of the hardest jobs in the world, but if you treat your career like a business and surround yourself with professional people that you can trust, you can make it worth the 25 years of left hooks, uppercuts, rear naked chokes, stitches and black eyes. Gregory Bloom, Esq. is a sports and entertainment attorney with ChaseLawyers in Miami, FL (www.ChaseLawyers.com). He has represented numerous high level athletes in both boxing and Mixed Martial Arts, and has handled complex, high-profile contract negotiations, sponsorship and endorsement deals, and brand recognition opportunities for his clients.