State Assembly Paves Way to Give Bout a Big Break

SACRAMENTO —  Boxing promoter Bob Arum has won Round 1 in his fight to receive a $350,000 tax break from the California Legislature.

Arum and Tim Leiweke, president of Staples Center, are pushing for California’s 5% tax on boxing shows to be capped at $50,000 for the welterweight match scheduled there in June between Oscar De La Hoya and Shane Mosley.

Otherwise, they argue, there is little chance De La Hoya will fight a major opponent in his hometown of Los Angeles--or that California will host big-ticket boxing events, because other states do not impose such burdensome levies.

Lawmakers are apparently swayed. The state Assembly unanimously agreed Monday to fast-track special legislation by Assemblyman Gil Cedillo (D-Los Angeles) to make the tax break happen. Cedillo’s bill, which would permanently cap the tax at $50,000 for all future fights, is now scheduled to be heard before the Assembly’s Governmental Organization Committee. In the long run, Cedillo believes capping the tax will earn California much more than keeping it unlimited.

A sellout for the June 17 bout--which is likely, since De La Hoya and Mosley are both from Southern California--would generate $8 million, or a $400,000 state tax bill. Los Angeles also has a 3% tax on boxing, and the two could combine to dim Staples Center’s prospects of becoming a fight mecca, some argue.

“Bob Arum wants to pay taxes. He also wants to bring fights to Los Angeles,” said Arum’s spokesman, Bill Caplan. “But the tax is too much. Wouldn’t you rather have the income than not have it?”

Hoping to lure big-name fights back to Madison Square Garden, New York last year capped its boxing tax at $50,000. Nevada has a 4% tax on boxing shows--a levy that cost Arum $550,000 last year for the widely anticipated De La Hoya-Felix Trinidad welterweight title fight. But Las Vegas casinos provide generous subsidies to lure fights.

Nevertheless, the California State Athletic Commission opposes a cap on the boxing tax, which helps fund its operations.

In an unrelated matter, the commission recently persuaded the state attorney general to investigate Arum for allegedly making improper payments to the International Boxing Federation, one of boxing’s many sanctioning bodies, in 1995.

“It sets a bad precedent,” said the commission’s executive director, Rob Lynch. “What you do for one promoter, you have to do for all of them. We already have more fights than anywhere else.”