[Senate Report 105-371]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
2d Session                       SENATE                          105-371
                                                       _______________________________________________________________________

                                     

                                                       Calendar No. 705


 
                    MUHAMMAD ALI BOXING REFORM ACT

                               __________

                              R E P O R T

                                 OF THE

                  COMMITTEE ON COMMERCE, SCIENCE, AND

                             TRANSPORTATION

                                   on

                                S. 2238

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


   October 6 (legislative day, October 2), 1998.--Ordered to be printed

                              ---------------

                     U.S. GOVERNMENT PRINTING OFFICE
69-010                       WASHINGTON : 1998






       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred fifth congress
                             second session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA SNOWE, Maine                 JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri              JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee                RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan            BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas                RON WYDEN, Oregon
                       John Raidt, Staff Director
                       Mark Buse, Policy Director
                  Martha P. Allbright, General Counsel
     Ivan A. Schlager, Democratic Chief Counsel and Staff Director
             James S.W. Drewry, Democratic General Counsel



                                                       Calendar No. 705
105th Congress                                                   Report
                                 SENATE
 2d Session                                                     105-371
_______________________________________________________________________



                     MUHAMMAD ALI BOXING REFORM ACT

  October 6 (legislative day, October 2), 1998.--Ordered to be printed

_______________________________________________________________________


       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 2238]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2238) ``A Bill to reform unfair 
and anticompetitive practices in the professional boxing 
industry'', having considered the same, reports favorably 
thereon with an amendment in the nature of a substitute and 
recommends that the bill as amended do pass.

                          Purpose of the Bill

    The purpose of S. 2238, as reported, is to protect 
professional boxers from coercive and exploitative business 
practices, assist state boxing officials to provide proper 
oversight of the sport, and increase honest competition and the 
integrity of the industry.

                          Background and Needs

  The Committee believes that a modest series of targeted 
public interest reforms of the professional boxing industry can 
have a very positive impact on the industry. The sport has no 
league or private sector association of industry leaders which 
has arisen to establish fair business practices and to 
discipline improper and arbitrary conduct. There has long been 
serious public concern about the continuing scandals and 
litigation which occur in professional boxing due to the lack 
of responsible self-regulation on a national basis. The 
Committee concurs with most credible members of the boxing 
industry that problems stemming from the activities of major 
promoters and sanctioning organizations cannot be adequately 
addressed on a state-by-state basis. The Committee emphasizes 
the vulnerability and lack of leverage most professional boxers 
have with respect to various arbitrary business practices of 
these entities in the sport. This legislation compliments the 
Professional Boxing Safety Act, the federal law enacted in 1996 
which established a series of vital health, safety, and ethical 
standards in the professional boxing industry.

                          Legislative History

  The Committee held two full Committee hearings in 1998 on the 
professional boxing industry. On March 24, 1998, a hearing was 
held on business practices in the professional boxing industry. 
Frederic G. Levin, attorney and negotiator for Roy Jones, Jr., 
light heavyweight champion, testified that long term 
promotional contracts and options hurt the boxer and the sport, 
and that ratings organizations do not have credible ratings 
procedures. Mr. Levin recommended that all options and 
promotional rights gained from a boxer seeking to compete in a 
particular fight be prohibited. Jones submitted written 
testimony recommending that promotional contracts should be 
limited and that boxers and state commissions be advised of how 
the revenues of a boxing event were distributed. Jones 
recommended that ``options'' should be made illegal. Mr. James 
J. Binns, Counsel to the World Boxing Association, testified 
that the current ratings system does not function improperly, 
and having several different champions in each weight division 
increases opportunities for boxers. Promoter Cedric Kushner 
testified that long term promotional contracts are necessary 
for promoters to recoup their investment in a boxer. Mr. Greg 
Sirb, Executive Director of the Pennsylvania State Athletic 
Commission and president of the Association of Boxing 
Commissions (ABC), testified that the proliferation of 
sanctioning organizations is undermining the title of 
``champion.'' Attorney Patrick C. English, who has represented 
promoters and boxers in the sport, testified that sanctioning 
organizations have inconsistent procedures, and stated that 
state regulations do not adequately regulate promoter 
contracts. Mr. English recommended that option clauses be 
prohibited in certain contractual situations and that promoters 
should be barred from requiring that a boxer hire a specific 
manager. He also stated that certain rules of sanctioning 
organizations could be antitrust violations.
  On July 23, 1998, the Committee held a hearing on S. 2238, as 
introduced by Chairman McCain and Senator Bryan. Mr. Shelly 
Finkel, a manager of several world champions, submitted 
testimony stating that the bill would help end the exploitation 
of boxers. Boxer Mike Tyson submitted a statement alleging that 
he had over $65 million taken from him in less than 24 months, 
and that his promoter took 30% of all his purse earnings. Tyson 
stated that S. 2238 would be a valuable protection for 
generations of fighters to come. Commissioner Larry Hazzard of 
New Jersey testified that S. 2238 would help the New Jersey 
State Board of Athletic Control protect boxers from coercive 
and unfair business practices. Dr. James Nave and Marc Ratner 
of the Nevada State Athletic Commission testified that it is 
difficult for state commissions to individually monitor 
promoter--boxer contracts, and that a federal mechanism should 
be put in place to prevent hidden agreements. The Nevada 
officials testified that expenses charged to the boxer by the 
promoter should be reported, and that option clauses 
controlling aboxer for his entire career should be outlawed. 
Dr. Nave and Mr. Ratner also testified that sanctioning organizations 
should comply with public disclosure regulations on the federal level. 
Trainer Eddie Futch testified that S. 2238 is a necessary and positive 
reform for professional boxing. Mr. Walter Stone, Counsel to the 
International Boxing Federation, testified that S. 2238 was flawed 
because it did not address the role of television and cable networks in 
the boxing industry. Mr. Jose Sulaiman, president of the World Boxing 
Council, pledged the WBC's full support for the legislation in his 
testimony. Mr. Sulaiman's prepared statement said that the bill's 
requirement to provide notice to boxers on why their ratings had been 
changed would be impractical.
  On October 1, 1998, the Committee met in open executive 
session to consider S. 2238 and by voice vote ordered the bill 
reported with an amendment in the nature of a substitute.

                      Summary of Major Provisions

  As reported, S. 2238 would require boxer-promoter contracts 
to contain specific terms regarding number of bouts and 
duration; would limit certain promotional rights gained from a 
boxer to 1 year; would prohibit conflicts of interest between 
managers and promoters; and would prohibit promoters from 
requiring boxers to hire an individual as their manager. The 
bill would require sanctioning organizations to establish 
objective ratings criteria; to create a written appeals 
process; to notify boxers of the reason for their rating having 
changed; and to disclose their bylaws publicly. S. 2238 would 
require promoters to file complete contracts with state 
athletic commissions, and notify the commissions of all charges 
and costs they impose on a boxer, and all payments made to 
sanctioning organizations. It would also amend the federal 
boxing safety law to require state commissions to honor 
suspensions pertaining to boxer misconduct that are imposed by 
other state commissions.

                            Estimated Costs

  In the opinion of the Committee, it is necessary under 
paragraph 11(a)(3) of Rule XXVI of the Standing Rules of the 
Senate to dispense with the requirements of paragraphs 11(a)(1) 
and (2) of the Rule and section 403 of the Congressional Budget 
Act of 1974 in order to expedite the business of the Senate.

                      Regulatory Impact Statement

                       Number of Persons Covered

  Several thousand boxers in the U.S. would benefit from the 
contract and other business practice reforms contained in S. 
2238. Numerous promoters in the U.S. would be affected by the 
contract and related reforms established by S. 2238. The 
numbers of officials and employees of sanctioning organizations 
who would be affected by S. 2238 is likely under thirty.

                            Economic Impact

  The expected economic impact of S. 2238 is minimal. The 
reforms proposed by the legislation should increase competition 
in the industry, due to a reduction in anti-competitive 
restraints of trade. There would be increased free market 
bidding by promoters seeking to sign boxers, which will benefit 
boxers, as will a more consistent and systematic ratings 
system. The Committee believes the reforms contained in S. 2238 
will help encourage an increase in the prominent bouts that are 
major draws for fans, and thus will increase revenues and 
public interest in the sport.

                                Privacy

  S. 2238 will require sanctioning officials to make public 
rosters of their officials who vote on the ratings of boxers. 
Promoters are required to file complete versions of their 
contracts with boxers, due to the problem of boxers being 
exploited by hidden agreements.

                               Paperwork

  The amount of paperwork required to meet the public interest 
disclosure requirements is small. On an annual basis, 
sanctioning organizations engaged in interstate commerce are 
required by the bill to submit their bylaws and related 
information to the Federal Trade Commission, or place this 
information on a Internet website. Sanctioning organizations 
will be required to provide notice when changing the rating of 
certain boxers, which can be done on a single sheet of paper. 
Most sanctioning organizations already have extensive 
adjudicatory appeals procedures in place, so the written 
appeals procedure required by S. 2238 is minor. The 
requirements on major promoters to protect boxers from 
exploitative practices can largely be complied with in several 
sheets of paper, as well. The Committee has exempted promoters 
of boxing events of fewer than 10 rounds from certain 
disclosure requirements to alleviate administrative burdens on 
promoters of ``club'' boxing shows.

                      Section by Section Analysis

Section 1. Short title

  Section 1 designates the short title of the bill as the 
``Muhammad Ali Boxing Reform Act.''

Section 2. Findings

  Section 2 provides a series of findings which describe the 
problems that exist with respect to arbitrary and anti-
competitive business conduct in the professional boxing 
industry on an interstate basis.

Section 3. Purposes

  Section 3 lists the purposes of the bill, which are to 
protect professional boxers against certain exploitative and 
unethical business practices; assist State boxing officials in 
their oversight of the boxing industry; and increase 
competition within the boxing industry.

Section 4. Protecting Boxers From Exploitation

  Section 4 amends the existing federal boxing law, the 
Professional Boxing Safety Act, by adding a new section 15 
aimed at protecting boxers from exploitation.
  New section 15 seeks to curb several of the most restrictive, 
onerous, and anti-competitive contracting practices which 
promoters in the sport have imposed on professional boxers. It 
requires all contracts between a boxer and a promoter to 
include mutual obligations between the parties, and specify a 
number of bouts for the boxer, and the duration in time of the 
contract. Requiring a mutuality of obligation attempts to 
prevent promoters from securing promotional rights or portions 
of a boxer's purse, without providing any compensation or 
consideration to the boxer. Specifying a minimum number of 
bouts for the boxer protects a boxer from having the boxer's 
career stalled or damaged by a promoter who refuses to provide 
the agreed-to number of bouts. Requiring the promoter to 
stipulate the specific period of time for the contract's length 
is an important protection for boxers. Promoters in the 
industry have utilized a contract with vague and unspecified 
terms on its length to control a boxer for virtually the 
boxer's entire productive career.
  Historically, promoters in the industry have required an 
exclusive long term promotional contract with a boxing 
challenger as a condition precedent to permitting a bout 
against another boxer that the promoter has under contract. The 
Committee believes, and hearing witnesses and industry members 
concur, that this tactic is the key contracting practice that 
has been used by promoters to gain undue control over boxers 
and championship titles, to the clear detriment of the sport. 
Promoters have used this practice to extract ``exclusive 
promotional options'' from boxers who already have a promoter, 
and who would not otherwise enter into a longtime contract with 
a new promoter. The athletes would be better served if they 
were free to contract with those promoters they personally 
choose, rather than being coerced to contract with a promoter 
who is in the position of barring a lucrative bout.
  This practice also has enabled a single promoter to gain 
control over a majority of championship bouts in a weight 
division because it results in one promoter having control over 
both the champion and the challenger. No matter which boxer 
wins a title bout, the promoter remains in effective control 
over who may compete for that title, since he has both 
contestants under contract. If a boxer who seeks to challenge a 
champion (or more established boxer) refuses to provide long 
term contractual rights to the promoter, the boxer is simply 
denied the right to compete in the bout. This practice 
frustrates the years of determined training and punishing 
competition of boxers, for they are barred by the promoter from 
the opportunities that their successes in the ring have earned.
  This practice of coercing options from boxers is also 
utilized by promoters and sanctioning organizations against 
``mandatory challengers''--those boxers who are rated by a 
sanctioning organization as the top contender in a weight 
division. The top-rated contender is supposed to be assured of 
having a bout against the champion of that division, within a 
specific period of time. Despite the fact that top-rated 
challengers have clearly earned the right to compete for a 
title, sanctioning organizations have abetted restrictive 
contracting practices by allowing promoters of championship 
bouts to require options from them. As one hearing witness 
noted, this is akin to requiring a professional tennis player 
or golfer to sign an exclusive, long term contract with the 
promoter of whatever event-title they were seeking. The athlete 
would then only be able to compete when the promoter approved, 
against only those opponents who also were forced to agree to 
terms with that promoter. In well organized major sports such 
as tennis and golf such a business practice would be strongly 
challenged and criticized as an unreasonable restraint of 
trade. In professional boxing, it is business as usual.
  The Committee believes that sensible, pro-competitive 
limitations on these onerous practices by promoters are 
warranted. New section 15 would put a time limit of one year on 
all promotional rights that a promoter secures from a boxer (or 
another promoter) as a prerequisite to the boxer participating 
in a particular bout. This situation will generally involve a 
boxer being selected as an opponent/challenger by a promoter 
for a boxer who is already under contract to the promoter. The 
most common example of this is a boxer who seeks to compete 
against a famous world champion. Currently, the champion's 
promoter may require a challenger to contract for exclusive 
promotional rights for an extended term of years or fights, or 
be rejected from the bout. The Committee believes that no boxer 
should be forced to contract for long term control of the 
boxer's career against the boxer's will. In situations where a 
boxer is a mandatory challenger, the bill would prohibit 
promoters from securing promotional options from the boxer (or 
the boxer's promoter). The Committee feels that the contracting 
requirements and limitations contained in new section 15 will 
protect the freedom to contract of boxers, increase competition 
in the sport to the benefit of fans, and reduce improper 
restraints of trade.
  It is important to note that the duration of basic boxer-
promoter contracts are not limited by the bill. The Committee 
does not seek to limit contracts reached as a result of 
legitimate arms length bargaining between an unattached boxer 
and promoter. The one-year limitation applies only to those 
situations where a promoter secures promotional rights from a 
boxer (or another promoter), as a condition for that boxer to 
compete in a particular bout. The one-year limitation is not 
intended to apply to a contract where a promoter and boxer 
consensually enter into a long term contract, with the first 
bout for the boxer being specifically named, and in which the 
opponent is not under contract to the promoter. The Committee 
notes that after the one year limitation expires, the boxer is 
free to then contract with whatever promoter the boxer chooses, 
including the promoter in question. However, the one year 
limitation will at least provide the boxer with the ability to 
seek the highest bidder for his or her services after one year, 
or simply choose the promoter the boxer determines will best 
further the interest of the boxer's career.
  The Committee also notes that many States have boxing 
regulations which wholly proscribe any exclusive contractual 
arrangement between a promoter and a boxer, and declare them to 
be unenforceable under state law. These include some of the 
most prominent boxing states in the U.S., yet these contractual 
protections forboxers are rarely, if ever, enforced. This is at 
least partially due to the fact that if one State begins to impose more 
stringent regulations on promoters, promoters will simply take the 
boxing event--and the accompanying substantial commercial activity and 
tax revenues it generates--to a less regulated jurisdiction. The 
Committee feels that this amplifies the need for limited federal 
reforms to curb coercive and restrictive business abuses in the boxing 
industry.
  This section also prohibits a promoter from forcing a boxer 
to hire an individual, such as a relative or business 
associate, as the boxer's manager or in a similar capacity. 
Testimony presented to the Committee described the practice 
wherein a boxer is coerced to hire a relative of a promoter as 
the boxer's manager, which results in the boxer having to pay a 
third of all earnings in the ring to an individual associated 
with the promoter. Coupled with the above described practice of 
forcing boxers into long term business relationships under the 
threat of being denied competitive opportunities, skimming off 
a third of their earnings via an unwanted manager is an 
especially egregious practice.
  The final protection for boxers established in this section 
is the prohibition of conflicts of interests between promoters 
and managers. Most boxers have limited educational backgrounds 
and, as the top promoters in the sport readily concede, are no 
match for experienced promoters during contractual discussions. 
While the role of managers has been diminished in the sport 
over the last decade, it remains essential that managers serve 
and protect the interest of the boxer. They should not be 
serving the financial interests of the promoter, while 
simultaneously taking a 33% earnings cut from the boxer for 
biased representation as manager. The Committee received 
testimony about instances where boxers had suffered significant 
career and economic injury due to their manager's clear 
conflicting interests. A manager must be a determined advocate 
for the boxer's interests, and not be influenced by financial 
inducements from a promoter. This provision tracks a similar 
regulation of many State boxing commissions.

Section 5. Sanctioning organization integrity reforms

  This section amends the Professional Boxing Safety Act by 
adding a new section 16 pertaining to sanctioning 
organizations.
  The rating of a boxer has a substantial effect on a boxer's 
career trajectory. The ratings system in professional boxing 
today is universally criticized as arbitrary and manipulative 
by boxers, managers, state officials, and sports journalists. 
The ratings of professional boxers have more to do with 
business interests of sanctioning officials and promoters than 
with the skills and achievements of boxers. A representative 
practice is the fact that sanctioning organizations refuse to 
rate the ``champions'' of their competitor organizations. This 
can lead to the dismaying result that a boxer may be considered 
the world's unquestioned best by his fellow boxers, industry 
members, fans, and the media--yet the boxer may not even be 
rated in the top 20 of many of the organizations who profess 
skill in rating fighters. The world of sport contains no 
ratings system of athletes or sports teams that has as little 
credibility and fan confidence as that operating in 
professional boxing.
  The major motivation for the dubious practices of sanctioning 
organizations is financial. Sanctioning organization officials 
may receive lucrative fees, tickets, airfare, and hotel stays 
for sanctioning an event. As long as ``their champion'' 
continues to win and draw ticket buying fans at the gate and on 
cable television, they have a reliable revenue producer. If 
they objectively rated all boxers according to their true 
skills, however, the champions in each weight division would 
often change due to vigorous competition. While this would be 
good for fans and those boxers striving for a chance to compete 
for a title, it would not be in the financial interest of the 
ratings organizations. They might lose exclusive control over a 
champion and thus be forced to reduce their fees, or they might 
see their revenues dwindle as championships in each weight 
division are unified. Of course, the public would gain greatly 
by getting the major bouts they long to see, and the sport's 
integrity would soar as true ``champions'' emerged in all 
weight divisions. Again, these admirable results are not in the 
financial interest of the sanctioning organizations.
  Most importantly for the Committee's considerations, the 
manipulation of the ratings system has significant detrimental 
effects on the career paths of boxers. Unlike other major 
sports industries in the U.S., professional boxers do not have 
an assurance that continued success in their competitions will 
guarantee them a chance to vie for a championship. They must 
instead often submit to contractual agreements with promoters 
and sanctioning officials that rob them of short or long term 
control of their careers, in return for a favorable rating 
position. The Committee received testimony and information 
about the arbitrary and irregular activities of sanctioning 
organizations in the industry.
  New section 16 would require sanctioning organizations that 
are engaged in interstate commerce in the U.S. to establish 
objective and consistent written criteria for their ratings of 
boxers. This new section requires these organizations to 
develop criteria for rating boxers that can be evaluated and 
monitored by members of the industry. Sanctioning organizations 
would be required to establish an appeals process to afford 
boxers a chance to contest the ratings, in writing, to the 
sanctioning organization. The written response of the 
organization would be sent to the boxer, the state boxing 
commission of the boxer's domiciliary, and the President of the 
Association of Boxing Commissions (ABC). The ABC is the 
voluntary national association of state athletic boxing 
commissioners in the U.S. They develop policies to improve 
health, safety, honest competition, and ethical conduct in the 
boxing industry. Members of the ABC are prohibited by federal 
law from having any ties to the business side of the boxing 
industry. State boxing commissioners serve a unique role in the 
sport by their regulation of boxing events on behalf of the 
public interest.
  New section 16 requires sanctioning organizations to notify 
boxers of their reasons for changing their ratings, and 
publicly release their explanation. Since the often arbitrary 
ratings system has a large impact on the career of a boxer, the 
Committee believes this is an important measure to have these 
organizations fairly explain why they have changed the boxer's 
rating. The requirement only applies to those boxers who are 
rated in an organization's top 10. The explanation must be 
mailed to the boxer and the ABC, and posted on the 
organization's Internet site, if they have one. It ishoped that 
public disclosure of their ratings determinations will encourage these 
organizations to make more legitimate ratings decisions.
  Sanctioning organizations conduct interstate business in the 
U.S. with virtually no standards or ethical guidelines by 
industry members, few state guidelines, and no federal 
oversight. The Committee believes that increased public 
disclosure is an essential part of reform of the professional 
boxing industry. New section 16 establishes an annual public 
disclosure mechanism for sanctioning bodies to disclose basic 
aspects of their operations. Each sanctioning organization is 
required to provide their bylaws, voting membership, and 
appeals procedures on an annual basis to the Federal Trade 
Commission. If the organization has an Internet website, this 
information can be provided on the website.
  New section 16 also seeks to prohibit conflicts of interest 
between sanctioning organization officials and promoters. As 
noted above, the rating of boxers should be made according to 
the successes of the boxer in the ring, not according to 
financial inducements from a promoter or other interested 
party. Allegations of payments being made to gain a favorable 
rating for a boxer have frequently occurred for over a decade. 
This section would prohibit payments or other forms of 
compensation from promoters and others to sanctioning 
organizations, other than the customary fee and expenses the 
organization is due to receive for sanctioning boxing event.

Section 6. Public interest disclosures to State Boxing Commissions

  This section amends the Professional Boxing Safety Act by 
adding a new section 17.
  This section is designed to provide enhanced information to 
State boxing commissions about the fees that sanctioning 
organizations impose on boxers and promoters, and other revenue 
sources of these organizations. A sanctioning organization must 
advise the State commission of all revenues and benefits it 
receives pertaining to a boxing event. Increased information is 
also required of promoters. The Committee received testimony 
about how promoters may significantly reduce what they pay to a 
boxer (below what is reported to the relevant commission) by 
claiming a portion of the boxer's purse, and assessing 
excessive expenses and charges. This practice can be easily 
achieved by the promoter signing the boxer to a series of 
contracts, which can result in reduction of the boxer's 
earnings below that permissible under State law. For example, 
Nevada regulations require that a boxer receive at least two-
thirds of his purse from the promoter. However, the 
commission's only information about how much a boxer is to 
receive is generally a one-page form contract which promoters 
file for each event. Commissions have no information or 
documentation to determine if the promoter is subsequently 
taking significant portions of the boxer's purse. Therefore, 
the bill requires a promoter to provide a commission with 
copies of any contracts with a boxer, and to verify that there 
are no other agreements. The promoter is required to provide a 
statement to the commission detailing all costs and expenses 
the promoter will impose on the boxer, and what portions of the 
boxer's purse the promoter may be taking. Promoters are also 
required to report what payments and benefits they provide to 
sanctioning organizations for each boxing event. If requested, 
the promoter must also provide this information to a State 
Attorney General's Office.

Section 7. Enforcement

  The enforcement of the Professional Boxing Safety Act of 1996 
includes criminal and civil sanctions. A person knowingly 
violating the Act is subject to up to one year in prison, or 
substantial fines. Section 7 of S. 2238 provides for the 
stiffest fine when the provisions of new section 15, 16, or 17, 
relating to exploitation of a boxer, are violated. It is 
important that monetary penalties are a sufficient deterrent to 
promoters who may be engaged in exploitation and coercive 
practices. In an industry where a single championship bout 
between prominent boxers can achieve revenues easily exceeding 
$60 million in the U.S. alone, fines for illegal practices 
under the Act must be commensurate. Therefore, the Act provides 
that fines can exceed $100,000 for any boxing events that 
exceed $2 million in revenues. The Committee recognizes and 
supports the fact that State commissions are the primary 
regulators and enforcement entities in the professional boxing 
industry. Section 7 of the reported bill therefore authorizes 
State Attorneys General to bring injunctive, criminal, and 
civil actions on behalf of their residents. Boxers who 
themselves suffer economic injury from violations of the Act 
are also authorized by section 7 to bring civil actions.

Section 8. Professional Boxing Safety Act amendments

  This section contains additional amendments to the 
Professional Boxing Safety Act. It requires State commissions 
in the U.S. to honor the suspensions of boxers for 
unsportsmanlike conduct that were ordered by other state 
commissions. The amendment also requires license revocations to 
be treated similarly as a suspensions for the purposes of the 
federal law.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                 Professional Boxing Safety Act of 1996

SEC. 2. DEFINITIONS.

                            [15 U.S.C. 6301]

  For purposes of this Act:
          (1) Boxer.--The term ``boxer'' means an individual 
        who fights in a professional boxing match.
          (2) Boxing commission.--(A) The term ``boxing 
        commission'' means an entity authorized under State law 
        to regulate professional boxing matches.
          (3) Boxer registry.--The term ``boxer registry'' 
        means any entity certified by the Association of Boxing 
        Commissions for the purposes of maintaining records and 
        identification of boxers.
          (4) Licensee.--The term ``licensee'' means an 
        individual who serves as a trainer, second, or cut man 
        for a boxer.
          (5) Manager.--The term ``manager'' means a person who 
        receives compensation for service as an agent or 
        representative of a boxer.
          (6) Matchmaker.--The term ``matchmaker'' means a 
        person that proposes, selects, and arranges the boxers 
        to participate in a professional boxing match.
          (7) Physician.--The term ``physician'' means a doctor 
        of medicine legally authorized to practice medicine by 
        the State in which the physician performs such function 
        or action.
          (8) Professional boxing match.--The term 
        ``professional boxing match'' means a boxing contest 
        held in the United States between individuals for 
        financial compensation. Such term does not include a 
        boxing contest that is regulated by an amateur sports 
        organization.
          (9) Promoter.--The term ``promoter'' means the person 
        primarily responsible for organizing, promoting, and 
        producing a professional boxing match.
          (10) State.--The term ``State'' means each of the 50 
        States, Puerto Rico, the District of Columbia, and any 
        territory or possession of the United States.
          (11) Sanctioning organization.--The term 
        ``sanctioning organization'' means an organization that 
        sanctions professional boxing matches in the United 
        States--
                  (A) between boxers who are residents of 
                different States; or
                  (B) that are advertised, otherwise promoted, 
                or broadcast (including closed circuit 
                television) in interstate commerce.
          (12) Suspension.--The term ``suspension'' includes 
        within its meaning the revocation of a boxing license.

           *       *       *       *       *       *       *


SEC. 7. REVIEW.

                            [15 U.S.C. 6306]

  (a) Procedures.--Each boxing commission shall establish each 
of the following procedures:
          (1) Procedures to evaluate the professional records 
        and physician's certification of each boxer 
        participating in a professional boxing match in the 
        State, and to deny authorization for a boxer to fight 
        where appropriate.
          (2) Procedures to ensure that, except as provided in 
        subsection (b), no boxer is permitted to box while 
        under suspension from any boxing commission due to--
                  (A) a recent knockout or series of 
                consecutive losses;
                  (B) an injury, requirement for a medical 
                procedure, or physician denial certification;
                  (C) failure of a drug test; [or]
                  (D) the use of false aliases, or falsifying, 
                or attempting to falsify, official 
                identification cards or [documents.] documents; 
                or
                  (E) unsportsmanlike conduct or other 
                inappropriate behavior inconsistent with 
                generally accepted methods of competition in a 
                professional boxing match.
          (3) Procedures to review a suspension where appealed 
        by a boxer, including an opportunity for a boxer to 
        present contradictory evidence.
          (4) Procedures to revoke a suspension where a boxer--
                   (A) was suspended under subparagraph (A) or 
                (B) of paragraph (2) of this subsection, and 
                has furnished further proof of a sufficiently 
                improved medical or physical condition; or
                   (B) furnishes proof under subparagraph (C) 
                or (D) of paragraph (2) that a suspension was 
                not, or is no longer, merited by the facts.
  (b) Suspension in Another State.--A boxing commission may 
allow a boxer who is under suspension in any State to 
participate in a professional boxing match--
          (1) for any reason other than those listed in 
        subsection (a) if such commission notifies in writing 
        and consults with the designated official of the 
        suspending State's boxing commission prior to the grant 
        of approval for such individual to participate in that 
        professional boxing match; or
          (2) if the boxer appeals to the Association of Boxing 
        Commissions, and the Association of Boxing Commissions 
        determines that the suspension of such boxer was 
        without sufficient grounds, for an improper purpose, or 
        not related to the health and safety of the boxer or 
        the purposes of this Act.

           *       *       *       *       *       *       *


SEC. 9. CONFLICTS OF INTEREST.

                            [15 U.S.C. 6308]

  (a) Regulatory Personnel._No member or employee of a boxing 
commission, no person who administers or enforces State boxing 
laws, and no member of the Association of Boxing Commissions 
may belong to, contract with, or receive any compensation from, 
any person who sanctions, arranges, or promotes professional 
boxing matches or who otherwise has a financial interest in an 
active boxer currently registered with a boxer registry. For 
purposes of this section, the term ``compensation'' does not 
include funds held in escrow for payment to another person in 
connection with a professional boxing match. The prohibition 
set forth in this section shall not apply to any contract 
entered into, or any reasonable compensation received, by a 
boxing commission to supervise a professional boxing match in 
another State as described in section 4.
  (b) Firewall Between Promoters and Managers.--
          (1) In general.--It is unlawful for--
                  (A) a promoter to have a direct or indirect 
                financial interest in the management of a 
                boxer; or
                  (B) a manager--
                          (i) to have a direct or indirect 
                        financial interest in the promotion of 
                        a boxer; or
                          (ii) to be employed by or receive 
                        compensation or other benefits from a 
                        promoter,
                except for amounts received as consideration 
                under the manager's contract with the boxer.
          (2) Exception for self-promotion and management.--
        Paragraph (1) does not prohibit a boxer from acting as 
        his own promoter or manager.
  (c) Sanctioning Organizations.--
          (1) Prohibition on receipts.--Except as provided in 
        paragraph (2), no officer or employee of a sanctioning 
        organization may receive any compensation, gift, or 
        benefit directly or indirectly from a promoter, boxer, 
        or manager.
          (2) Exceptions.--Paragraph (1) does not apply to--
                  (A) the receipt of payment by a promoter, 
                boxer, or manager of a sanctioning 
                organization's published fee for sanctioning a 
                professional boxing match or reasonable 
                expenses in connection therewith if the payment 
                is reported to the responsible boxing 
                commission under section 17; or
                  (B) the receipt of a gift or benefit of de 
                minimis value.

SEC. 10. ENFORCEMENT

                            [15 U.S.C. 6309]

  (a) Injunctions.--Whenever the Attorney General of the United 
States has reasonable cause to believe that a person is engaged 
in a violation of this Act, the Attorney General may bring a 
civil action in the appropriate district court of the United 
States requesting such relief, including a permanent or 
temporary injunction, restraining order, or other order, 
against the person, as the Attorney General determines to be 
necessary to restrain the person from continuing to engage in, 
sanction, promote, or otherwise participate in a professional 
boxing match in violation of this Act.
  (b) Criminal penalties.--
          (1) Managers, promoters, matchmakers, and 
        licensees.--Any manager, promoter, matchmaker, and 
        licensee who knowingly violates, or coerces or causes 
        any other person to violate, any provision of this 
        [Act] Act, other than section 9(b), 15, 16, or 17, 
        shall, upon conviction, be imprisoned for not more than 
        1 year or fined not more than $20,000, or both.
          (2) Violation of anti-exploitation, sanctioning 
        organization, or disclosure provisions.--Any person who 
        knowingly violates any provision of section 9(b), 15, 
        16, or 17 of this Act shall, upon conviction, be 
        imprisoned for not more than 1 year or fined not more 
        than--
                  (A) $100,000; and
                  (B) if the violations occur in connection 
                with a professional boxing match the gross 
                revenues for which exceed $2,000,000, such 
                additional amount as the court finds 
                appropriate,
        or both.
          [(2)] (3) Conflict of interest.--Any member or 
        employee of a boxing commission, any person who 
        administers or enforces State boxing laws, and any 
        member of the Association of Boxing Commissions who 
        knowingly violates section 9 of this Act shall, upon 
        conviction, be imprisoned for not more than 1 year or 
        fined not more than $20,000, or both.
          [(3)] (4) Boxers.--Any boxer who knowingly violates 
        any provision of this Act shall, upon conviction, be 
        fined not more than $1,000.
  (c) Actions by States.--Whenever the chief law enforcement 
officer of any State has reason to believe that a person or 
organization is engaging in practices which violate any 
requirement of this Act, the State, as parens patriae, may 
bring a civil action on behalf of its residents in an 
appropriate district court of the United States--
          (1) to enjoin the holding of any professional boxing 
        match which the practice involves;
          (2) to enforce compliance with this Act;
          (3) to obtain the fines provided under subsection (b) 
        or appropriate restitution; or
          (4) to obtain such other relief as the court may deem 
        appropriate.
  (d) Private Right of Action.--Any boxer who suffers economic 
injury as a result of a violation of any provision of this Act 
may bring an action in the appropriate Federal or State court 
and recover the damages suffered, court costs, and reasonable 
attorneys fees and expenses.

           *       *       *       *       *       *       *


SEC. 15. PROTECTION FROM EXPLOITATION.

  (a) Contract Requirements.--
          (1) In general.--Any contract between a boxer and a 
        promoter or manager shall--
                  (A) include mutual obligations between the 
                parties;
                  (B) specify a minimum number of professional 
                boxing matches per year for the boxer; and
                  (C) set forth a specific period of time 
                during which the contract will be in effect, 
                including any provision for extension of that 
                period due to the boxer's temporary inability 
                to compete because of an injury or other cause.
          (2) 1-year limit on coercive promotional rights.--
                  (A) The period of time for which promotional 
                rights to promote a boxer may be granted under 
                a contract between the boxer and a promoter, or 
                between promoters with respect to a boxer, may 
                not be greater than 12 months in length if the 
                boxer is required to grant such rights, or a 
                boxer's promoter is required to grant such 
                rights with respect to a boxer, as a condition 
                precedent to the boxer's participation in a 
                professional boxing match against another boxer 
                who is under contract to the promoter.
                  (B) A promoter exercising promotional rights 
                with respect to such boxer during the 12-month 
                period beginning on the day after the last day 
                of the promotional right period described in 
                subparagraph (A) may not secure exclusive 
                promotional rights from the boxer's opponents 
                as a condition of participating in a 
                professional boxing match against the boxer, 
                and any contract to the contrary--
                          (i) shall be considered to be in 
                        restraint of trade and contrary to 
                        public policy; and
                          (ii) unenforceable.
                  (C) Nothing in this paragraph shall be 
                construed as pre-empting any State law 
                concerning interference with contracts.
          (3) Promotional rights under mandatory bout 
        contracts.--Neither a promoter nor a sanctioning 
        organization may require a boxer, in a contract arising 
        from a professional boxing match that is a mandatory 
        bout under the rules of the sanctioning organization, 
        to grant promotional rights to any promoter for a 
        future professional boxing match.
  (b) Employment As Condition of Promoting, Etc.--No person who 
is a licensee, manager, matchmaker, or promoter may require a 
boxer to employ, retain, or provide compensation to any 
individual or business enterprise (whether operating in 
corporate form or not) recommended or designated by that person 
as a condition of--
          (1) such person's working with the boxer as a 
        licensee, manager, matchmaker, or promoter;
          (2) such person's arranging for the boxer to 
        participate in a professional boxing match; or
          (3) such boxer's participation in a professional 
        boxing match.
  (c) Enforcement.--
          (1) Promotion agreement.--A provision in a contract 
        between a promoter and a boxer, or between promoters 
        with respect to a boxer, that violates subsection (a) 
        is contrary to public policy and unenforceable at law.
          (2) Employment agreement.--In any action brought 
        against a boxer to recover money (whether as damages or 
        as money owed) for acting as a licensee, manager, 
        matchmaker, or promoter for the boxer, the court, 
        arbitrator, or administrative body before which the 
        action is brought may deny recovery in whole or in part 
        under the contract as contrary to public policy if the 
        employment, retention, or compensation that is the 
        subject of the action was obtained in violation of 
        subsection (b).

SEC. 16. SANCTIONING ORGANIZATIONS.

  (a) Objective Criteria.--A sanctioning organization that 
sanctions professional boxing matches on an interstate basis 
shall establish objective and consistent written criteria for 
the ratings of professional boxers.
  (b) Appeals Process.--A sanctioning organization shall 
establish and publish an appeals procedure that affords a boxer 
rated by that organization a reasonable opportunity, without 
the payment of any fee, to submit information to contest its 
rating of the boxer. Under the procedure, the sanctioning 
organization shall, within 14 days after receiving a request 
from a boxer questioning that organization's rating of the 
boxer--
          (1) provide to the boxer a written explanation of the 
        organization's criteria, its rating of the boxer, and 
        the rationale or basis for its rating (including an 
        response to any specific questions submitted by the 
        boxer); and
          (2) submit a copy of its explanation to the President 
        of the Association of Boxing Commissions of the United 
        States and to the boxing commission of the boxer's 
        domiciliary State.
  (c) Notification of Change in Rating.--If a sanctioning 
organization changes its rating of a boxer who is included, 
before the change, in the top 10 boxers rated by that 
organization, then, within 14 days after changing the boxer's 
rating, the organization shall--
          (1) mail notice of the change and a written 
        explanation of the reasons for its change in that 
        boxer's rating to the boxer at the boxer's last known 
        address;
          (2) post a copy, within the 14-day period, of the 
        notice and the explanation on its Internet website or 
        homepage, if any, for a period of not less than 30 
        days; and
          (3) mail a copy of the notice and the explanation to 
        the President of the Association of Boxing Commissions.
  (d) Public Disclosure.--
          (1) FTC filing.--Not later than January 31st of each 
        year, a sanctioning organization shall submit to the 
        Federal Trade Commission--
                  (A) a complete description of the 
                organization's ratings criteria, policies, and 
                general sanctioning fee schedule;
                  (B) the bylaws of the organization;
                  (C) the appeals procedure of the 
                organization; and
                  (D) a list and business address of the 
                organization's officials who vote on the 
                ratings of boxers.
          (2) Format; Updates.--A sanctioning organization 
        shall--
                  (A) provide the information required under 
                paragraph (1) in writing, and, for any document 
                greater than 2 pages in length, also in 
                electronic form; and
                  (B) promptly notify the Federal Trade 
                Commission of any material change in the 
                information submitted.
          (3) FTC to make information available to public.--The 
        Federal Trade Commission shall make information 
        received under this subsection available to the public. 
        The Commission may assess sanctioning organizations a 
        fee to offset the costs it incurs in processing the 
        information and making it available to the public.
          (4) Internet alternative.--In lieu of submitting the 
        information required by paragraph (1) to the Federal 
        Trade Commission, a sanctioning organization may 
        provide the information to the public by maintaining a 
        website on the Internet that--
                  (A) is readily accessible by the general 
                public using generally available search engines 
                and does not require a password or payment of a 
                fee for full access to all the information;
                  (B) contains all the information required to 
                be submitted to the Federal Trade Commission by 
                paragraph (1) in a easy to search and use 
                format; and
                  (C) is updated whenever there is a material 
                change in the information.''.

SEC. 17. REQUIRED DISCLOSURES TO STATE BOXING COMMISSIONS.

  (a) Sanctioning Organizations.--Before sanctioning a 
professional boxing match in a State, a sanctioning 
organization shall provide to the boxing commission of, or 
responsible for sanctioning matches in, that State a written 
statement of--
          (1) all charges, fees, and costs the organization 
        will assess any boxer participating in that match;
          (2) all payments, benefits, complimentary benefits, 
        and fees the organization will receive for its 
        affiliation with the event, from the promoter, host of 
        the event, and all other sources; and
          (3) such additional information as the commission may 
        require.
  (b) Promoters.--Before a professional boxing match organized, 
promoted, or produced by a promoter is held in a State, the 
promoter shall provide a statement in writing to the boxing 
commission of, or responsible for sanctioning matches in, that 
State--
          (1) a copy of any agreement in writing to which the 
        promoter is a party with any boxer participating in the 
        match;
          (2) a statement made under penalty of perjury that 
        there are no other agreements, written or oral, between 
        the promoter and the boxer with respect to that match; 
        and
          (3) a statement in writing of--
                  (A) all fees, charges, and expenses that will 
                be assessed by or through the promoter on the 
                boxer pertaining to the event, including any 
                portion of the boxer's purse that the promoter 
                will receive, and training expenses; and
                  (B) all payments, gift, or benefits the 
                promoter is providing to any sanctioning 
                organization affiliated with the event.
  (c) Information To Be Available to State Attorney General.--A 
promoter shall make information received under this section 
available to the chief law enforcement officer of the State in 
which the match is to be held upon request.
  (d) Exception.--The requirements of this section do not apply 
in connection with a professional boxing match scheduled to 
last less than 10 rounds.

SEC. [15.] 18. EFFECTIVE DATE.

                         [15 U.S.C. 6301 note]

  The provisions of this Act shall take effect on January 1, 
1997, except as follows:
          (1) Section 9 shall not apply to an otherwise 
        authorized boxing commission in the Commonwealth of 
        Virginia until July 1, 1998.
          (2) Sections 5 through 9 shall take effect on July 1, 
        1997.

                                
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