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Turmoil grows at the NYSAC

05
Sep

On Oct. 29, 1975, with New York City on the verge of bankruptcy, President Gerald Ford announced that he opposed federal financial assistance to ease the city’s fiscal crisis. The following day, a banner headline on page one of the New York Daily News blared, “Ford to City: Drop Dead.”

On Aug. 31, 2016, the New York State Athletic Commission told small boxing promoters in New York to drop dead.

The commission’s monthly meeting (which was open to the public) began at 11:16 a.m. and lasted for 11 minutes. All three commissioners (Ndidi Massay, Edwin Torres and John Signorile) were in attendance, as were Anthony Giardina (the newly appointed interim executive director), Eric Bentley (demoted earlier in the week from the position of acting executive director to director of boxing) and Kim Sumbler (who was formally installed in the newly-created position of MMA project coordinator).

The meeting was a dog-and-pony show. The commissioners had already decided what to do behind closed doors. A motion was made to adopt a set of proposed rules and regulations governing combat sports in New York that had been posted in July on the NYSAC website. Despite strong opposition from the boxing community and clear indications that the rules and regulations will undermine the ability of boxing promoters to do business in New York, the motion passed by a 3-to-0 vote. On Sept. 1, the rules and regulations became law.

The seeds of boxing’s latest dilemma can be found in an April 14, 2016, press release issued by the office of New York Governor Andrew Cuomo headlined “Governor Cuomo Signs Legislation Legalizing Mixed Martial Arts in New York State.” The headline could just as easily have read “Governor Cuomo Signs Legislation that Threatens to Destroy a Class of Small Businesses in New York.”

The new law requires all promoters of boxing matches and other martial arts competitions to provide medical insurance or another form of financial guarantee acceptable to the NYSAC with a minimum coverage of $1 million. This million dollars would be used to cover medical, surgical and hospital care for the treatment of life-threatening brain injuries in situations where an identifiable causal link exists between the fighter’s participation in a fight and the life-threatening brain injury.

For all other fight-related medical costs, a $50,000 insurance policy is required.

The $1 million insurance requirement is not practical. The cost of the premiums – currently estimated to be well in excess of $10,000, more than double current premiums – will make it impossible to promote most fight cards on a cost-efficient basis in New York. David Berlin (then executive director of the NYSAC) warned legislators and Department of State officials of the problem as far back as June 2015 when the proposal was first discussed. Multiple promoters and others in the boxing industry voiced similar concerns when the law was enacted in April of this year and again when the NYSAC posted its proposed rules and regulations in July.

An Aug. 27, 2016, letter from Joe DeGuardia and Lou DiBella (two leading New York promoters) to the Department of State (which oversees the NYSAC) warned, “All boxing in the state of New York – marquee events and club shows alike – are under an immediate danger of extinction.”

The DeGuardia-DiBella letter then elaborated, “To date, we are not aware of any insurance carrier approved to provide $1 million in insurance coverage for life-threatening traumatic brain insurance in New York and, to the extent there is such a carrier, we believe the cost may be higher than the amount currently projected by the NYSAC. Even if the cost of the coverage is consistent with the amount projected by the NYSAC, it will increase the cost to promoters in New York – both MMA and boxing – and will make promoting smaller shows cost-prohibitive.”

The political powers that be in New York have sought to justify the million-dollar insurance requirement on grounds that it’s designed to protect the health and safety of fighters.

But the insurance requirement isn’t about protecting fighters. A state athletic commission protects fighters by refusing to license fighters who shouldn’t be allowed to fight. A state athletic commission protects fighters by instituting proper medical procedures and protocols and hiring competent doctors to implement them. A state athletic commission protects fighters by hiring referees who know when to stop a fight and inspectors who recognize signs of trouble.

The million-dollar insurance requirement has nothing to do with that. It’s about who pays for a fighter’s medical care after the system has failed to safeguard the fighter. The fighter’s family? The hospital where the fighter is treated? The state? That’s a legitimate issue. But let’s be honest about the fact that the million-dollar-insurance requirement will undermine every small promoter in New York and clears the way for UFC to be the only promoter of any professional combat sport competition in New York in the immediate future.

Let’s also acknowledge that, while the proposed insurance requirements will make boxing cost-prohibitive for small promoters, the requisite policy coverage has more holes in it than a piece of Swiss cheese.

For example, the rules and regulations approved by the NYSAC on Aug. 31 state that, even in cases of “acute brain injury,” the policy need only apply in the event that the condition would, in the opinion of a fighter’s treating physician, “result in the death of the [fighter] if left untreated.”

In other words, the prospect of a fighter being paralyzed and unable to speak for life because of an acute brain injury wouldn’t necessarily be covered. Nor, because of timing limitations contained in the rules and regulations, would a “slow” brain bleed that doesn’t manifest itself within 24 hours.

Moreover, as the Aug. 27 DeGuardia-DiBella letter warns, “The proposed insurance requirement undermines the very purpose of the statute that brought about its existence. The primary reason MMA was legalized in New York (which led to the proposed regulations and the increased minimum insurance requirements) was the projected economic activity that legal MMA would bring to New York. However, the anticipated additional insurance requirements will make it cost prohibitive for boxing promoters to do business in New York, thereby decreasing economic activity in New York.”

That prophesy is now coming true.

UFC was sold recently for $4 billion. UFC’s new owners can afford to self-insure or pay high insurance premiums. Bellator (another MMA promoter) is a subsidiary of Viacom and is expected to get insurance under a Viacom umbrella policy. UFC fight cards are currently scheduled for Madison Square Garden on Nov. 12 and the Times Union Center in Albany on Dec. 9.

Boxing promoters have been left out in the cold. To date, no insurance carrier has been willing to underwrite a million-dollar medical insurance policy for boxing, let alone a million-dollar policy that makes economic sense for a small show.

There are no boxing matches presently scheduled in New York for September, October or November of this year.

“Brooklyn’s own” Danny Jacobs will be fighting in Pennsylvania on Sept. 9. DiBella Entertainment had been holding Sept. 24 for a fight card at Barclays Center headlined by Danny Garcia. That’s now off and DiBella has moved his “Broadway Boxing” series to Foxwoods Resort Casino in Mashantucket, Conn., for the foreseeable future.

And it’s not just boxing people who will lose money. It’s also hotels and restaurants near New York fight venues, their service staff and kitchen workers. It’s the ticket-takers and other “little people” who work on site. And don’t forget the taxes that are generated when there’s a big fight in New York.

What does the NYSAC’s handling of the insurance issue say about the commission? NYSAC personnel were aware of this problem long before the legislation passed. Yet except for David Berlin, there’s no record of anyone at the NYSAC (including commissioners John Signorile and Edwin Torres) voicing concern. Then, when the legislation passed in April of this year, the commission failed to make realistic plans that could be put in place on Sept. 1 (either finding an insurance carrier that would underwrite the policies for an affordable premium or taking steps to lower the insurance minimum).

The commission fiddled while boxing in New York burned.

“They don’t know what the f— they’re doing,” DiBella says. “It’s a total mess.”

An Aug. 5, 2016, email sent to all deputy commissioners and inspectors by Eric Bentley (who served briefly and ably as acting executive director under difficult circumstances) supports DiBella’s point. This email, sent in the wake of the July 30 Leo Santa Cruz vs. Carl Frampton card at Barclays Center in Brooklyn, read in part, “There are some instances that occurred this past weekend that are very concerning and will need to be addressed immediately. Hopefully, by sending this written communication to all, we can help prevent future mistakes and continually improve our operations.”

Among other things, the email declared (partly in solid capital letters and bold type), “NEVER LEAVE A FIGHTER ALONE FOR ANY REASON AFTER A PRE-FIGHT URINE HAS BEEN COLLECTED. This is one of the most basic and important rules to follow.”

That was followed by another declaration in solid capital letters and bold type: “NEVER TELL A BOXER OR CORNER THAT YOU ARE NEW OR YOU DON’T KNOW THE RULES. In any situation where you may be confused or where clarification is necessary, you should always remain calm and collected, and simply explain to the fighter and their corner that you need to discuss the matter with a supervisor.”

There was more.

“Everyone needs to understand the proper way to wrap a hand, as well as any incorrect methods that a corner may try to sneak past you. We only allow 6 inches of tape on the hand before wrapping; not on the wrists, not on the elbows, not on the fingers, not on the forearms.  We also do not allow the knuckle pads to be rolled on the knuckles. They are to remain flat (if necessary, they can be folded in half).”

Bentley further admonished, “As an inspector, if you notice something that you think is being done incorrectly by another inspector, ask your colleague to step to the side and have a private conversation to discuss your concerns. You may be wrong, so to call a matter to the attention of a fighter or their camp (or even the opponent and their camp) is completely unprofessional and is equivalent to shouting ‘FIRE!’ in a crowded room.”

Problems like this arise when inspectors are poorly trained and assigned to fights on the basis of political priorities and personal favoritism rather than competence.

Meanwhile, the NYSAC is currently engaged in a round of personnel changes that resembles a game of musical chairs.

As previously noted, the Department of State oversees the commission. For several years, the person primarily responsible for this oversight was Executive Deputy Secretary of State Anthony Giardina, an attorney who worked for former New York Governor Mario Cuomo (Andrew’s father) earlier in his career and has been with the Department of State since 2012.

In February of this year, Deputy Secretary of State Charles Fields assumed Giardina’s oversight role with regard to the NYSAC. When Fields addressed the commission staff for the first time, he told them that he knew nothing about boxing but was a big fan of Mike Tyson.

By and large, Fields sided with Tom Hoover in the chairman’s ongoing conflict with David Berlin. In May 2016, Berlin was dismissed and Eric Bentley became acting executive director. Two months after that, Hoover resigned under fire after the Inspector General’s office concluded that he’d abused his position for personal gain. Ndidi Massay was named interim chairperson after Hoover’s departure.

Then, on Aug. 31, it was announced that Fields had been stripped of his responsibilities vis-à-vis the NYSAC and that Giardina had resigned as executive deputy secretary of state to become the NYSAC’s interim executive director (a step down on the organizational chart). Eric Bentley was relegated to his old role as director of boxing, and Kim Sumbler was formally installed as MMA project coordinator.

Other personnel changes included the departure of longtime athletic activities assistant Ana Rivas, who, on Aug. 22, sent an email to dozens of commission personnel, promoters and others advising them that she would leave the NYSAC on Sept. 9.

More significantly, Dr. Nitin Sethi (a respected neurologist and ring physician) has been asked whether he would be willing to replace Dr. Barry Jordan as the commission’s chief medical officer, which is a part time position. Sethi is open to the idea but intends to spend a considerable amount of time in the near future in India, where he was born and educated.

Dr. Angela Gagliardi has been hired as assistant chief medical officer and will focus for the time being on MMA.

Giardina is the point person in all of this. He’s a trusted, politically savvy Cuomo loyalist with good administrative skills who has been brought in to manage a commission in crisis. The assumption is that his tenure as interim executive director will be relatively brief and that he’ll be rewarded for his service with a more attractive position in the not-too-distant future.

The commission has also interviewed a half dozen candidates for newly-created deputy commissioner slots. Some of the candidates are qualified. Others are basing their hope of appointment on political priorities rather than competence.

That same balancing of competence and politics will be part of the decision-making process when Governor Cuomo fills four of the NYSAC’s five commissioner seats during the next few months.

The statute that legalized professional mixed martial arts competition in New York also expanded the NYSAC from three to five commissioners. That’s two open positions to begin with. Additionally, Edwin Torres and John Signorile (each of whom was criticized in the July 2016 Inspector General’s report for “a lack of appropriate engagement and oversight” following the Inspector General’s investigation into the tragedy of Magomed Abdusalamov) are serving as holdover commissioners on expired terms. Ndidi Massay’s term runs until 2019.

Political observers – not just the boxing community – should watch very closely to see who Governor Cuomo appoints to the commission. This isn’t just a combat sports issue. It’s a good government issue.

Several boxing insiders who’ve met Massay (the recently-appointed interim chairperson) say that they like her and she acknowledges knowing next to nothing about the sport and business of boxing. Let’s assume that Massay is a smart, conscientious, well-intentioned attorney and businesswoman. The fact remains that state athletic commission commissioners (and particularly the chairperson) should have a working knowledge of the sport they regulate.

Would Governor Cuomo appoint a bright, capable attorney with no experience in politics to run his reelection campaign? Obviously not. Why not? Because as bright and capable as that person might be, he or she wouldn’t have the requisite experience to run a political campaign. And Andrew Cuomo’s reelection campaign matters to Andrew Cuomo.

Meanwhile, events at the NYSAC are taking place against the backdrop of two investigations by federal law enforcement authorities.

One of these investigations is centered in the United States Attorney’s Office for the Southern District of New York and, among other things, is exploring whether the Cuomo administration improperly influenced the Inspector General of the State of New York in conjunction with its inquiry into the life-changing injuries suffered by Magomed Abdusalamov. The other investigation is being conducted by the Public Integrity Section of United States Attorney’s Office for the Eastern District of New York and is believed to be focusing on wrongdoing by NYSAC officials.

These investigations began separately but some information gathering is now being coordinated by the FBI. One potential witness who was interviewed in August says he was asked about the process by which the legislation legalizing mixed martial arts and instituting the million-dollar insurance requirement was enacted and whether there might have been an intention to favor UFC to the detriment of boxing.

That’s not to say that the answer is yes; only that questions are being asked.

Governor Cuomo signed the legislation on April 14 in a ceremony at Madison Square Garden. UFC Chairman and CEO Lorenzo Fertitta was there for the signing.

Under the law and subsequently adopted NYSAC rules and regulations, many of the guidelines applicable to the oversight of combat sports apply only to boxing. In that regard, the Aug. 27 letter from Joe DeGuardia and Lou DiBella to the Department of State declares, “The proposed regulations dealing with contract oversight contain an unexplained anomaly. Provisions that should apply equally to boxing and MMA have arbitrarily only been written to apply to boxing.”

The DeGuardia-DiBella letter then elaborates, “[The proposed regulations] contain essentially the same rule that has been in effect for some time in New York. Contracts between boxers and promoters are limited to an initial duration of three years. We recognize that this is the regulatory framework within which we currently promote. However, we take issue with the fact that [this provision] only applies to the promoter-boxer contractual relationship and does not apply to contracts entered into between MMA promoters and fighters. The exclusion of MMA from the proposed regulations is arbitrary and unfairly singles out boxing. This same disparity exists in [the] required disclosure for boxing promoters. This regulation sets forth the numerous disclosures a boxing promoter must make to the NYSAC. Again, while these disclosures would be applicable in the context of MMA as well, the regulations only govern boxing promoters. MMA should not be exempt from regulations that are designed in theory to avoid exploitation of fighters in New York.”

“We do not believe the disparities pointed out in this section are a case of mere oversight,” the DeGuardia-DiBella letter states in closing. “Both sports are under the authority of the NYSAC, and it makes no sense that only certain provisions of the law apply to MMA. Such cherry-picking is unfair to boxing and arbitrary.”

One might add that the million-dollar insurance requirement is specifically aimed at acute brain damage, which is less likely to occur in mixed martial arts competition than in boxing. Spinal cord injuries are more common in MMA and the long term cost of treating a spinal cord injury is often greater than the cost of treating a brain injury. But the recently enacted New York law makes no special provision for spinal cord injuries.

All of this leads to the question: Why have the political power brokers in New York done this? The insurance debacle wasn’t just predictable. It was predicted and should have been dealt with months ago.

As noted above, UFC was sold recently for a reported $4 billion. That’s $4,000,000,000. Numbers like this engender a feeding frenzy where politicians seeking campaign contributions and other amenities are concerned.

On Sept. 1, one day after the NYSAC adopted the new rules and regulations, the Wall Street Journal reported that UFC executives acknowledge having spent $2.2 million over the past eight years on lobbying efforts leading to passage of the new law. That total doesn’t include campaign contributions that might have been made directly to Governor Cuomo or state legislators.

Right now, Governor Cuomo and the NYSAC are helping one big business (UFC) and hurting a lot of little ones.

Earlier this summer, NYSAC officials told several promoters that the commission had arranged for the requisite million-dollar insurance policy to be made available to promoters for a premium of roughly $7,500. That struck Pat English, the attorney for Main Events, as unlikely. English wrote to the commission on Aug. 6 asking to see a sample policy. Three days later, he was advised that his letter was being treated as a request for information under New York’s Freedom of Information law.

That’s known as stalling for time.

“To have an inquiry of this nature treated as an Open Public Records Request is off-putting and not what I expected,” English responded in a letter to the Department of State. “It is important for promoters and their representatives to have an honest dialogue with the representatives of the commission. A routine inquiry should not be treated as an Open Public Records Request.”

NYSAC officials now concede that promises of a million-dollar medical insurance policy at an affordable premium were “premature.”

Meanwhile, at least one commission employee was told that personal cell phone records might be sought in an effort to find out who has been discussing NYSAC matters with the media without authorization from the secretary of state’s office.

Instead of trying to find out who’s talking about problems at the New York State Athletic Commission, the people in charge should put their energy into solving the problems.

The point person in the effort to rehabilitate the NYSAC will be Anthony Giardina. He appears to have been brought in both to transform the commission and also to represent Governor Cuomo’s interests as the federal investigations unfold.

One person who has worked with Giardina says, “He’s smart. He’s personable. He has good administrative skills. He’s politically savvy and knows how to operate within a political environment. I like him. But he has no real background in boxing so the question is whether he’ll surround himself with people who know boxing and do what’s right or implement a narrow political agenda.”

Giardina is aware that there are problems at the commission that go far beyond the million-dollar-medical-insurance controversy. Yes, he’ll watch Andrew Cuomo’s back. But he also has the governor’s ear. One hopes that he’ll press for the appointment of competent personnel in key positions, including the four open commissioner slots.

The NYSAC is broken. It can be fixed if Governor Cuomo is more interested in getting it to function properly than in using it as a vehicle for granting political favors and repaying political debts. It’s not hard to do the job right if conscientious, hard-working men and women who understand the sport and business of boxing are pressed into service at every level.

Political observers should watch the New York State Athletic Commission closely. Not because they care about combat sports; most of them don’t. But because it offers an easily understood case study on how Andrew Cuomo governs.

And by the way . . .

Two months after announcing that he opposed federal financial assistance for New York, Gerald Ford signed legislation that provided low-interest loans to the city.

New York survived. Boxing in New York will too.

Thomas Hauser can be reached by email at [email protected] His most recent book – A Hard World: An Inside Look at Another Year in Boxing – has just been published by the University of Arkansas Press. In 2004, the Boxing Writers Association of America honored Hauser with the Nat Fleischer Award for career excellence in boxing journalism. He is a consultant for HBO Sports.