Battle between UFC and Oklahoma on PPV revenue leads to statewide ban on MMA

Ultimate Fighting Championship's (UFC) battle to bring mixed martial arts (MMA) to the state of New York has been longstanding and widely publicized.

Earlier this week (March 14, 2012) another state added its name to the list of territories unfriendly to the UFC in particular and combat sports in general.

That state is Oklahoma, a place that the promotion has ventured previously on two past occasions -- UFC Fight Night 16 (Sept. 16, 2009) and UFC 4 (Dec. 16, 1994). According to the Houston Pro Wrestling Examiner, there may be an impasse, unless the two sides are able to see eye-to-eye on some important things.

Namely: Money.

Oklahoma's Executive Director of the Athletic Commission, Joe Miller, recently issued the following statement to combat sports promoters in Oklahoma:

"The purpose of this letter is to inform you the Oklahoma State Athletic Commission will not be accepting applications for event permits for events scheduled after March 31, 2012. The Commission is faced with an out-of-state threat that, if successful, could greatly affect the Commission's ability to provide for the public safety and for the health and safety of the athletes for future events throughout the state of Oklahoma. The Commission is currently trying to address legal and legislative efforts which have given us serious concerns about how we move forward with adequate oversight of Oklahoma's boxing, mixed martial arts, and professional wrestling events. As you know, the primary focus of this agency is to make sure the athlete's health, and safety is not compromised. We take this charge very seriously. The Commission and I will be working diligently to address these issues and develop a plan of action to return to a normal course of business."

More on the story after the jump:

The crux of the issue seems to come down to a tax that the state of Oklahoma has imposed and collected on UFC pay-per-views (PPV) that were purchased in that state. The 4 percent tax has been levied on all PPVs, even on events held outside Oklahoma.

It's a move that has drawn the ire of UFC President Dana White, to the extent that Zuffa has announced plans to sue the Commission to have the tax removed.

According to Miller, the tax is necessary to help pay for the Commission's expenses:

"It takes approximately $360K for the Commission to provide regulation for the approximately 275 events per year we regulate. The Oklahoma State Athletic Commission does not receive any state funding. We are funded solely from license fees, assessment on live events, and an assessment on pay-per-view events. We receive approximately $137K per year through license fees and assessments on live events. Receipts from Pay-per-view are approximately $240K per year. About $80K per year comes from UFC PPV. The UFC has threatened a law suit against our PPV law unless our legislature repeals our PPV law during this legislative session. The Commission loses either way. OK has been collecting on PPV since 2004 and this is the first time the issue has been brought to light. For the Oklahoma Commission to survive and for Combat Sports to continue in Oklahoma it will be up to the Oklahoma legislature to come up with a solution to the funding shortfall. You can do the math."

Clearly, Oklahoma needs the UFC more than the UFC needs Oklahoma, but this case could set a precedent that causes negative ripples in the future.

It's safe to assume that the $2 billion MMA enterprise is not hard up for cash, much less an $80,000 "fee" to sell events to fans who live in the "Sooner State" each year. However, if more cash-strapped states jump on the bandwagon looking for similar handouts, the 50-state total could get quite ugly.

Unless, of course, you think that's just the cost of doing combat sports business.