Friday, September 18, 2009

Debts Will Force "Money" to Fight On

Floyd "Money" Mayweather, Jr. returns to the ring tomorrow night at the MGM Grand Garden Arena in Las Vegas.

The stakes have never been higher for Floyd Mayweather, Jr.

“Money” will make his return to a Las Vegas ring tomorrow night for the first time in nearly two years. Staring back at him from the opposite corner will be Mexico's Juan Manuel Marquez – a formidable foe if ever there was one.

But Mayweather is now fighting a much more ominous opponent.

Mired in debt, he has returned to the ring to not only stake his claim as the top pound-for-pound boxer on the planet, but to shake himself free of the shackles of a myriad of unpaid bills and profligate spending.

Backed to the ropes by the Internal Revenue Service, Mayweather owes numerous creditors for debts ranging from a $320.10 garbage removal bill to a defaulted auto loan. Tomorrow night, the IRS will help themselves to $5 million of his purse in order to help satisfy a $6.1 million tax obligation. Earlier this week it was revealed that Mayweather ceased making payments on a half-million dollar auto loan to JP Morgan Chase Bank. The Mercedes Maybach 57S was repossessed earlier this year and later sold at a loss. The bank is suing Mayweather for $167,000.

While Mayweather has won a fortune in ring earnings and amassed a pristine record of 39-0, 25KOs, Bob Arum, who promoted Mayweather's bouts from 1996 to 2006, has repeatedly claimed that the boxer never had the desire to face an opponent that had a real and legitimate chance of marring his undefeated record.

Arum claimed that Mayweather was more interested in engaging in a “businessman type fight” with Oscar De La Hoya rather than pursuing the absolute toughest opposition, as has been the modus operandi of the latest Arum promoted star, Manny Pacquiao.

At a press conference on Wednesday, Mayweather took a moment for himself.

There is some merit in Arum's criticism. While Mayweather has won titles in five weight divisions, he has often pursued the path of least resistance on his way to accumulating those title belts. For instance, rather than face the dangerous, all-action Antonio Margarito – Mayweather opted instead to meet Carlos Baldomir in a farce that was so boring many in the crowd booed the lack of action and exited the arena while the snore festival was in progress.

Whether Mayweather will ultimately be relegated to traversing the same incumbered IRS trail as Joe Louis and Mike Tyson remains to be seen. He is still young enough, at age 32, and has enough prime money-making years remaining to earn his way out of his current plight.

And that is welcome news for boxing fans.

It is welcome news because Mayweather will now be forced into pursuing the most significant fights with the biggest names in the sport. In boxing's harsh new economic climate, the best must now fight the best in order to be handsomely compensated. As a result, Mayweather will now be forced to match his skills with the very best in order to garner the gargantuan purses that can only come from getting into the ring with names such as Manny Pacquiao, Miguel Cotto, Shane Mosley and Antonio Margarito.

Furthermore, a frugal public will no longer pony up $50 for pay-per-view matches they deem to be non-competitive or for contrived events. The new economic realities of the world have trickled down to boxing as well, and a much more discerning boxing fan is not interested in paying for showcase fights or tune-ups.

Juan Manuel Marquez has pulled out all the stops in his pre-fight preparations and added bulk to his considerable skills.

For Mayweather then, the only way forward for him in order to keep pace with his debt obligations, his own hefty expenses and the fire breathing dragon some call the “Infernal” Revenue Service, is to take a risk with his undefeated record. Instead of the risk averse path of least resistance – Mayweather will now be forced onto the uncertain path of most resistance – and that's whether he wins or loses tomorrow night against Marquez.

Bruce Stern, a Chartered Professional Accountant who specializes in tax law and estate planning, estimates that a person with Mayweather's IRS obligations has a deep hole from which to dig themselves out of.

“Here's the thing with the IRS,” notes Stern, who has no knowledge of the specifics of Mayweather's plight. “Once a taxpayer gets behind in their obligation, it becomes very difficult to shake the IRS off their trail and it becomes difficult to reset the relationship. I read that Mayweather must surrender $5 million dollars of his purse for Saturday's fight which will pay roughly eighty percent of what he owes from prior years. However, even with that payment, he still owes $1.1 million. Plus, he will owe new federal and state taxes on his earnings from the Marquez fight.”

While dollar figures in the millions are routinely spoke about when it comes to the sport of boxing in general and Mayweather in specific, Stern notes that $6 million is a lot of money and a sum that the average citizen is unable to fully comprehend.

Mayweather pounds away on the speed bag at his gym in Las Vegas. He is a tireless worker and a perfectionist.

“Let me put it to you this way,” said Stern, in an effort to drive home the point as to the massive sum that Mayweather owes the IRS. “Take ten people and pay them a salary of fifty thousand dollars a year for twelve straight years – that's six million dollars. Better yet, take one guy and pay him a salary of a hundred grand a year. It would take him 60 years to earn six million bucks.”

Mayweather's paycheck for tomorrow night's bout with Marquez is purported to be in the neighborhood of $15 million. But that sum is not guaranteed and much of that will depend on the revenue from pay-per-view television.

Like former heavyweight champion Joe Louis, who could never manage to catch up on his debt to the IRS, Mayweather could find himself in a similar predicament.

Louis resumed and continued his career in an effort to become current on his past due taxes. However, each time Louis fought and was thus able to pay a portion of his delinquent tax bill, he would earn new income that was also taxable. In addition, interest and penalties were being heaped on with every passing day. It reached a ruinous point where Louis could never get ahead.

But the situation for Mayweather could likely be different. He is not at the end of his career, nor is he past his prime, as was Louis. Mayweather has a plethora of big-name opponents to choose from and what's more – that opposition is ready, willing and able to oblige him. In fact, they are calling Mayweather's name and are are practically jostling one another for the first place in line.

On Tuesday in Las Vegas, Mayweather posed with a gold lion in the lobby of the MGM Grand Hotel.

While Mayweather has alluded to his IRS issues, he has never delved into the specifics of his situation.

“Floyd Mayweather does not have a problem with the IRS,” said Leonard Ellerbe, the CEO of Mayweather's business interests. “When you have a problem with them, they don't have a problem finding you. They take you to jail then they come and take your stuff. He doesn't have a problem and he doesn't owe $6.1 million.”

When pressed for an answer, Mayweather glosses over any negatives associated with himself or his finances by saying, “I only like to focus on the positive and not the negative.”

Whatever the case, Mayweather seems to be enjoying himself and on the HBO program “Mayweather-Marquez 24/7” he looked into the camera while zipping around on a pair of roller skates in his newly constructed $10 million Las Vegas residence and said:

“We got the big boy mansion, we got Lambos, we got Rolls Royces, we got a lot of stuff, but guess what? The difference between me and everybody else – my shit is paid for, what about yours?”

While that may not be entirely true, what is certain is that Mayweather is going to have to continue to fight – against the biggest names – in order to maintain his current lifestyle and keep the IRS on the other side of the gates of his “big boy mansion.”

For boxing fans that have craved to see Mayweather in the ring with real threats – it's a long overdue bill that is about to be made good.

September 2009

No comments: