Canelo Alvarez’s Shrewd Decision Saves Jaime Munguia’s Biggest Fight Purse From a Significant Paycut

The sport of boxing like many of its contemporary sporting avenues is heavily concentrated in a few states. Ever wondered why? And it has nothing to do with big arenas. Well, it has something  to do with what is popularly known as ‘Jock Tax.’ This very jock tax will also help Jaime Mungia save major bucks in his upcoming fight against Canelo Alvarez. 

Tomorrow, at the T-Mobile Arena in Las Vegas, Nevada, the two Mexican super middleweights will clash in a sold-out matchup. For Canelo, he attempts to hold on to his rule as the undisputed champion of the division. Munguia undertakes the hardest, biggest, and most elite fight of his 43-undefeated career. For this iconic night, both the fighters are also slated to rake some major cheques home.

What is the Jock Tax and how would it impact Jaime Munguia?

33-year-old Canelo, a resident of Jalisco, Mexico has mostly fought his bouts in the state of Nevada, with a few exceptions of fights in Texas and his home country. This is not alien behavior to many fighters of his league. A potential reason for such a choice is that states generally levy a special income tax on visiting athletes for undertaking events in their jurisdiction. Such a tax is called the Jock Tax.

While almost all states in the US subscribe to this method of taxation, exceptions remain. Nevada, Texas, Florida, Washington, and Tennessee are the only states that do not levy this tax on visiting athletes. Hence, they also remain the hub for sporting events. So, if a California athlete plays a game in Texas, they might owe income tax to Texas for that day’s earnings.

Therefore, Canelo, who is bringing the fight under his own promotions this time, by choosing Las Vegas, Nevada as the venue has ultimately helped Munguia save some major money, he would have otherwise lost out to on tax. This is the reason why, despite open avenues, Canelo Alvarez always chooses a Las Vegas location over other states in the US. The Jock tax is also known as the Michael Jordon tax. Why?

In 1991, after winning the NBA championship with the Chicago Bulls, Michael Jordan faced a tax bill from California for the games he played there during the Finals. This angered his home state of Illinois. In response, Illinois passed a law taxing athletes from states that imposed a jock tax on Illinois athletes. This tit-for-tat move became known as “Michael Jordan’s Revenge.” While the jock tax existed before this event, the story of Michael Jordan and Illinois’ retaliation significantly raised awareness and became the reason for the nickname.

While it is not disclosed how much the 27-year-old fight is set to earn for his fight against Canelo, sources reveal that it is, in fact, his biggest pay gate to date. His last fight against John Ryder earned him about $800,000. However, for this fight, against a name like Canelo, the number is all set to enter the millions. While he will save up on the jock tax, he will, however, have to cough up the regular income tax that every athlete should anyways pay.

While Munguia is set to break his own record of payday, it is also interesting to see how much his opponent, the iconic Canelo Alvarez will earn.

Another big check for Saul Alvarez

Last year, the Mexican fighter stood tall as the highest-earning boxer of the year. In May, he defeated John Ryder, while also earning a splendid $15 million in purse with another additional $40 million in PPV sales.

When he defeated Jermell Charlo, a few months later, he earned another $15-20 million in purse and the rest, a total in PPV and merchandise sales amounting to $50 million. For his first matchup of this year, against Munguia, he is slated to earn $35 million in just purse bids. The amount he earns from PPV with bump these figures up further.

Do you think it was wise of Canelo Alvarez to pick Las Vegas as the fight venue? Let us know your thoughts in the comments section below.