Tennessee to continue regulating combat sports until June 30, 2016 pending new bill approval

Despite still being on life support, combat sports regulation in Tennessee will likely not die in 2015 as previously assumed, thanks to some creative strategic bill reshuffling done in the state's assembly last week.

As reported by several outlets last week, most notably the Nashville Sports Mix, the state-run Tennessee Athletic Commission was due to cease operations on July 1 due to the office’s financial instability. According to a commission financial report obtained by Cagewriter, between 2011 and 2013, the closest the commission came to breaking even was in 2012 when it ended the year with a negative balance of $22,476.00, not including the $54,602 outstanding from the previous year. Last year its total compound debt rose to $230,445.00.

A lack of large-scale events and the revenue they would provide meant that the department cannot even afford its commissioner's salary, let alone the operating costs of a properly run governing body. Official figures indicate the commission paid $12,214.00 in processing and administrative fees, which were back-charged by the department of Commerce and Insurance for administrative services and processing fees last year. It also forked out  $13,038.00 in travel expenses. Total commission revenue for 2014 was $47,850.

Because of its lack of financial viability, lawmakers had no choice but to terminate the commission as of July 1, 2014, under Tennessee's Governmental Entity Review law. Ironically though, the very legislation that many felt signaled the death of the commission featured a possible out clause that could provide a stay of execution for the struggling regulating body.

Paragraph c) of the law reads:

Any governmental entity that has been terminated under this section may be continued, reestablished or restructured in accordance with this chapter.

All departments that are to be terminated under the law are also given a one-year wind-down period so it can be determined who will take on any required essential service, role, or tasks previously handled by the office when it dissolves. In Tennessee politics this is also known as a "gasping for air period."

Rather than enact the wind-down or invoke the out clause, state assembly instead voted that year to pass a "sunset" bill to give the financially struggling governing body an official one-year reprieve to allow time to come up with a solution to the issue.

On Jan. 26, 2014, the sunset bill to extend the commission another year was enacted by Tennessee 108th General Assembly. Unfortunately though,  bill SB 1564 – HB 1586 didn’t clarify who would or could take over when the commission was disbanded, as this type of bill is typically reserved for obsolete departments or laws that are being discontinued.

This major and glaring problem with the bill went unnoticed, or was ignored, for a year. Unfortunately, because the new sunset bill superseded the entity review law, it no longer was governed by these rules, and no longer required the commission be given a “gasping for air period.” Instead it was given an expiry date and no direction how to proceed.

Without a commission and no law with specific language indicating combat sports were actually against the law in Tennessee, unsanctioned and unsafe events could have and likely would have been run in the state.

On Thursday State Sen. Mike Bell introduced sunset bill SB-0212, which still puts the end life of the athletic commission at June 30, but moves it back under Tennessee Governmental Entity Review law, thus re-enacting that all important clause from paragraph c). If approved, and it's likely it will be, the commission can either be restructured, or its life can be extended at any time during this period as long as the state senate moves to do so.

More importantly, it means the commission’s wind-down period will run from July 1, 2015 to June 30, 2016, buying some much-needed time for the involved parties to figure out a viable solution.

One option that could eliminate the taxpayer risk and cause very little changeover snafus would be to privatize the commission.

In essence, Tennessee could let all of its nine commission employees go one day, and hire them back the next as independent contractors to provide regulation for the state. This would save the state the cost of government salaries as commission members would be paid for work done – a simple pay-for-play model one such commission in Canada has thrived under.

The Central Combative Sports Commission was established and is run by three Alberta-based current and former Association of Boxing Commissions-recognized commissioners with a combined total of more than 60 years of combat sport regulation between them. Based out of Penhold, Alberta – a small town 81 miles north of Calgary with a population of less than 2400, the group was essentially “deputized” by the municipality to oversee the regulation of combat sports in Penhold. A unique clause in the regulation by-law also allows the commission to travel to and work in any jurisdiction that either does not have its own athletic commission, or has a commission with limited or no combat sport sanctioning experience.

The CCSC collects fees in-line with those levied by provincial and municipal commissions and approved by Penhold council, they hire officials who are already ABC-recognized and licensed, and despite being an independent government-contracted business, they actually assume very little risk. It’s up to the event promoter to acquire the proper permits like liquor and event licenses and insurance required by the jurisdiction they are holding an event in.

According to CCSC executive director Dale Kliparchuk, who previously helmed both the Edmonton and River Cree Athletic Commissions in Alberta and is now ringmaster of the Calgary Athletic Commission, the private model works well for all parties involved and could solve the problem in Tennessee.

“I definitely think a commission based on our model would eliminate the financial burden Tennessee is trying to wash its hands of. The number one priority of a combat sport-based athletic commission, no matter if it’s municipally, provincially, or privately run, is to safely and properly regulate the sports it oversees, not to try to make a profit,” Kliparchuk explains. “[The Central Combative Sports Commission doesn’t] take a dime from the taxpayer, and really that’s the way it should be. Why should they be on the hook for paying for regulating sports that not everyone likes or is a fan of? That should be the responsibility of the promoter. We bill back the promoter, who pays us out of his or her profits from things like gate receipts, sponsorship dollars, merchandise sales, and liquor sales. It’s simple and it works.”

Hopefully Tennessee state legislators can figure out a remedy that will simplify this unnecessarily complicated problem, or June 30, 2016, might be the last day for regulated combat sports in "The Volunteer State" for quite some time.