Boxing Wrestling Bond

Boxing Wrestling Bond

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What is a Boxing Wrestling Bond?

A boxing and wrestling bond is a type of surety bond that a boxing or wrestling promoter (aka a person who arranges a boxing or wrestling competition) is often required to have to operate legally. The boxing and wrestling bond bond guarantees that the promoter will pay the appropriate parties involved in the competition. 

A boxing wrestling bond can also be referred to as a promoter surety bond, mixed martial arts promoter surety bond, kickboxing promoter surety bond, combat spot surety bond, and sports promoter surety bond. Keep reading for more insight into what a boxing wrestling bond is, how this type of bond works, and what to know about pricing. 

Why do you need a Boxing Wrestling Bond?

If someone wants to promote boxing or wrestling events, they are often required to have a boxing promoter surety bond in order to become permitted. Essentially what this bond does is it guarantees that the promoter will remain compliant with any laws and regulations relating to their field and will pay all obligations that arise from their event. This can give athletes and venue owners security regarding promised payments. 

Certain jurisdictions require that boxing and wrestling promoters obtain additional surety bonds to operate, so it’s always a good idea to check with your local licensing office about what types of bonds you need in your area. For example, some jurisdictions require a tax bond that guarantees the promoter will pay all gross tax receipts they owe for a promoted event.

A boxing wrestling bond does not protect against athlete injuries occurring in the ring, they only protect against promoters who may not fulfill their contractual obligations and comply with rules and regulations as required by their state promoter’s license.

How Boxing Wrestling Bonds Work

There are always three parties involved in a surety bond, including a boxing wrestling bond:

SuretyThis is the company that issues and backs the boxing wrestling bond.

PrincipalThe party that must secure the boxing wrestling bond (aka the promoter) in order to become licensed is known as the principal. 

ObligeeThe party who requires the surety bond is the obligee and typically this is a state government or licensing agency. In the case of a boxing wrestling bond, this is often the state athletic commission. 

So—how do these parties interact? To start, the obligee sets a surety bond requirement. Then the principal purchases a surety bond from the principal. Let’s say a boxing or wrestling promoter purchases a surety bond and breaches their obligation or fails to comply with the appropriate rules and regulations, such as not paying an athlete after a match. The athlete would then be able to file a claim against the boxing and wrestling bond for financial compensation. The surety would then be responsible for investigating the claim. If the surety finds the claim to be valid, they would initially pay out the claim amount to the athlete. This doesn’t mean that the principal is free and clear here. The principal will owe that claim amount to the surety and may also owe additional fees and interest. 

Generally, surety bonds such as boxing and wrestling bonds levy the threat of financial punishment which encourages them to not stray from any rules, regulations, laws, or contractual obligations.

How Much Does Boxing Wrestling Bond Cost?

The cost of a boxing wrestling bond can vary greatly based on a few different factors. To understand how pricing works, it’s helpful to know what the following terms mean.

Bond termAKA—how long the boxing wrestling bond is active for.

Bond premiumThis term represents how much the principal needs to spend to buy the boxing wrestling bond.

Bonding capacityThe most a consumer can claim against an auctioneer bond is referred to as the bonding capacity. 

When it comes time to buy a boxing wrestling bond, the bond premium will be a certain percent of the bonding capacity. Usually these premiums are 1% to 3% of the bonding capacity. For example, if in your state the bonding capacity is $10,000 and you’re offered a rate of 2%, it will cost you $200 to secure your boxing wrestling bond. 

The percentage you will pay depends on a handful of factors, the primary factor being your personal credit score. The higher your personal credit score is, the lower your percentage will be. Other factors are also taken into consideration, but are less important, such as your years in business, the amount of industry experience you have, and what your business credit score is. Working to improve your credit score before you apply for a boxing wrestling bond or go to renew it at the end of the bond term can help you save money on your bond premium. 

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