According to a January 19th letter prepared by Nick Khan (one of Pacquiao's current co-managers) and submitted to the Nevada State Athletic Commission, Pacquiao was guaranteed a minimum purse of $2,000,000 for the Morales rematch. Subsequent to the fight, after deductions, Pacquiao received $313,446. That's not as bad as it sounds, but the question remains: "Where did the rest of the $2,000,000 go?"
Pursuant to the managerial contract, Shelly Finkel is entitled to receive twelve percent of Pacquiao's gross purse from the Morales rematch. That means, in addition to his percentage of future income from the fight, he was entitled to $240,000 out of the $2,000,000 minimum purse. Finkel deferred $40,000 of this amount in the form of a loan to Pacquiao and received the remaining $200,000.
Nick Khan is entitled to receive 4.64 percent of Pacquiao's gross purse from the Morales rematch. That means, in addition to his percentage of future income from the fight, he was entitled to $92,800 out of the $2,000,000 minimum purse. Khan deferred $11,600 of this amount in the form of a loan to Pacquiao and received the remaining $81,200.
Keith Davidson is entitled to receive 3.36 percent of Pacquiao's gross purse from the Morales rematch. That means, in addition to his percentage of future income from the fight, he was entitled to $67,200 out of the $2,000,000 minimum purse. Davidson deferred $8,400 of this amount in the form of a loan to Pacquiao and received the remaining $58,800.
Freddie Roach (Pacquiao's trainer), is entitled to ten percent of Pacquiao's gross purse from the Pacquiao-Morales rematch. That means, in addition to his percentage of future income from the fight, he was entitled to $200,000 out of the $2,000,000 advance. Roach deferred $40,000 of this amount in the form of a loan to Pacquiao and received the remaining $160,000.
Other deductions included $376,666 in payments to the Internal Revenue Service on behalf of Pacquiao for present and back taxes; a $200,000 advance from Top Rank (believed to have gone to Pacquiao); $80,350 to Top Rank for Pacquiao-Morales fight tickets requested by Pacquiao; $75,000 to assistant trainer Restituto Fernandez; $50,000 to translator and camp aide Joe Ramos; $4,708 to Shelly Finkel for airplane tickets for Pacquiao's wife and one of Pacquiao's friends; $2,000 to the WBC as a sanctioning fee (the fee was relatively low because the fight was for a regional title); and $25,000 that was withheld by the Nevada State Athletic Commission pending the result of Pacquiao's post-fight drug test.
There were also $372,839 in deductions paid to Gary Shaw Productions (Pacquiao's promoter). Top Rank (Bob Arum's promotional company) was the lead promoter for the fight and did the bulk of the promotional work. Shaw was brought in by Pacquiao's management team to look after Pacquiao's interests.
In addition to performing his promotional duties, Shaw developed a great fondness for Pacquiao. It troubled Gary that, when Pacquiao fought Erik Morales the first time, Murad Muhammad had enjoyed a luxurious suite while the fighter was consigned to lesser quarters. Thus, for Morales-Pacquiao II, Shaw arranged for Manny to be lodged in a luxurious two-bedroom suite with a wet bar, plasma TVs, and other amenities. Shaw says that escorting Pacquiao to his suite was a great moment. "It made me feel good," said Gary, "just to see Manny's reaction." He had a smile like a kid at his first Christmas."
Deductions paid to Shaw included $3,200 for tickets to the rematch between Diego Corrales and Jose Luis Castillo requested by Pacquiao; $52,000 in additional advances (believed to have been paid to the fighter); and $67,639 for a Porsche purchased on behalf of Pacquiao.
In addition, Gary Shaw Productions received a flat fee of $250,000 for its services as Pacquiao's promoter with regard to the Morales rematch. This fee was negotiated by Shaw with Shelly Finkel and Nick Khan. The terms of Shaw's promotional agreement were explained to Pacquiao in Tagalog, and Pacquiao signed the agreement. It appears from the aforementioned January 19th letter prepared by Khan that the $250,000 promotional fee was charged in its entirety to Pacquiao. This conclusion is based on the fact that the portions of the $2,000,000 minimum purse listed as being due to Finkel, Khan, Davidson, and Roach are calculated as percentages of the entire minimum purse; not the minimum purse less Shaw's $250,000 promotional fee. Also, in a January 27th letter, Bruce Zabarauskas (counsel for Finkel) states that Finkel, Khan, Davidson, and Roach are entitled to their percentages based on Pacquiao's "gross purse." If Finkel, Khan, Davidson, and Roach had shared in the cost of Shaw's promotional fee, Pacquiao would, without other adjustments, have received an additional $75,000.