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I may not understand in depth the particulars of the fight game but there are a few things that I do know and understand and also some questions that need to be delved into.
1) How long will Alexio be the champion under your rules before his title is vacated as nobody has challenged him? 5 year? 10 years? Is he going to have to formally retire before the tile is vacated?
2) Champions fight and want to fight. From my limited knowledge, it does not seem like he wants to fight or he might already be fighting some of the big names today. He is not. Not only that but it seems like boxing DOES have the right idea having people be 'forced' as you put it into fighting every year. They shouldn't have to be forced if they are a true champion and most fighters fight at the very least 1-2x per year.
3) Boxing's organizations are indeed a joke but they don't allow the fighters to lay idle as champions for numerous years without ever fighting. A fighter who is a champion needs to fight...Bernard Hopkins fought for years making small purses before he finally made it with the Trinidad fight.
4) I never have liked Alexio personally from what I have seen of him but a) that doesn't mean if I knew him I would feel that way and b) nor do I deny that he was very talented and c) what I think about him really doesn't matter as it doesn't affect his skill level. I am not disputing that he was very talented.
5) Perhaps I am wrong but while I understand you don't wish to force anyone to pay sanctioning fees, shouldn't you FORCE the top rated contender and the champion to fight? I mean, if they can't agree on the purse, then shouldn't it go to a purse bid or is that too optomistic?
While I understand the intent of the IKF and feel it is trying to do side with the fighter and not income, I can't understand the logic of - NO ONE has made any formal challenge towards Dennis so he will remain champion until he is challenged and loses. What is that? You are the sanctioning body, why don't you mandate that he defends his title? I just don't believe that a champion can sit on his ass for 4 years and still keep his title. Is that right or wrong? In my eyes, money or not, sanctioning fees or not, he needs to defend his title.