Composer Billy Steinberg stated:

When Madonna recorded it, even as our demo faded out, on the fade you could hear Tom [Kelly, the song’s co-writer] saying, ‘When your heart beats, and you hold me, and you love me…’ That was the last thing you heard as our demo faded. Madonna must have listened to it very, very carefully because her record ends with the exact same little ad-libs that our demo did. That rarely happens that someone studies your demo so carefully that they use all that stuff. We were sort of flattered how carefully she followed our demo on that

Ostensibly, the narrator is one of the “good ones,” that is, one of the small number of blacks fit for inclusion in white society. He is singled out for his articulate graduation speech, and invited to address an assembly of powerful whites in the town. But when he arrives, he discovers that he’s viewed as just another nigger; though he has been brought there for his gifts as an orator, he is casually enlisted in a boxing match too, on the assumption that all blacks are atavistic savages who thrive on bloodsport.

The battle royal that follows was seen by Ellison not just as sheer cruelty:

Understood as the equivalent in a deritualized age of a “rite,” Ellison argues, the “Battle Royal” corresponds to a type of practical joke known as a Fool’s Errand, and such jokes fulfill the function, in a progressively deritualized society, of jolting the naive out of their naivety. They insult in the way that strengthens.

See more about the “fool’s errand” here.