Nearly a decade after filing a federal antitrust lawsuit against the Ultimate Fighting Championship, more than 1,000 former and current professional mixed martial artists should begin receiving payments from a pool of $260m starting next June.
Federal judge Richard F Boulware granted preliminary approval of a negotiated settlement between the two parties on Tuesday. Once final, the $375m agreement would end the proceedings in Le, et al v Zuffa LLC, one of two classes Boulware certified last year that cover UFC fighters from the end of 2010 through the present day. The other, Johnson, et al v Zuffa LLC, represents the interests of fighters beginning in July 2017, and is ongoing.
The fighters’ co-lead class counsel, who are expected to receive close to a third of the Le settlement in fees and expenses pending Boulware’s approval, will have a chance to collect more than a hefty sum in Johnson since hard questions about the UFC’s contract and business model are on the table.
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After purchasing the struggling company for $2m from its original owners, Semaphore Entertainment Group, the Fertitta-owned Zuffa LLC, spearheaded by president and CEO Dana White, began knocking down doors and building its business. Fifteen years later, the Fertittas sold the UFC to sports and entertainment giant Endeavor in a $4.2bn deal. Under the publicly traded TKO Group Holdings, the UFC lives alongside the WWE and is valued at more than $12bn.
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On the way to becoming a politically and culturally important business, the UFC proudly outlasted numerous would-be rivals, often absorbing their assets in the process, namely valuable fighter contracts. Many UFC stars from the past 20 years joined the company as a result of the misfortune of another promoter.
This consolidation gave Zuffa tremendous leverage over the MMA labor market. For most people watching the sport, the one way a fighter could be perceived as a “world champion” is to hold a UFC belt, meaning only fighters who signed a promotional contract with White’s company were eligible.
The original civil suit was filed in 2014, by former UFC fighters Cung Le, Nathan Quarry, Jon Fitch, Brandon Vera, Javier Vazquez, and Kyle Kingsbury. According to the plaintiffs, Zuffa schemed to lock fighters into restrictive long-term contracts while capping the revenue paid to the athletes, effectively suppressing wages.
Fighters represented in the lawsuit – 1,952, all told – allege that Zuffa pulled this off by eliminating options on the buyer side, absorbing and shuttering the competition, while paying no more than 20% of UFC revenue to the athletes – a significantly lower wage share than those found in major US-based professional sports (in the NFL, for example, players receive around half of league revenue).
Combining restrictive contracts and business tactics that limited fighters’ mobility in the marketplace (technically, they are independent contractors but are exclusively bound to the UFC), the labor side amounted to an industry dominated by a single buyer, making the UFC a “monopsony” in violation of Section 2 of the Sherman Antitrust Act.
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In his 80-page order granting the fighters’ class status in 2023, Boulware wrote the plaintiffs had established that they “suffered economic injury as a result of defendant’s anti-competitive conduct.”
Throughout the litigation process, during hearings, and in the language of the settlement document, lawyers for the UFC echoed White by disputing the notion that the company had done anything wrong. Nonetheless, Boulware denied a motion to dismiss the case and allowed it to survive summary judgment. Before the decade-long litigation battle was originally set for a jury trial in April 2024, a settlement agreement materialized through a mediator.
Maintaining that they are not liable for the claims and that they would have a good defense in front of a jury, attorneys for the UFC said it had agreed to settle, in part, to “avoid further expense, inconvenience, and the distraction of protracted litigation.”
The global settlement in July would have delivered $335m to fighters and resolved both the Le and Johnson lawsuits.
For the UFC, the tax-deductible settlement payments carried significantly less risk than a jury trial, where a guilty verdict in Le had the potential of $811m to $1.6bn in damages, which could have also then been trebled by the court.
But in mid-July, Judge Boulware balked and declined preliminary approval, saying he wanted to see “life-changing money.” He described the payout, split 90/10 between the two cases, as insufficient and declared that the interests between the two classes were actually in conflict.
Where Le became solely about damages, Johnson has the potential for injunctive relief, namely concrete changes to contracts and the UFC business model.
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A formula that factors a fighter’s competitive compensation plus $14,000 per bout determines the disbursement, which comes out to around 30% of what he or she made during the class period. Payments to fighters will vary. Thirty-five are in line to net over $1m. Five hundred will receive in excess of $100,000. Nearly 800 can expect more than $50,000.
Meanwhile, members of the Johnson class, including hundreds of fighters covered in the Le settlement, can still pursue additional damages and, crucially, injunctive relief as that case moves forward.