Nearly a decade after an antitrust lawsuit was filed against the UFC (Ultimate Fighting Championship), more than 1,000 current and retired professional mixed martial arts (MMA) fighters will begin receiving payments starting in June 2024. The $260 million settlement was preliminarily approved by U.S. federal judge Richard F. Boulware, marking the beginning of the end in the ‘Le, et al v Zuffa LLC’ case.
The global settlement reached in July 2023 provides for a total payout of $375 million, although only a portion of this amount will go to the fighters represented in the ‘Le’ case. Still pending is the litigation of the ‘Johnson, et al v Zuffa LLC’ case, which has covered fighters since 2017 and still has the potential to generate structural changes to the UFC’s contracts and business practices.
WHY WAS THE UFC SUED?
The UFC was sued by a group of fighters in 2014, led by former stars such as Cung Le, Jon Fitch and Brandon Vera, who alleged that the company imposed restrictive contracts and limited athletes’ options in the labor market. According to the lawsuit, Zuffa LLC, which owned the UFC, artificially reduced fighters’ salaries through tactics that impeded competition and absorbed financially struggling rivals.
The plaintiffs argued that fighters could only be considered “world champions” if they had a contract with the UFC, forcing them to accept long-term contracts. As a result, most of the revenue generated by the UFC did not reach the athletes, who only received 20% of the promoter’s revenue.
THE UFC LAWSUIT AND ITS IMPLICATIONS
Judge Boulware found that the plaintiffs suffered economic damages due to the UFC’s anti-competitive practices. Although the UFC denied wrongdoing, it was forced to settle before the case went to trial in 2024. The decision avoided the risk of a conviction that could have resulted in payouts of up to $1.6 billion.
The preliminary settlement will award 70% of the total wage awards the UFC paid to the fighters during the period covered by the lawsuit, representing 40% of the estimated damages. This result is considered by the fighters’ attorneys to be “one of the best labor monopolization cases in the history of class action lawsuits.”
WHAT DOES IT MEAN FOR THE FIGHTERS?
Payments to the fighters will be calculated based on their compensation during the period of the lawsuit, plus $14,000 per fight. The amounts vary, with some fighters receiving more than $1 million, while others will receive more than $100,000 or $50,000, depending on their fight history.
However, fighters included in the ‘Johnson’ lawsuit may still receive more compensation and, more importantly, obtain court relief that could change the UFC’s contracts and business practices.
THE ROAD TO SETTLEMENT WITH THE UFC
The antitrust lawsuit took nearly a decade to move forward due to a variety of factors, including the pandemic and other litigation that delayed Judge Boulware’s ruling. Despite the obstacles, the ‘Le’ case managed to survive the motion to dismiss and obtain class certification, making it a landmark case in employment antitrust jurisprudence.
The UFC opted for the settlement to avoid the risks of a jury trial, where the company could have faced even greater damages. The settlement reached avoids the uncertainty of a protracted appeal that could have left fighters without compensation for several more years.
WILL UFC’S BUSINESS PRACTICES CHANGE?
While the $375 million settlement is an important milestone, it does not guarantee immediate changes to the UFC’s business practices. Any contractual reforms or adjustments to its business model will depend on the outcome of the ‘Johnson’ lawsuit, which remains in early discovery.
