TKO Group, the owner of UFC and WWE, has made a deal with mixed martial arts fighters who claimed in different antitrust suits. antitrust suits that the UFC stifled competition and acted as a monopoly, which resulted in lower pay for fighters. The former UFC fighters were asking for $1.6 billion and changes in how the UFC operates. The company could have had to pay even more in damages, as damages are tripled in antitrust cases.
The settlement was reached on March 13 and was disclosed on Wednesday in a filing with the SEC. However, the full details have not been revealed yet and the agreement needs approval from a judge. It involved two similar class action suits, the first of which was first filed in December 2014 and the second in 2021. The original lawsuit was led by fighter Cung Le, and more than 1,200 fighters who competed for UFC between 2010 and 2017 joined the class action.
That lawsuit claimed, “The UFC has engaged in an illegal scheme to eliminate competition from would-be rival MMA Promoters by systematically preventing them from gaining access to resources critical to successful MMA Promotions, including by imposing extreme restrictions on UFC Fighters’ ability to fight for would-be rivals during and after their tenure with the UFC. As part of the scheme, the UFC not only controls Fighters’ careers, but also takes and expropriates the rights to their names and likenesses in perpetuity. As a result of this scheme, UFC Fighters are paid a fraction of what they would earn in a competitive marketplace.”
The plaintiffs in the lawsuits included several well-known MMA fighters, such as Le, Jon Fitch, Nate Quarry, Brandon Vera, and Kyle Kingsbury. The settlement averages to almost $300,000 per member of the class, although some fighters have chosen not to be included.
The fighters accused UFC of violating Section 2 of the Sherman Anti-Trust Act, which prohibited monopolies. The company’s use of restrictive contracts remains controversial, and there is a possibility that performers in similar positions, like those under contract to TKO Group’s WWE, may file a similar lawsuit. However, WWE has recently allowed its wrestlers to make more outside appearances, which might help it avoid similar legal action.
The settlement will be paid in installments, according to the filing, and TKO believes that the settlement will be tax deductible. TKO Group’s majority owner is Hollywood entertainment talent and media company Endeavor.
The company continues to face competition, although it is not as big as UFC. This includes the rival Bellator promotion, which was sold last year by Paramount, and recently secured a streaming deal on Max.
