UFC promotion has agreed to an out-of-court settlement of the lawsuit filed by the fighters

The UFC, the largest and most influential promotion in the mixed martial arts (MMA) industry, has reached an out-of-court settlement of a class-action lawsuit brought by a number of former fighters on the tour. They claimed they were underpaid because the UFC had a de facto monopolization of the market. The potential amount of compensation that the UFC could be forced to pay was estimated at almost $5 billion. In the end, the structure would end up losing only $335 million.

On Thursday it became known that TKO Group Holdings, the parent company of the largest mixed martial arts promotion, the UFC, has reached an out-of-court settlement of a lawsuit filed against the structure by a number of its former fighters. As follows from data released by the US Securities and Exchange Commission (SEC), the parties reached an agreement on March 13. From the message of the American financial market regulator it follows that TKO Group Holdings has agreed to pay the plaintiffs $335 million. The funds will not be paid immediately, but over “some time.” The agreement reached by the parties still requires court approval. But judging by the comments of the parties who actively supported the agreement, problems should not arise. In particular, the Association of Mixed Martial Arts Fighters (MMAF) noted that “at the moment they are happy with what happened.” The UFC statement also said that the structure is satisfied with the agreements reached.

Note that the lawsuit against the UFC could potentially become one of the most notable in the history of sports. Technically, the lawsuit itself is old; for a long time, few people remembered it at all. It was submitted back in 2014 by a number of former UFC fighters, including not the most popular athletes, such as Chun Li (his record includes nine wins and three losses) and Jon Fitch (28 wins, eight losses, two draws). The applicants accused the UFC of abusing its dominant position in the MMA market, that is, of violating antitrust laws. The plaintiffs alleged that the UFC absorbed other prominent promotions, notably taking control of Pride and Strikeforce, and then wielded increased influence. Directly for the fighters, according to the applicants, this resulted in an artificial reduction in fees. In conditions of decreased competition, they had to agree to a decrease in earnings. The lawsuit stated that other major sports leagues typically allocate about half of their revenue to athlete incentives. In the UFC, fighters received no more than 20%.

The claim remained almost forgotten for a long time. But last summer, when Las Vegas Judge Richard Boulware ruled that it would be classified as a class action and also agreed that the case involved antitrust violations, it received a major boost. According to the court decision, up to 1.2 thousand athletes who worked for the UFC between December 16, 2010 and June 30, 2017 could join the lawsuit. However, according to American law, potential victims of the UFC’s allegedly illegal actions were not required to join the lawsuit. All persons who met the court’s criteria were automatically included in the number of recipients of compensation.

As for the financial claims made by the plaintiffs, they varied in a wide range – from $811 million to $1.6 billion. And if the court had upheld the antimonopoly essence of the claim, the amount of compensation could have tripled and reached $4.8 billion. Obviously, such the prospect did not suit the owners of the UFC, who decided that it would be cheaper to pay off.

The UFC is currently controlled by Endeavor Group Holdings. In the spring of 2023, it also acquired World Wrestling Entertainment, a structure that develops popular wrestling in America, a show based on techniques from martial arts, as a result of which the capitalization of the combined group exceeded $20 billion. Endeavor’s revenues for the last fiscal year 2022/23 (ended in March last year) amounted to more than $5 billion.

Alexander Petrov