US court recognizes UFC as class action lawsuit, promotion risks losing nearly $5 billion

The largest mixed martial arts (MMA) promotion, the UFC, is facing a problem that could cost its owners billions of dollars in the long run. A court in the US state of Nevada recognized an old, almost forgotten lawsuit filed by UFC fighters, who insist that the structure artificially lowered their fees, using its dominant position in the market, as a collective one. This means that now about 1.2 thousand fighters can oppose the UFC, and the cost of resolving the conflict will reach almost $ 5 billion.

The court of the US state of Nevada made a decision that could have a very negative impact on the activities of the largest promotion of mixed martial arts. Judge Richard Bulweir has ruled that a lawsuit filed against the UFC by a number of his former fighters will be classified as a class action lawsuit. According to the court decision, now up to 1.2 thousand athletes can join the lawsuit. All non-US citizens are excluded from the list of potential plaintiffs, as well as persons who do not have a residence permit in the country. However, the right to claim compensation is reserved for all fighters, regardless of their nationality, who fought in the United States between December 16, 2010 and June 30, 2017. At the same time, according to American laws, potential victims of illegal actions of the UFC are not required to declare that they are joining the lawsuit.

All persons who meet the criteria of the court will automatically be included in the list of plaintiffs. But they can withdraw from the process by submitting an appropriate application.

The litigation in question is quite old. The lawsuit was filed back in 2014 by a number of former UFC fighters, among which are not the most popular athletes such as Chun Li (he has nine wins and three losses) and Jon Fitch (28 wins, eight losses, two draws). The complainants accuse the UFC of abusing its dominant position in the MMA market, violating antitrust laws.

The lawsuit was filed against Zuffa, then the parent structure of the UFC. The plaintiffs believe that she resorted to illegal practices in order to save money.

They contend that the UFC has been absorbing other notable promotions, such as taking control of Pride and Strikeforce, and then wielding its increased influence. Directly for the fighters, according to the applicants, this resulted in an artificial understatement of fees. In conditions of reduced competition, they had to agree to a reduction in earnings. “UFC fighters receive only 20% of the revenue generated by tournaments with their participation in prize money,” Eric Kramer, a lawyer representing the plaintiffs, told ESPN. “At the same time, in boxing and other top sports, payouts exceed 50%.” “I am delighted to be able to announce that the court has recognized the claim as a class action,” Kramer added. “We are looking forward to when we can present our arguments in the court of Las Vegas. The fight for the fighters continues.”

The above case, it should be noted, went very slowly. A petition to recognize the claim as a class action was filed back in 2020. And at the same time, Judge Bulweir said in the operative part of the decision that he supported the position of the plaintiffs. But it so happened that it took him almost three years to draw up the motivational part of the verdict.

The recognition of the lawsuit as a class action significantly worsens the position of the UFC in this story. In the lawsuit, filed in 2014, the amount of potential compensation to the plaintiffs was estimated in a wide range – from $811 million to $1.6 billion. The court’s support of the antitrust substance of the lawsuit potentially threatens to triple the payments.

After all, according to US antitrust laws, the court has the right to increase the amount of payments three times as much as stated. That is, they can reach $4.8 billion.

However, as UFC lawyer William Isaacson noted, what happened was just “another step in a lengthy legal process.” “This is just another stage, and we are confident that the court will fully recognize the claims as unjustified. We have previously notified the judge of our intention to challenge his decision,” said lawyer Isaacson. He also noted that the growing business of the UFC, against which the payments to athletes are increasing, is clear evidence that the claims of the plaintiffs have no basis.

The UFC is currently controlled by Endeavor Group Holdings. In the spring of 2023, she will also acquired World Wrestling Entertainment, the arm behind America’s popular martial arts-based wrestling show, has brought the combined group’s capitalization to over $20 billion.

Alexander Petrov