SUMMARY
- Over 1200 UFC fighters are trying to sue the company for billions of dollars.
- In November 2023, the court rejected the UFC's attempt to appeal class certification.
The spotlight will shift from the octagon to the courtroom in April 2024, where the UFC faces a billion-dollar lawsuit. The US Ninth Circuit Court of Appeals recently upheld the class action status, setting the stage for an intense legal battle starting in April. The setback occurred in November 2023, when the appeals court rejected the UFC’s attempt to appeal class certification.
U.S. District Judge Richard Boulware’s decision thwarted the UFC’s strategy to delay the case for 2-3 more years. The lawsuit, initiated in 2014 by former fighters led by Class Representatives Nate Quarry, Cung Le, Jon Fitch, Brandon Vera, Luis Javier Vazquez, and Kyle Kingsbury, alleged UFC’s violation of antitrust laws, resulting in reduced fighter pay. The recent development expands the plaintiff group to over 1,200 current and former fighters.
Despite no prominent names joining beyond the initial group, the judges’ recent denial may prompt more fighters to participate. Over the nine-year legal saga, the UFC’s attempts to appeal and delay have failed, allowing the case to progress. Recent disclosures of fighter salaries offer a glimpse, but the real revelations may be forthcoming.
Our class action against the UFC has now been certified. We are now representing 1,215 fighters. This is a huge step forward in our fight to make MMA a legitimate sport. God is great!!! The power of prayer. #UFCClassAction #MMAFA https://t.co/7EC5lmOmAw pic.twitter.com/h8C5RPuNmJ
— Cung Le (@CungLe185) August 11, 2023
The fighters seek justice outside the octagon, fueled by the recent legal victories. While the end of this prolonged lawsuit is not yet in sight, the momentum is firmly with the plaintiffs, making the courtroom drama a focal point leading up to possibly far-reaching implications for the sport.
UFC’s Antitrust lawsuit explained
In early November 2023, the UFC faced a setback as it failed to overturn the class action status granted to hundreds of mixed martial arts fighters suing for over a billion dollars in wages. The lawsuit alleges that the UFC’s parent company, Zuffa LLC, unlawfully established and maintained a monopoly in the MMA industry.
They are resulting in fighters receiving significantly lower pay than they would in a competitive market. With a crucial ruling from the US Ninth Circuit Court of Appeals, the trial is set to commence in April 2024. The plaintiffs, potentially comprising more than 1,200 fighters who competed in the UFC between 2010 and 2017, seek damages ranging from $800 million to $1.6 billion.
Francis Ngannou is the prime example of a fighter who stood up against the UFC by leaving the promotion entirely. Success in this lawsuit could have far-reaching implications, reshaping the MMA landscape and forcing the UFC to reconsider its operational practices. The UFC’s dominance in the MMA industry solidified in 2006 after the demise of Japan-based PRIDE FC.
Granting the organization substantial negotiating power over fighters. This leverage led to a noticeable decline in fighter pay as the UFC virtually monopolized the sport, leaving fighters with limited bargaining options. Faced with few alternatives, fighters had to accept the UFC’s terms or risk being without a professional fighting platform.
Consequently, fighter pay failed to keep pace with the sport’s growing popularity and profitability. While most sports leagues allocate 47% to 50% of revenue to athletes, the UFC historically paid out only 16% to 19% of its revenues to fighters.
The UFC’s dominant position also pressured fighters into signing long-term contracts with restrictive non-compete clauses, preventing them from participating in other MMA organizations. This not only hindered fighters’ earnings and career flexibility but also raised concerns about the fairness and competitiveness of the sport, and yet the UFC continues to report record revenues.
The organization generated $1.14 billion in 2022, with $611.9 million in revenue during the first two quarters of 2023, marking a 16% increase from the same period in 2022. In response to reduced pay and contractual restrictions, a group of former UFC fighters initiated an antitrust lawsuit against the UFC in December 2014. Nearly a decade later, the case is finally heading to trial.
What happens if UFC loses the antitrust lawsuit?
In the event of an unfavorable outcome for the UFC in the antitrust lawsuit, the repercussions could be profound. Though Dana White is not worried, the potential financial burden on the organization to compensate fighters might not only be substantial but could also instigate a significant overhaul in its business practices.
This transformation may involve a reassessment of revenue distribution, granting fighters increased negotiating power, and potentially allowing them more influence over the use of their likenesses, particularly in advertising. Such adjustments could significantly impact the UFC’s business model and overall profitability.
The fighters involved in the lawsuit are seeking damages ranging from $800 million to $1.6 billion from the UFC. In antitrust cases like this one, damages are typically tripled, meaning the UFC might face a potential payout of nearly $5 billion.
Complicating matters further, the UFC is concurrently contending with a subsequent antitrust lawsuit initiated by two former fighters, covering the period from June 2017 to the present day. Given the inherent risks associated with proceeding to trial in an antitrust lawsuit, the UFC may opt to explore the possibility of settling with the plaintiffs.
The 9th Circuit has denied the UFC’s request to appeal our class certification order! On to trial! We are making progress in court. We now need @SenMullin’s help to get us the same legal protections as boxers which allows them to compete in sport! https://t.co/7EC5lmOmAw pic.twitter.com/tnEBRJAQzJ
— Cung Le (@CungLe185) November 2, 2023
While a settlement would undeniably pose a financial strain on the organization, it serves as a strategic move to avoid a less favorable outcome that could result from a jury trial. In the face of looming antitrust litigation and with aspirations reaching far and wide, the UFC now finds itself in an existential battle unlike any it has encountered before.
The ramifications of the lawsuit’s outcome have the potential to resonate not only within the MMA community but also throughout the broader sports landscape.