The antitrust lawsuit against the UFC is over and the shareholders are happy. That was the big news Wednesday, as the UFC’s parent company — TKO Group Holdings — filed a disclosure with the Securities and Exchange Commission revealing that the company has settled two separate class action lawsuits with a total payout of $335 million.
Within 20 minutes, the TKO stock price had jumped more than 5% and was up 7.84% at market close. Clearly, investors are happy to see these lawsuits, with estimated potential damages set as high as $1.6 billion, get put to rest.
But what does it all mean for the UFC, the fighters, and the sport of MMA? To get a full picture of that, we’ll have to wait for still more dust to settle. While we know the dollar amount of the settlement, we don’t know yet how it will be apportioned among the fighters involved or what other provisions might be included in the settlement.
John Nash, who’s covered these antitrust cases extensively on his Substack and “Hey Not The Face!” podcast, said he expects there to be some changes to standard UFC contracts included as part of the settlement.
“If I had to guess, I’d say any changes would probably be similar to what they were for the 2017 [UFC] contracts,” Nash told Yahoo Sports. “That could put a timeline and maybe something like a five-year maximum on the [fighter] contracts.”
Those changes helped make it possible for then-UFC heavyweight champion Francis Ngannou to wait out his UFC contract and become a free agent. He’s since secured big paydays as a pro boxer that were far in excess of what Ngannou has said he earned as a UFC champion, and it likely wouldn’t have been possible without those brief but consequential contractual changes.
That could be a positive change for fighters, but it’s far from the total realignment of the sport that some fighters in the lawsuit class had called for. And while it likely means six-figure payouts for many of those fighters, it also surprised many people that fighters would be willing to accept a settlement rather than insisting on their day in court.
Nash, however, wasn’t quite so surprised.
“I think a lot of people got enamored by the possibility of a trial here, but the reality is that that’s too risky a possibility for either party,” Nash said. “People got obsessed over the number, the $800 million to $1.6 billion [which would then be tripled under U.S. antitrust law], but that’s why I said [the UFC] would probably have to settle because the risk is so incredible.”
For the fighters, there was considerable risk as well. If they went to trial and lost, they’d get nothing. Even if they did win a major victory, it might be years before they saw any of the money from it. Many of the fighters who were instrumental in bringing these suits had claimed loftier goals at the outset, but now seem to have decided that money in hand outweighed some of those broader aspirations.
Former UFC middleweight Nate Quarry, who was a vocal part of the fighter cohort in this class action, wrote on Reddit that the settlement “seemed to be the best option” available at this point.
“No, we didn’t get everything we wanted,” Quarry wrote. “Our goal all along was to change the sport. However, we had quite a few delays that we had to deal with. And to get injunctive relief, ie change the sport, we would have had to refile both lawsuits and combine them, go through discovery all over again, retake depositions, about a five year delay and then hope we get granted class action status again. We’d be looking at another ten years just to be where we are today with no guarantee of winning any punitive amount of injunctive change.
“As I said, weighing all the possible outcomes this seemed the best outcome. We’re not hi-fiving one another. But we are pleased that a lot of fighters are going to be getting some compensation for being underpaid. Wish we could’ve done more.”
One loser in the settlement could be the competing MMA organizations who were hoping to see the playing field leveled. If a court had found that the UFC used anticompetitive practices to gain monopsony power in the sport, the resulting fallout probably would have produced an easier environment for promoting events outside the UFC. Instead, the status quo is likely to be mostly upheld, maintaining the UFC’s position as the unchallenged behemoth of MMA.
But there’s also the chance that fans and media lost out a little here too.
The UFC’s inner workings have been a subject of intrigue for many, with valuable insights coming from the sale of the organization to Endeavor in 2016 and the legal documents revealed during the antitrust cases. These cases could have shed further light on how the UFC operates, its treatment of fighters, and its competitive edge, but the recent settlement has closed that chapter.
The settlement not only keeps certain secrets hidden but also raises questions about the future of lasting changes in the industry. There were hopes that legal action, similar to what NFL players undertook, could lead to the formation of a fighters association with bargaining power. However, with fighters opting for a settlement and cash payout, the fate of such associations remains uncertain.
Rob Maysey, a key figure in the antitrust suit and the formation of the Mixed Martial Arts Fighters Association, had championed the idea of forcing the UFC to negotiate with a fighters association. While Maysey did not comment on the recent developments, the MMAFA expressed satisfaction with the settlement and hinted at further disclosures in the near future.
Despite the financial implications of the settlement for the UFC, which could amount to hundreds of millions of dollars, the organization is likely to maintain its dominant position in the industry, generating over $1 billion annually. The future landscape of UFC and fighter relations remains to be seen as the dust settles on this legal saga.