Back in 2014, the Ultimate Fighting Championship (UFC) faced accusations from several fighters, including Kung Lee, Jon Fitch, and Nate Qualley, for breaching its rules. This resulted in a class action lawsuit based on the Sherman Act Section 2.
The lawsuit has now been resolved through a settlement agreement before going to trial.
The settlement, totaling $335 million, was agreed upon on March 13, 2024, to be paid by the UFC and its subsidiaries in installments over an agreed period. TKO mentioned in a recent regulatory disclosure that all claims from both class actions have been settled. The terms will be formalized in a contract for court approval, and the settlement amount may be tax deductible.
This settlement is significantly lower than the billions initially sought by the plaintiffs.
The initial lawsuit from 2014 was combined with other related cases, including a recent lawsuit from Kajan Johnson in 2021. Johnson gained attention in 2017 for his vocal criticisms of Reebok’s relationship with UFC fighters.
The antitrust case now involves over 1,200 athletes.
A spokesperson for the fighters expressed satisfaction with the settlement, noting that further details would be provided by their legal representatives in court filings within the next 45 to 60 days. The settlement requires preliminary and final approval from the presiding judge after notifying the entire class.
The impact of this settlement on the UFC’s business practices is yet to be determined.
The implications of this settlement are expected to raise significant discussions in the future. Beyond financial concerns, the complaints also addressed the UFC’s alleged practices of stifling competition and limiting fighters’ earnings through restrictive agreements, thereby maintaining a monopoly.
If this settlement is merely a temporary fix, the underlying issues may persist.
Following this development, TKO Group Holdings, which took over ZUFFA’s operations in 2016, saw a rise in its stock value, indicating market confidence. Stay tuned for updates on this evolving situation, especially as final approval from the judge looms.
