The antitrust lawsuit in opposition to the UFC is over and the shareholders are completely happy. That was the large information Wednesday, because the UFC’s mum or dad firm — TKO Group Holdings — filed a disclosure with the Securities and Trade Fee revealing that the corporate has settled two separate class motion lawsuits with a complete payout of $335 million.
Inside 20 minutes, the TKO inventory worth had jumped greater than 5% and was up 7.84% at market shut. Clearly, traders are completely happy to see these lawsuits, with estimated potential damages set as excessive as $1.6 billion, get put to relaxation.
However what does all of it imply for the UFC, the fighters, and the game of MMA? To get a full image of that, we’ll have to attend for nonetheless extra mud to settle. Whereas we all know the greenback quantity of the settlement, we don’t know but how it is going to be apportioned among the many fighters concerned or what different provisions may be included within the settlement.
John Nash, who’s coated these antitrust circumstances extensively on his Substack and “Hey Not The Face!” podcast, mentioned he expects there to be some modifications to straightforward UFC contracts included as a part of the settlement.
“If I needed to guess, I’d say any modifications would in all probability be just like what they had been for the 2017 [UFC] contracts,” Nash instructed Yahoo Sports activities. “That might put a timeline and perhaps one thing like a five-year most on the [fighter] contracts.”
These modifications helped make it doable for then-UFC heavyweight champion Francis Ngannou to attend out his UFC contract and change into a free agent. He’s since secured huge paydays as a professional boxer that had been far in extra of what Ngannou has mentioned he earned as a UFC champion, and it possible wouldn’t have been doable with out these transient however consequential contractual modifications.
That could possibly be a constructive change for fighters, but it surely’s removed from the full realignment of the game that some fighters within the lawsuit class had referred to as for. And whereas it possible means six-figure payouts for a lot of of these fighters, it additionally shocked many individuals that fighters can be keen to just accept a settlement quite than insisting on their day in court docket.
Nash, nonetheless, wasn’t fairly so shocked.
“I feel lots of people obtained enamored by the potential of a trial right here, however the actuality is that that’s too dangerous a chance for both occasion,” Nash mentioned. “Folks obtained obsessed over the quantity, the $800 million to $1.6 billion [which would then be tripled under U.S. antitrust law], however that’s why I mentioned [the UFC] would in all probability need to settle as a result of the chance is so unimaginable.”
For the fighters, there was appreciable danger as properly. In the event that they went to trial and misplaced, they’d get nothing. Even when they did win a serious victory, it may be years earlier than they noticed any of the cash from it. Lots of the fighters who had been instrumental in bringing these fits had claimed loftier objectives on the outset, however now appear to have determined that cash in hand outweighed a few of these broader aspirations.
Former UFC middleweight Nate Quarry, who was a vocal a part of the fighter cohort on this class motion, wrote on Reddit that the settlement “appeared to be the most suitable choice” obtainable at this level.
“No, we didn’t get all the things we wished,” Quarry wrote. “Our aim all alongside was to vary the game. Nevertheless, we had fairly a couple of delays that we needed to take care of. And to get injunctive aid, ie change the game, we might have needed to refile each lawsuits and mix them, undergo discovery yet again, retake depositions, a couple of 5 yr delay after which hope we get granted class motion standing once more. We’d be one other ten years simply to be the place we’re at present with no assure of successful any punitive quantity of injunctive change.
“As I mentioned, weighing all of the doable outcomes this appeared one of the best end result. We’re not hi-fiving each other. However we’re happy that a whole lot of fighters are going to be getting some compensation for being underpaid. Want we may’ve executed extra.”
One loser within the settlement could possibly be the competing MMA organizations who had been hoping to see the enjoying subject leveled. If a court docket had discovered that the UFC used anticompetitive practices to realize monopsony energy within the sport, the ensuing fallout in all probability would have produced a better setting for selling occasions outdoors the UFC. As a substitute, the established order is prone to be principally upheld, sustaining the UFC’s place because the unchallenged behemoth of MMA.
However there’s additionally the possibility that followers and media misplaced out slightly right here too. A lot of what we all know in regards to the internal workings of the UFC’s enterprise comes from two sources: the sale of the UFC to Endeavor in 2016 and the paperwork circulated amongst potential traders, and the depositions and paperwork that had been unsealed as a part of the early levels of those antitrust circumstances.
If these lawsuits had gone to trial, we in all probability would have discovered much more about how the UFC operates, the way it views and treats its fighters, and the way its managed to remain up to now forward of potential opponents. As a substitute, the settlement slams that door shut. Some secrets and techniques get to remain within the black field in any case.
There’s additionally the query of the place this leaves hopes for lasting modifications. Again in 2015, after I first spoke to Rob Maysey, an lawyer who was instrumental in bringing the antitrust go well with, he laid out a plan to make use of antitrust motion to pressure the UFC to barter with a fighters affiliation. Maysey even helped begin one such affiliation — the Blended Martial Arts Fighters Affiliation — although it was principally an aspirational group that lacked collective bargaining energy with the UFC.
Simply because the NFL gamers gained an affiliation of their very own and the collective bargaining energy to go along with it solely via arduous authorized motion, Maysey mentioned, this was the fighters’ finest hope to type an affiliation that the UFC can be legally pressured to acknowledge and negotiate with. However what turns into of that hope now that fighters have agreed to a settlement and a few assured money as an alternative?
Maysey didn’t reply to a request for remark, however the MMAFA account posted a message on social media saying it was “happy with the settlement and can disclose extra after we file with the Court docket in 45-60 days.”
Whereas the UFC may be on its option to being a couple of hundred million {dollars} lighter within the pockets by then, it appears possible it’ll nonetheless have the identical agency grasp on the game that’s now bringing the corporate greater than $1 billion per yr — and rising.