Fight for Your Right . . . To Fight? Breaking Down the UFC’s Antitrust Lawsuit
It appears that the fighters suing the Ultimate Fighting Championship (UFC) have landed a significant blow in their ongoing antitrust lawsuit, after an August 9 court ruling elevated the lawsuit to a class action. Many are wondering what impact this decision has on the lawsuit. Our team of reputed sports and entertainment attorneys can help explain what to look out for as this case progresses.
Background on the case against the UFC
Since 2014, the UFC has been embroiled in lawsuits with several fighters (now former fighters) in its organization over claims that it abused its monopoly power to suppress fighter pay. The fighters allege that the UFC violated the Sherman Antitrust Act, 15 U.S.C. § 2. This type of antitrust violation focuses on the actions that a single organization has taken to maintain its dominance or control in a marketplace.
The fighters suing the UFC include some big names in combat sports – Cung Le, Nate Quarry, Jon Fitch, Brandon Vera, Javier Luis Vazquez, and Kyle Kingsbury. In 2014, these fighters combined their separate lawsuits into a single suit against the UFC.
With an alleged 90% share of the market, the UFC is the largest promoter of mixed martial arts events. The fighters claim that the UFC schemed to establish such overwhelming market dominance that it could pay its fighters substantially less than what they would have been paid in a competitive market for their services. The fighters allege that the UFC bought up its five biggest rivals in the mixed martial arts industry since 2006, creating a monopsony that violates federal antitrust laws. A monopsony exists when there is one dominant buyer of a particular good or service. The fighters argue that because the UFC bought out its competitors, the UFC is a monopsony as the only buyer of a fighters’ services.
How are fighters currently paid by the UFC?
The UFC treats fighters as independent contractors, not employees. Generally, fighters receive no salary or benefits. According to the court’s recent decision, “the UFC does not pay for a fighter’s training, or any other expenses related to a fighter’s development or maintenance of their respective fighting skills.” In other words, UFC fighters are only compensated when they participate in a bout. Notably, however, UFC fighters are not permitted to compete for other organizations while under contract; this is more akin to a fighter being an employee, rather than an independent contractor.
What do the fighters want?
As posted on the website established by the fighters’ attorneys to keep fighters and the public in the loop about this case, “One of their goals is to recover money for all 1,200 fighters. Another goal is to force the UFC to change the way it does business.”
Specifically, the fighters are seeking to stop the UFC from imposing unfair contract terms. As one example, the fighters are seeking a ban on long-term contracts to allow them to seek alternative opportunities sooner and test the market or “free agency.” With a competitive marketplace for mixed martial arts bouts, the fighters would likely earn far more money; at a minimum, the fighters could choose from a variety of leagues within which to participate.
What impact does the recent class action decision have on this case?
A class action is a type of lawsuit in which a large number of people (known as a “class”) allege that they have been injured by a common act and sue a defendant for that harm as a group.
Here, U.S. District Judge Richard Boulware decided on August 9, 2023, to grant class action status to more than 1,200 fighters who competed in live professional UFC-promoted mixed martial arts bouts between December 2010 and June 2017.
The class action certification means that these 1,200+ fighters who fought in the UFC are automatically part of the lawsuit. Unless a UFC fighter “opts out,” their claims will be included in the case.
The decision to certify the class has been long-awaited, but the legal battle is far from over. If the UFC does eventually lose the lawsuit, then each fighter-member of the class will take a share of any money awarded. The fighters are seeking between $800 million and $1.6 billion in damages from the UFC. In antitrust lawsuits, like this one, the damages are tripled, which means the UFC could potentially have to pay nearly $5 billion.
Conclusion
The UFC is expected to appeal the class action certification. How the appeals process unfolds and whether the fighters ultimately succeed will have implications not just for the UFC, but also for the entire sports industry. For more guidance on the interplay between sports, business and law, reach out to a member of our team.
Contributions to this blog by Joseph Ford.