UFC facing class action lawsuit worth up to $5 billion after fighters score legal victory
The UFC’s roughest fight might be in court over the next few years.
A group of former UFC fighters suing the promotion scored a key legal victory on Thursday when federal judge Richard Boulware said he would grant their lawsuit class-action status, according Kevin Draper of The New York Times.
The antitrust lawsuit dates all the way back to 2014, initially filed by Cung Le Jon Fitch and Nate Quarry against the UFC’s parent company. The lawsuit claims the UFC has abused its monopoly power in the MMA labor market, suppressing fighter wages.
While competitors remain like Bellator and the PFL, other larger competitors like Strikeforce, Pride and WEC have been bought out and absorbed by the UFC.
From ESPN:
"This is an enormous win for all UFC fighters, past, present and future," Le said in a statement provided by the MMA Fighters Association, which backs the lawsuit. "For too long, the UFC has taken advantage of fighters by monopolizing the industry, and cheated fighters out of millions of dollars each year. Today's decision by Judge Boulware means our case can proceed for all UFC fighters that are part of the class."
The change in status will reportedly put any fighter who fought in the UFC between late 2010 and 2017, a group of about 1,200 fighters, to receive money from a legal victory or settlement unless they opt out.
The UFC lawsuit could be worth billions of dollars
The full price tag the UFC is facing if they lose in court: nearly $5 billion.
Per the Times, that number comes from how UFC fighters have historically seen less than 20 percent of the promotion’s total revenue, as opposed to the 50/50 splits seen in the NFL, NBA and NHL. A formula reportedly found the wage gap from differing revenue splits to amount to $1.6 billion, and damages are tripled in antitrust cases.
Will the UFC end up having to cut $5 billion in checks to its fighters? Probably not.
First of all, there are still plenty of obstacles for the lawsuit to even reach the trial phase. The UFC reportedly plans to appeal the granting of class action status to the lawsuit, and has also filed for a motion for summary judgement to throw out the case.
If both of those attempts to cut down the lawsuit fail, one expert told the Times the UFC will want to settle the case rather than take on a $5 billion risk with a trial. The expert said that antitrust settlements average at about 19 percent of single damages, working out to a very rough estimate of over $300 million. The UFC would also want to avoid the risk posed to its core business model, as a loss would fundamentally change how it signs fighters.
The plaintiffs are also reportedly seeking structural remedies in the UFC’s business practices, including the banning of long-term contracts.
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