TKO to Pay $335M to Settle Legal Bout Against UFC Fighters Ahead of Trial

Winston Cho
·2 min read
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A legal showdown between Ultimate Fighting Championship and more than 1,200 fighters suing for wage suppression has settled.

TKO Group — born out of the marriage between UFC and WWE, with the aim of becoming a sports marketing powerhouse — will pay $335 million to resolve the class action from fighters, according to a Wednesday securities filing. The settlement, reached on March 13, will be paid in installments.

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“We are pleased to have reached an agreement to settle all claims asserted in both the Le and Johnson class action lawsuits, bringing litigation to a close and benefiting all parties,” said a UFC spokesperson in a statement. “The final terms of the settlement will be submitted to the court for approval.”

A trial expected to last four weeks was scheduled to start on April 15, with damages pegged at roughly $1.6 billion. At the center of the case was allegations that UFC used longterm, exclusive contracts to substantially delay, or in some cases, totally prevent free-agency; coerced fighters into re-signing deals; and acquired or closed down multiple competing MMA promoters in violation of antitrust laws.

As a result of the alleged scheme, the class action argued UFC wields “monopsony power” — a dynamic in which a single buyer owns a monopoly, allowing it to purchase labor under market value. A pivotal ruling in favor of fighters came down last year when the court certified a class of 1,214 fighters who competed in bouts from 2010 to 2017, though a separate class of plaintiffs whose identities were allegedly exploited by the Dana White-led outfit weren’t allowed to proceed.

TKO’s securities filing doesn’t mention injunctive relief, which could leave long-term exclusive and “right-to-match” contracts, which prevent fighters from negotiating higher pay from rival promoters, on the table.

The move may be viewed favorably by Wall Street. In a report, investment banking firm Guggenheim Securities said that it considers the settlement a “positive outcome for multiple reasons.” It explained that the deal “should be easily digestible for TKO” and that it “likely clears an overhand for shareholder returns to be announced potentially later this year.” TKO shares on Wednesday are up roughly six percent.

In another antitrust lawsuit, TKO’s WWE in December settled a lawsuit brought by a rival accusing it of monopolizing the professional wrestling media market. It disclosed in a February securities filing that it paid $20 million to resolve the suit, which accused the company of pressuring third parties to abandon contracts and prospective relationships with MLW.

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