A federal judge has granted preliminary approval for a settlement between a major MMA promotion and fighters who allege they were underpaid. Can you elaborate on the background of this case?

Nearly a decade after filing a federal antitrust lawsuit against the Ultimate Fighting Championship (UFC), over 1,000 current and former professional mixed martial artists are set to receive payments from a $260 million pool starting next June. Judge Richard F. Boulware granted preliminary approval for a settlement on Tuesday, which could resolve the protracted legal battle known as Le, et al v Zuffa LLC. The proposed $375 million agreement would officially conclude the case covering UFC fighters from the end of 2010 to the present, while another ongoing case, Johnson, et al v Zuffa LLC, represents fighters starting in July 2017.

What does this settlement mean for the fighters involved and their legal representation?

The co-lead class counsel for the fighters are expected to receive a notable portion of the Le settlement, pending Judge Boulware’s final approval. They also have the potential to secure even more from the Johnson case, as it raises important questions about the UFC’s contracting practices and business model.

Could you give us some context on the UFC itself?

Founded in 1993, the Ultimate Fighting Championship is the premier mixed martial arts organization worldwide, boasting over 600 fighters from nearly 80 countries. In 2001, a group led by casino magnates Frank and Lorenzo Fertitta took ownership of the struggling company for $2 million, propelling the UFC into mainstream prominence. Their leadership, alongside president and CEO Dana White, transformed the UFC into a multi-billion-dollar enterprise, culminating in its sale to Endeavor for $4.2 billion. Now part of the publicly traded TKO Group Holdings, the UFC is valued at over $12 billion.

What led to the lawsuit against the UFC?

The UFC’s rise saw it absorb many competitors, limiting options for fighters and consolidating its power in the sport. A belt from the UFC became synonymous with being a “world champion,” effectively trapping fighters within its promotional contracts. The antitrust case was initiated in 2014 by former fighters—including Cung Le and Nathan Quarry—who accused Zuffa of enforcing restrictive long-term contracts that stifled earnings and market options. They claim the UFC paid fighters only about 20% of its revenue, which is significantly lower than other major sports leagues.

What was the rationale behind the UFC settling for $375 million?

Judge Boulware acknowledged that the plaintiffs demonstrated they were economically harmed by the UFC’s anti-competitive actions. While UFC lawyers maintained that the company acted appropriately, they opted for a settlement to avoid the costs and distractions of ongoing litigation. A proposed settlement in July fell through due to Judge Boulware’s insistence on more substantial payouts, leading to the current agreement that could provide the fighters with approximately 70% of the UFC’s reported fighter compensation during the class period.

Why did many fighters from 2010 to 2017 choose to settle rather than take their case to trial?

Many fighters involved in the Le class have expressed urgency for potential compensation. The volume of heartfelt declarations submitted to the court resonated with Judge Boulware, influencing his stance on the settlement. Moving forward to a jury trial could have posed significant risks for the fighters. Instead, the settlement reflects about 30% of the earnings fighters made during the relevant period, with certain individuals expecting payments exceeding $1 million.

What challenges did this lawsuit face throughout its nearly decade-long journey?

Navigating an antitrust class action was always anticipated to take considerable time. Fighters were initially informed that the process could last five to six years; the unanticipated COVID-19 pandemic also delayed proceedings. Further complicating matters was a separate price-fixing case that needed resolution before Boulware could issue key rulings in the UFC case.

What are the broader implications of this settlement for UFC’s future business practices?

As it stands, significant changes to UFC’s contractual model are unlikely until the Johnson case moves forward. Injunctive relief—the court’s power to impose changes to the UFC’s practices—remains a future concern for many fighters. The Le case has largely focused on monetary compensation, while the Johnson action may push for structural changes within the UFC.

Are there any notable legal impacts stemming from this settlement?

The initial settlement included some contract modifications, but many fighters signed class-action waivers that limit their capacity to challenge the UFC’s practices. Notably, a Supreme Court ruling in 2018 upholding such waivers adds complexity to the Johnson case. However, Professor Eric Posner from the University of Chicago Law School suggests that the Le ruling is historic for labor-side claims under antitrust law. The outcomes of both cases could significantly influence future litigation regarding fighter protections and antitrust enforcement in sports.