A federal judge scuttled the proposed $335 million settlement between the UFC and fighters in two separate class-action lawsuits who alleged the MMA promoter violated antitrust laws.
On Tuesday, Judge Richard Franklin Boulware IIof the U.S. District Court in Nevada issued a ruling denying the settlement. The judge, who did not provide any explanation in the initial ruling, set a status conference for Aug. 19 and a trial date of Oct. 28 for one of the two cases that were part of the settlement, Le v. Zuffa. It’s possible the parties could reach a new settlement agreement before then for the court’s consideration.
The decision comes after TKO Group Holdings, UFC’s parent company, announced an agreement in March 2024 to pay $335 million to settle two class-action lawsuits. Zuffa, the predecessor entity that owned and operated UFC, was the defendant in five related class-action lawsuits filed between December 2014 and March 2015, which were consolidated into a single action in June 2015 (Le et al. v. Zuffa). Of the proposed $335 million settlement, 90% was to have been paid to the plaintiffs represented in Le v. Zuffa. An additional lawsuit, Johnson et al. v. Zuffa, was filed in 2021.
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In an SEC filing Wednesday, TKO Group said regarding the judge’s rejection of the settlement, “The company is evaluating all of its options, including, without limitation, an appeal, and has also initiated discussions with plaintiffs’ counsel, who have expressed a willingness to engage in separate settlement discussions for the Le and Johnson cases. A motion to dismiss the complaint in Johnson remains pending and no trial date has been set.”
In a subsequently released statement, TKO said, “We obviously disagree with this ruling and believe it disregards the expertise of counsel from both sides, as well as that of an accomplished and expert mediator – all of whom have decades of experience in antitrust case law. It prevents the athletes from receiving what they have argued is in their best interest and unwinds an extensively negotiated settlement that, in the plaintiffs’ counsel’s own words, ‘would far surpass the typical antitrust class-action settlement’ and ‘is an excellent result for the Settlement Classes by all traditional measures.’”
The company’s statement continued, “Additionally, by taking the unusual step of denying the settlement at this preliminary approval stage, the judge is also denying the athletes their right to be heard during this pivotal moment in the case.”
According to the UFC, Boulware’s denial of the settlement agreement at the preliminary approval stage is unprecedented among recent antitrust class-action suits. At the most recent court hearing on the settlement approval (July 12), the plaintiffs’ counsel urged the judge to approve the settlement, arguing that a denial “would set back the rights of fighters for years.”
Under the proposed settlement, fighters in Le v. Zuffa were to receive on average $200,000, with a median recovery of $73,000 and a minimum of $13,000 — with 36 class members to have been paid more than $1 million.
The lawsuits alleged Zuffa violated antitrust laws by paying UFC fighters far less than they were entitled to receive and eliminating or hurting other MMA promoters. UFC fighters Cung Le, Nate Quarry and Jon Fitch filed their initial complaint against Zuffa in federal court in California in December 2014; that was subsequently joined by fighters Brandon Vera, Luis Javier Vazquez and Kyle Kingsbury. On June 23, 2021, Kajan Johnson and C.B. Dollaway filed a proposed class-action antitrust lawsuit against Zuffa and Endeavor with similar allegations that UFC engaged in illegal anticompetitive action.
TKO Group was formed last year through the Endeavor-led merger of UFC and WWE. Endeavor maintains a majority interest in TKO.
TKO is scheduled to release second-quarter 2024 results prior to the market opening on Thursday, Aug. 8.
