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UFC settles antitrust suit with fighters for $335M

ASSOCIATED PRESS
                                Sean O’Malley, left, and Marlon Vera face off during a news conference, March 7, in Miami for UFC 299 mixed martial arts event. The parent company of the Ultimate Fighting Championship has agreed to a $335 million settlement with a group of mixed martial artists whose antitrust lawsuit accused the organization of abusing its market position to suppress fighter pay, the company, TKO Group, disclosed today.
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ASSOCIATED PRESS

Sean O’Malley, left, and Marlon Vera face off during a news conference, March 7, in Miami for UFC 299 mixed martial arts event. The parent company of the Ultimate Fighting Championship has agreed to a $335 million settlement with a group of mixed martial artists whose antitrust lawsuit accused the organization of abusing its market position to suppress fighter pay, the company, TKO Group, disclosed today.

The parent company of the Ultimate Fighting Championship has agreed to a $335 million settlement with a group of mixed martial artists whose antitrust lawsuit accused the organization of abusing its market position to suppress fighter pay, the company, TKO Group, disclosed today.

The settlement avoids a costly trial, which was set to start in a month. For the UFC, it also eliminates the risk that a judge could have imposed remedies that might have upended the industry’s business model. In addition to monetary damages, the fighters had sought changes such as a ban on long-term contracts, which would have given them more power and could have made it easier for potential challengers to the UFC to arise.

Full details of the settlement, which requires court approval, have not yet been filed. TKO Group, which admitted no wrongdoing, said in a regulatory filing that it expected the settlement, which was agreed to last week, to be tax deductible. The settlement also includes a similar 2021 lawsuit against the UFC.

In a statement, a UFC spokesperson said, “We’re pleased to have reached an agreement to settle all claims,” adding that it would benefit “all parties.”

Eric Cramer, a lawyer for the fighters, said the “plaintiffs are pleased with the result and look forward to presenting the full settlement and all of its terms to the court for approval in the coming weeks.”

If the UFC had lost the suit, it’s possible that it could have been forced to pay the fighters almost $5 billion. At an evidentiary hearing in 2018, one expert for the plaintiffs said fighters had been deprived of $1.6 billion in pay, and in antitrust cases damages are tripled.

The class-action lawsuit accused the UFC of abusing its authority as a monopsony — an exclusive buyer of services, in this case mixed martial arts fighters — by locking its fighters into long-term contracts and paying them a smaller share of revenue than other professional sports leagues pay their athletes.

Cung Le and a handful of other former UFC fighters filed the original suit in 2014 against the UFC’s parent company at the time, Zuffa. It and five related lawsuits that followed were consolidated into a single action in 2015. Endeavor bought Zuffa in 2016 and seven years later combined the UFC with another purchase, World Wrestling Entertainment, to form TKO.

Shares of TKO jumped 7% after news of the settlement. Shares of Endeavor, which owns a controlling stake in TKO, rose about 2%.

This article originally appeared in The New York Times.

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