Originally published at Lawyer Erik Magraken explains what’s next after UFC’s antitrust settlement agreement
When news broke Wednesday that UFC agreed to pay nine figures to avoid facing two different antitrust lawsuits, some might have considered the story about the top MMA promotion’s class action legal battles over. However, there’s still a lot that hasn’t been revealed or simply hasn’t happened yet.
Canadian lawyer Erik Magraken recently outlined the main takeaways he has after UFC agreed to pay $335 million in settlement fees to escape antitrust lawsuits.
The settlement deals with two different cases: The first, “Le v. Zuffa,” was a certified class action case covering 1,200 fighters from 2010 to 2017, and was scheduled for trial next month. Another case, “Johnson v. Zuffa,” which looked to represent fighters from a more modern era, was in its early stages and was still far from a trial date when the settlement was reached.
Both cases deal with the UFC allegedly manipulating the MMA market to underpay fighters. “Le v. Zuffa” was seeking up to $1.6 billion in damages.
While a settlement was reached by both parties, Magraken wanted to remind people that “this settlement isn’t set in stone.” Before the agreement is truly finalized, Nevada District Judge Richard Boulware must agree to the details of it.
“To oversimply it, what the court’s looking for is if it’s an adequate settlement,” Magraken said when he joined Pollock & Thurston this week. “So, whether this money and whatever else has been agreed to adequately represents the interests of the 1,200 fighters in the Le class action.”
All that is publicly known currently is the financial details behind the settlement, as it was announced in a Securities and Exchange Commission (SEC) filing from TKO Group Holdings. A strictly financial outcome from the settlement might surprise or frustrate some, as the idea of a larger structural change to how UFC operates was something that many hoped would emerge from the case.
On the site representing fighters in the “Le v. Zuffa” class action case, it is mentioned that: “Another goal is to force the UFC to change the way it does business.” Magraken stressed that while we know the financial details, there could be other stipulations attached to the settlement that we aren’t aware of yet.
“What I want to know is, is there anything else to it?” he said. “The fighters behind this antitrust lawsuit for years have been talking about structural change and somehow correcting the market imbalance that UFC has over fighters. And I don’t know if UFC is simply paying money or they are going to agree to certain contractual changes in terms of how they do business.”
If the upcoming settlement is approved by Judge Boulware, it may be the end of an era for lawsuits against the UFC. As detailed by Bloody Elbow last year, current UFC contracts block a signing fighter from joining class action lawsuits in the future.
Because of this waiver in the contracts, current fighters might not be able to sue in class action form in the future. This means that the type of class action cases that developed in recent years might not be seen again. A fighter is still able to go after the UFC with antitrust claims, although the power-in-numbers style of a class action case is unavailable to them.
“If this gets approved and if there’s no injunctive relief or if there’s no contractual changes, the UFC have gone back in time to 2010 and cleaned up potentially any wrongdoing on an antitrust front,” Magraken explained. “And moving forward, where fighters can’t participate in class actions, it becomes much more unlikely that someone files an individual antitrust claim.”
Magraken mentioned that a powerful voice against the UFC for antitrust claims could be competitor brands, like the PFL. Even if fighters are unavailable to come after the UFC, promoters have potentially had the chance to make an argument.
“They could launch their own antitrust case against the UFC and say ‘Hey you guys are the big fish in this pond. You’re subject to antitrust scrutiny. All this stuff that the fighters complained about, it’s hurting me. I can’t compete against you because you got the champion, guy who’s ranked one, two, three, four, five, seven, nine, 10, 11 in this weight class lined up under these long-term exclusive contracts, I can’t bid for their services. You guys are harming competition through all these anti-competitive practices.’ I’m just really curious, with all the money that’s flowing around in the MMA competition world right now, if these promoters are going to take a kick at it.”
There is still a lot to discover about the recent UFC settlement. However, some have already made massive decisions based off the little they know. The stock market responded resoundingly on Wednesday, pumping the price of TKO shares up by 7 percent. Magraken understood the rationale behind the reaction that investors made, although he warned that “I also think it’s early to make that judgment.”