The antitrust fight for better pay and more free rein, pitting Cung Le and five other former UFC fighters against the MMA league, entered a new phase last Thursday when US District Judge Richard Boulware issued a lengthy order who partially upheld her case as a class action.
lev zuffa has a tremendous impact on the UFC and its fighters, and the future of MMA, and Boulware’s recent statement, totaling more than 31,000 words, reflects the magnitude of the issues at hand. In 2020, Boulware announced that he would do exactly what he did last week, granting the fighters’ request to certify a “fighting class” that includes participants in one or more UFC fights starting December in took place or were transmitted in the USA. June 16, 2010 to June 30, 2017. This class included over 1,200 individuals, the judge wrote.
UFC challenged the certification for a number of reasons, including because more prominent and successful fighters had greater bargaining power and therefore should not be grouped with the six plaintiffs. UFC also argued that ex-fighters and current fighters have different goals, with ex-fighters being most interested in maximizing monetary damage while current fighters likely have a greater interest in changing the rules.
Boulware disagreed, concluding that the claims for the six fighters represented by Joseph Saveri and other antitrust attorneys need only be “reasonably congruent” and not “substantially identical” to other fighters. He also wrote that both former and current fighters share the overarching goal of receiving more compensation.
The certification means that fighters who fought during the training period are entitled to a portion of the damages should the plaintiffs prevail. You would also be entitled to any proceeds from any settlement.
On the other hand, Boulware denied the fighters’ request for certification of an “identity class” that would have included fighters whose identities, at least in part, the fighters say, have been unlawfully used in video games and other licensed merchandise and promotional materials. because the awareness of the fighters “differs significantly”.
At the heart of the case are fighters’ claims that the UFC operates as a monopsony, which is tantamount to a monopoly except that instead of selling any product or service — think Microsoft and computer operating systems — a monopsony is a monopsony buyer of services.
Like other MMA promotions, UFC is all about “buying” the services of professional MMA fighters. These fighters argue that UFC has too much control over purchasing these services and uses anti-competitive practices to pay fighters less and hinder competing MMA promotions.
This is the same core issue that prompted LIV Golf and 11 of its golfers to file an antitrust lawsuit against the PGA Tour, accusing them of monopsony in the market for services to elite professional golfers. In a preliminary hearing last year, a federal judge expressed skepticism about that claim. The case was settled in June, and the PGA Tour and LIV are now negotiating a deal that would make them business partners.
UFC fighters, like pro golfers, are independent contractors; How much each earns reflects individual success and fame. Unlike players in the NFL, NBA, WNBA, MLB, and NHL, UFC fighters have not formed a union and therefore do not collectively negotiate economic rules, such as a fixed share of league earnings. This has legal implications: Rules in a CBA relating to wages, hours and other conditions are generally exempt from antitrust scrutiny because they reflect worker and management give-and-take and consensus building.
UFC fighters sign two contracts, an endorsement and ancillary rights contract and a fight contract. These agreements stipulate that fighters must fight to receive compensation and that victors are paid more.
The agreements also contain clauses restricting competition. For example, a disclaimer requires a UFC fighter to fight for the UFC and not for rival MMA leagues. A right-to-match clause allows UFC to perform a contract with a competitor, an exclusive negotiation clause gives UFC a 30- to 90-day window to negotiate exclusively, and a champion clause authorizes UFC to execute the contract of a fighter if he or she becomes titular champion.
Boulware criticized these provisions, writing that they “restrict fighters’ ability to control their careers and remuneration”. The judge seemed particularly concerned that regulations prevent some fighters from becoming “free agents” up to 15 months after their last fight.
The judge also portrayed UFC as head and shoulders above other MMA promoters. He wrote that “with the exception of Bellator and Strikeforce,” other MMA options for fighters tend to be “small regional clubs” that “identify themselves as smaller look at leagues”. These smaller promotions sometimes even offer “UFC-Out” clauses, allowing a fighter to leave and join the UFC.
Even Bellator and Strikeforce are not on the same level as UFC, according to Boulware, although they are also competing for TV airtime, sponsorship deals and media attention. According to plaintiffs, Bellator, Strikeforce and World Series of Fighting together generate less than 10% of total revenue from live MMA fighting events and related products sold to customers including viewers, cable networks, broadcast networks and sponsors.
UFC denies the fighters’ claims in a number of ways.
Most importantly, UFC argues that its success reflects the merit of offering fans and fighters a superior product than other MMA promotions. UFC presents its fighters’ contracts as sound business arrangements that have made MMA more commercially successful, including for fighters.
The UFC has noted that total fighter compensation has increased by over 600% since 2005, pays fighters far more than other MMA organizations, and provides fighters with world-class training facilities and trainers. UFC further emphasizes that while players in the NBA, NFL, MLB and NHL have negotiated 48% of the 50% split of their league earnings, those amounts are borne by the give and take of collective bargaining. There is no law guaranteeing employees a certain percentage of their employer’s income in the absence of a collective bargaining agreement or other agreement.
Boulware was not convinced by these points. He believed there was a “lack of evidence” that UFC policies “contributed to the development of MMA.” The judge criticized the UFC for what he says is using its bargaining power to pressure fighters to accept less generous economic deals than they would negotiate in a more competitive market.
In a statement shared by UFC, William A. Isaacson, UFC’s lead attorney and partner of Paul Weiss, said:
“We have anticipated this decision and, as we previously informed Judge Boulware, plan to appeal. This is just one step in a long court proceeding, and we are confident that the court will ultimately recognize that the claims set forth in this lawsuit are unfounded in law and in fact. The continued growth of the UFC, coupled with the growth of other established MMA promoters and the proliferation of successful new entrants, demonstrates the existence of a healthy and competitive MMA market that benefits athletes, promoters and fans alike.”
The case began in 2014 and could remain in federal court for several years, with likely appeals.