UFC announced Thursday that it has reached a revised settlement agreement with fighters in the Le antitrust lawsuit.
Now comes the hard part: The parties need U.S. District Judge Richard Boulware to grant preliminary approval.
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In July, the Nevada-based judge denied preliminary approval of a $335 million settlement that would have paid fighters in the Le case, on average, $200,000, with 36 fighters set to take home more than $1 million. Le, along with a separate case, Johnson, argues that UFC violated antitrust law by allegedly functioning as a monopsony in the MMA industry (a monopsony is like a monopoly but involves a buyer of services, here UFC buying MMA fighters’ services), restraining UFC fighter pay. UFC fully denies those allegations and the settlement does not change that denial.
During hearings Boulware signaled he felt UFC, which if it lost both Le and Johnson could have been ordered to pay billions of dollars in damages, should pay more. He also implied the two lawsuits shouldn’t be resolved together. Le involves fighters who were in one or more UFC bouts that took place, or were broadcast, in the U.S. from Dec. 16, 2010, to June 30, 2017, while Johnson represents those who fought in UFC bouts from July 1, 2017, to the present. The facts are different in Johnson in several ways, including because their claims are weaker and because of the presence of arbitration and class-action waiver clauses.
The revised settlement ups the amount to be paid to the fighters in Le to $375 million, which will be payable in installments “over an agreed-upon period of time.” Details and specifics on the settlement, including how it might alter fighters’ contracts, will be contained in a long-form agreement that will be filed to the court on a later date. UFC says its parent company, TKO Group Holdings, “anticipates that the settlement will be deductible for tax purposes.”
UFC says it believes the revised deal addresses Boulware’s concerns. The company adds that both sides, including the plaintiffs, felt their original settlement was “fair,” but UFC also believes “it is in the best interest of all parties to bring this litigation to a close.”
As part of Thursday’s announcement, TKO—a publicly traded company—filed an SEC 8-K form reiterating the history of the litigation and the settlement proceedings.
There’s no guarantee Boulware will grant preliminary approval. If he isn’t satisfied, he could issue another denial.
However, as Sportico explained, it is rare for a judge to deny preliminary approval of an antitrust class action, especially since doing so prevents the beneficiaries (here the fighters) from a chance to weigh in. The judge granting preliminary approval would be followed by notification to the fighters about the settlement terms. There would be opportunities for them to opt out and/or object at a fairness hearing if they wish. Whether Boulware would grant final approval is a separate matter.
If the settlement collapses, Le would return to the docket. UFC would be armed with a number of defenses. The cases, particularly Johnson, which is in an early stage and could separately settle, would likely also take several years to play out given that there would be multiple layers of appeal. Both sides would have a lot at risk. A win for the fighters would likely mean the UFC pays them more money, but a loss would mean those fighters end up with nothing.
(An earlier version of this story incorrectly said the Johnson case was part of the settlement. It now clarifies the settlement is for Le only.)
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