TKO Group, the parent company of the Ultimate Fighting Championship (UFC) mixed martial arts (MMA) promotion, will pay out $335 million to settle two class-action antitrust lawsuits filed by former UFC fighters.
The move allows TKO to avoid a trial for the lawsuits that sought up to $1.6 billion in damages. A trial expected to last four weeks was scheduled to start on April 15.
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The cases were brought against Zuffa, the previous entity that owned and operated UFC, with five related class-action lawsuits filed between December 2014 and March 2015, which were consolidated into a single action in June 2015. An additional lawsuit was filed in 2021.
The lawsuits alleged Zuffa violated antitrust laws by paying UFC fighters significantly less than they were entitled to receive and maintaining a monopoly over the MMA market.
UFC fighters Cung Le, Nate Quarry, and Jon Fitch filed their initial complaint against Zuffa in federal court in California in December 2014. It was subsequently joined by fighters Brandon Vera, Luis Javier Vazquez, and Kyle Kingsbury.
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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 anti-competitive action.
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By GlobalDataIn total, more than 1,200 fighters were represented by the lawsuits.
Earlier this month (March 13), TKO reached an agreement to settle all claims asserted in both class action lawsuits for a total of $335 million payable in installments over a period of time, the company disclosed in an SEC filing on Wednesday (March 20).
TKO said: “The terms will be memorialized in a long-form agreement and then submitted to the court for approval.”
The company anticipates the settlement amount will be deductible for tax purposes.
Notably, TKO’s stock was up more than 7% on Wednesday, trading at nearly $87 per share.
In a separate statement, UFC said: “We are pleased to have reached an agreement to settle all claims asserted in both the Le and Johnson class action lawsuits, bringing litigation to a close and benefiting all parties. The final terms of the settlement will be submitted to the court for approval.”
TKO was formed out of the merger between UFC and the World Wrestling Entertainment (WWE) promotions last year, led by international entertainment and sports giant Endeavor.
In another antitrust lawsuit, WWE in December settled a lawsuit brought by a rival accusing it of monopolizing the professional wrestling media market. It disclosed in a February securities filing that it paid $20 million to resolve the suit.
