Winners and Losers of UFC’s $335 Million Class Action Settlement

The UFC’s antitrust lawsuit is over, and shareholders are happy. That was the big news on Wednesday, as the UFC’s parent company — TKO Group Holdings — filed a disclosure with the Securities and Exchange Commission revealing that the company has settled two separate class-action lawsuits for a total payout of $335 million.

Within 20 minutes, TKO’s stock price had risen by more than 5% and was up 7.84% by market close. Clearly, investors are happy to see these lawsuits, with potential damages estimated at as much as $1.6 billion, end.

But what does all this mean for the UFC, the fighters, and the sport of MMA? We’ll have to wait until more dust settles to get a full picture. While we know the dollar amount of the settlement, we don’t yet know how it will be divided among the fighters involved or what other provisions the settlement might include.

John Nash, who has covered these antitrust cases extensively on his Substack and the “Hey Not The Face!” podcast, said he expects some changes to the standard UFC contracts to be included as part of the settlement.

“If I had to guess, I would say any changes would probably be similar to what they were for the 2017 (UFC) contracts,” Nash told Yahoo Sports. “That could create a timeline and maybe something like a five-year cap on the (fighter) contracts.”

Those changes helped make it possible for then-UFC heavyweight champion Francis Ngannou to see out his UFC contract and become a free agent. He has since made large sums of money as a pro boxer, far exceeding what Ngannou said he made as UFC champion, and it likely wouldn’t have been possible without those brief but significant contractual changes.

That could be a positive change for fighters, but it’s far from the total reorientation of the sport that some fighters in the lawsuit called for. And while it likely means six-figure payouts for many of those fighters, it also surprised many people that fighters were willing to accept a settlement rather than push for their day in court.

Nash, however, wasn’t all that surprised.

“I think a lot of people got excited about the possibility of a lawsuit here, but the reality is that’s too risky a possibility for both sides,” Nash said. “People got obsessed with the number, the $800 million to $1.6 billion (which would be tripled under U.S. antitrust law), but that’s why I said (the UFC) should probably settle, because the risk is so incredible.”

For the fighters, there was also considerable risk. If they went to court and lost, they would get nothing. Even if they did pull off a big win, it would be years before they saw any money for it. Many of the fighters who played a major role in bringing these lawsuits had lofty goals at first, but now seem to have decided that the money in hand outweighed some of those broader aspirations.

Former UFC middleweight Nate Quarry, who was a vocal member of the group of fighters in this class action, wrote on Reddit that the settlement appeared to be “the best option” available at this time.

One loser in the settlement may be the competing MMA organizations that were hoping to level the playing field. If a court had ruled that the UFC was using anti-competitive practices to gain monopsony power in the sport, the resulting fallout would likely have created an easier environment for promoting events outside of the UFC. Instead, the status quo will likely be largely upheld, preserving the UFC’s position as the undisputed giant of MMA.

But there’s also a chance that fans and media alike got a bit of a pass on this one, too. Much of what we know about the inner workings of the UFC business comes from two sources: the UFC’s 2016 sale to Endeavor and documents that circulated among potential investors, and the statements and documents released as part of the early stages of those antitrust lawsuits.

If those lawsuits had gone to trial, we likely would have learned even more about how the UFC operates, how it views and treats its fighters, and how it has managed to stay so far ahead of potential competitors. Instead, the settlement slams that door shut. After all, some secrets are kept in the black box.

There’s also the question of where this leaves the hope for lasting change. In 2015, when I first spoke with Rob Maysey, an attorney who played a key role in filing the antitrust lawsuit, he laid out a plan to use antitrust action to force the UFC to negotiate with a fighters’ union. Maysey actually helped found such a union — the Mixed Martial Arts Fighters Association — though it was largely an ambitious organization that had no collective bargaining power with the UFC.

Just as the NFL players only got their own union and the collective bargaining power that comes with it through a laborious legal process, Maysey said, this was the fighters’ best hope for a union that the UFC would have to legally recognize and negotiate with. But what happens to that hope now that the fighters have agreed to a settlement and some guaranteed money in return?

Maysey did not respond to a request for comment, but the MMAFA account posted a message on social media saying it was “pleased with the settlement and will announce more when we file a case in court in 45-60 days.”

While the UFC may be a few hundred million dollars lighter in its wallet by then, it seems likely it will still have the same firm grip on the sport that now earns the company more than $1 billion a year – and counting.