By Jess A. Contreras & Michael S. Carroll, PhD
In 2015, MMA fighters Cung Le, Nathan Quarry, Jon Fitch, Brandon Vera, Luis Javier Vasquez, and Kyle Kingsbury (collectively the Plaintiffs) filed a lawsuit on behalf of themselves and other MMA fighters according to Rule 23 of Federal Rules of Civil Procedure against Defendant Zuffa, LLC, which is known as the “UFC” (Le v. Zuffa, LLC, 2018). Le v. Zuffa, LLC includes the previously named Plaintiffs plus UFC fighters who fought for Defendant from December 16, 2010 to June 30, 2017. Since the close-out period was June 30, 2017, former UFC fighters Kajan Johnson and Clarence Dollaway filed a similar lawsuit (Johnson v. Zuffa, LLC, 2021) to Le v. Zuffa, LLC in 2021. Johnson v. Zuffa, LLC included Johnson, Dollaway, and UFC fighters who competed in the UFC from July 1, 2017 until the recent settlement in 2024.
Both lawsuits were filed as a civil antitrust action under Section 2 of the Sherman Act, 15 U.S.C. § 2, for the damages and other relief out of Defendant’s ability to monopolize its power to promote MMA fighter bouts and MMA fighters services (Johnson v. Zuffa, LLC, 2021 Le v. Zuffa, LLC, 2018). Both cases alleged that the UFC utilized its power to prevent the fighters from fighting in rival MMA promotions during and after their career in the UFC. The UFC also exploited and expropriated its fighters’ identities through UFC-licensed merchandise and/or UFC promotional material (Le v. Zuffa, LLC, 2018).
MONOPOLY POWER
A monopoly in business is defined as limited competition in a market with few to no product substitutes (Hayes, 2024). In Le v. Zuffa, LLC, it is alleged that the UFC built and maintained its monopoly power in the Relevant Input Market through exclusionary tactics, including purchasing actual or potential MMA rival companies. Additionally, the UFC controlled the MMA fighter market by signing all the top MMA fighters, preventing any rival MMA company from signing the top fighters. The UFC had exclusive deals with physical venues and MMA sponsorships that only allowed those venues and sponsors to work with the UFC. If the venue or company did not agree to the exclusive terms to work strictly with the UFC, the company did not use its services. Through these alleged schemes by the UFC, the company had the best fighters, the most prominent sponsors, and key physical and television venues (Le v. Zuffa, LLC, 2018).
MONOPSONY POWER
A monopsony is a single buyer who controls the market and drives consumption prices up (Young, 2023). The UFC allegedly had monopsony power in the market for the top MMA fighters in the world (Le v. Zuffa, LLC, 2018). The UFC controls the number of fights an MMA fighter will have while controlling their pay. Even if a fighter is unhappy with their contract, no alternative promotion will pay the fighter their worth, since the UFC controls the demand and compensation for the top MMA talent. With the ability to control the Relevant Input Market, the UFC can pay fighters below their market value for a set amount of time, artificially suppress the demand for the top MMA fighter’s service below their value, require fighters to sign restrictive contracts, prevent UFC fighters from working with rival promoters, utilize UFC fighter’s identities with little to no compensation, and use the UFC fighter identities in UFC Licensed Merchandise and/or Promotional Materials licensed or sold by the UFC (Le v. Zuffa, LLC, 2018).
With the UFC’s anticompetitive scheme alleged herein, the UFC has been able to maximize its profits while underpaying the fighters through the revenue generated from bouts. The case states that UFC fighters are paid 10-17% of the total UFC revenues from bouts (Le v. Zuffa, LLC, 2018). In boxing, another combat sport, boxers earn more revenue from a fight card. The comparison made in Le v. Zuffa, LLC is to boxing promoter Bob Arum, who pays his fighters 80% of the proceeds generated by the fight card (Le v. Zuffa, LLC, 2018).
With all the complaints filed against the UFC two days before the trial began (March 15, 2024), TKO Group Holdings, Inc. (UFC ownership) agreed to settle all claims in both lawsuits against UFC. The settlement amount was $335 million, which would be paid in installments over a set period (Martin, 2024). The potential damages the fighters suffered through the set timeframe are estimated to be between $894 million and $1.6 billion (Martin, 2024).
CONCLUSION
The fact that neither lawsuit went to trial is not an excellent sign of the future of UFC fighters’ pay and compensation. UFC President Dana White was asked about better pay and fighter health and responded that the organization is in an era where everyone wants to win a trophy, and not everyone wins a trophy (Guarino, 2023).
Perhaps the best solution would be for the fighters to start a fighter’s union similar to the player’s union in other professional sports. Without a union to protect fighters from the UFC, the company will continue to operate as it did before the lawsuits. Fighters have previously tried to form MMA fighter unions like the Mixed Martial Arts Athletes Association (MMAAA), Professional Fighters Association (PFA), and Mixed Martial Arts Fighters Association (MMAFA). However, none of them have been successful in uniting the fighters together. In 2018, former UFC fighter Leslie Smith started Project Spearhead, which was her attempt to unionize UFC fighters. Later that year, Smith was scheduled to fight Aspen Ladd on April 21, 2018. However, the bout was canceled due to Ladd missing weight. The UFC usually only pays a fighter who made weight their show money if their opponent misses weight and the bout is canceled. The UFC paid Smith her show and win money and would release Smith afterward. Smith was coming into the bout against Ladd on a two-fight win streak, so the sudden release from the UFC is strange. Smith stated on The Wrestling Inc. Daily podcast in 2020 that she believed her release was due to her attempt to unionize the fighters (Ounpraseuth, 2020). Smith would file charges against the UFC for being released, but the charges would eventually be dropped.
Another option could be for fighters to push Congress to adopt an MMA version of the Muhammad Ali Boxing Reform Act, or the “Ali Act.” This Act protects fighters’ rights by preventing exploitive, oppressive, and unethical boxing business practices (United States of America, 2000). The UFC was purchased in 2001 for $2 million and was sold for $4 billion in 2016. In 2024, the company is estimated to be valued at $11.3 billion (Ozanian & Teitelbaum, 2024). The company continues to increase in value, and it is up to the fighters to step out of the octagon and legally fight for their earned percentage of the revenue generated by the UFC.
References
Guarino, N. (2023, April 15). The fight for unionization in the UFC. https://ublawsportsforum.com/2023/04/15/the-fight-for-unionization-in-the-ufcHayes, A. (2024, March 2). What is a monopoly? Types, regulations, and impact on markets. Investopedia. https://www.investopedia.com/terms/m/monopoly.asp#:~:text=A%20monopoly%20is%20a%20business%20characterized%20by%20a,there%20are%20no%20similar%20substitutes%20for%20its%20product.
Johnson v. Zuffa, LLC, Case No.: 2:21-cv-01189-APG-VCF (D. Nev. 2021). Retrieved from https://www.classaction.org/media/johnson-et-al-v-zuffa-llc-et-al.pdf
Le v. Zuffa, LLC, Case No.: 2:15-cv-01045-RFB-(PAL) (D. Nev. 2018). Retrieved from https://casetext.com/case/le-v-zuffa-llc-10
Martin, D. (2024, March 20). UFC reaches a settlement to close out antitrust lawsuits; promotion agrees to pay out $335 million. Retireved from https://www.mmafighting.com/2024/3/20/24106823/ufc-reaches-settlement-to-close-out-antitrust-lawsuits-promotion-agrees-to-pay-out-335-million
Ounpraseuth, J. (2020, November 20). Leslie Smith discusses UFC cutting her while she was attempting to unionize fighters. Retrieved from https://www.wrestlinginc.com/news/2020/11/leslie-smith-discusses-ufc-cutting-her-while-she-was-677147/#:~:text=In%202018%2C%20after%20the%20UFC%20paid%20Smith%20her,her%20for%20trying%20to%20unionize%2C%20which%20is%20illegal
Ozanian, M., & Teitelbaum, J. (2024, April 18). The most valuable combat sports promotions 2024. Forbes. Retrieved from https://www.forbes.com/sites/justinteitelbaum/2024/04/18/the-most-valuable-combat-sports-promotions-2024/?sh=30fa0279abde
United States of America. (2000). H. R. 1832 (106th): Muhammad Ali Boxing Reform Act. Retrieved from https://www.govinfo.gov/content/pkg/BILLS-106hr1832enr/pdf/BILLS-106hr1832enr.pdf
Young, J. (2023, February 20). Monopsony: Definition, causes, objections, and example. Investopedia. Retrieved from https://www.investopedia.com/terms/m/monopsony.asp#:~:text=A%20monopsony%20refers%20to%20a%20market%20dominated%20by,geographical%20constraints%2C%20government%20regulation%2C%20or%20unique%20consumer%20demands.
Jess A. Contreras is a Ph.D. student studying Sports Management at Troy University. His research interest is in combat sports, particularly the health and safety of fighters, MMA fighters’ pay, and standardized drug testing in combat sports.
Michael S. Carroll is a Full Professor of Sport Management at Troy University specializing in research related to sport law and risk management in sport and recreation. He also serves as Online Program Coordinator for Troy University and works closely with students in the TROY doctoral program.
