UFC’s USD4 billion sale is fodder for fighters’ antitrust suit

When it comes to divvying up profits from their sport, some mixed martial arts fighters say they’re getting clobbered. But now, several fighters suing for a bigger share of the purse say the USD4 billion sale of Ultimate Fighting Championship may give them some punch.
A pair of retired fighters and one now affiliated with a rival league accuse the premier promoter, known as UFC, of swallowing up competitors to monopolize the sport and suppress compensation for athletes, who receive a smaller chunk of revenues than competitors in other professional sports. They seek class-action status to represent potentially thousands of fighters and to boost any award they win in court, which would be tripled under U.S. antitrust law.
“They made a lot of money off the broken bodies of a lot of people,” said Jon Fitch, a plaintiff and one-time contender for UFC’s welterweight championship, in a phone interview. “It’s pretty obvious that it’s going to be very difficult for anyone to deny the unfavorable pay and treatment we’ve received.”
Fitch, who went 13-3-1 during eight years with the league, said UFC’s robust growth will help the fighters prove they’ve been shortchanged by Zuffa LLC, Las Vegas-based owner of UFC that’s been controlled by billionaire brothers Lorenzo and Frank Fertitta III for the last 15 years. The Fertittas purchased UFC in 2001 for $2 million.
Buoyed by celebrity fighters such as Ronda Rousey and Conor McGregor, UFC now stages sold-out events in arenas around the world and reaches a pay-per-view audience that rivals that of boxing’s biggest fights. UFC controls about 90 percent of the revenue from professional mixed martial arts bouts, while holding fighters’ share of that pot below 20 percent, according to the complaint. Contracts require them to sign away marketing and image rights, Fitch said.
On Monday, a group led by Hollywood talent agency WME-­IMG and Michael Dell’s investment firm announced that it had purchased UFC. When Fitch filed his lawsuit less than two years ago, his lawyers valued UFC at half as much as the $4 billion sale price.
A spokeswoman for UFC referred calls to their attorneys. “There will be new shareholders for the company, and the company remains the defendant,” said William Isaacson, a Washington-based attorney for Zuffa LLC. “Nothing really changes for the purpose of litigation.” A spokeswoman for WME-IMG declined to comment, citing the pending closure of the sale.
Fitch and his fellow plaintiffs accuse UFC of anti-competitive conduct to “illegally acquire and maintain its dominant position in the market.” After UFC’s acquisition of three smaller promotion companies in November 2008, Zuffa President Dana White uploaded a video on YouTube in which he held a mock tombstone inscribed with “RIP” and the logos of the three promoters, according to the complaint.
In its defense, Zuffa has argued that UFC has no obligation to treat competitors fairly, and that the plaintiffs failed to show anti-competitive dealings. A federal judge in Las Vegas in September rejected the company’s move to dismiss the case, which was transferred to Nevada after it was originally filed in San Jose, California.
McGregor was recently dropped from UFC 200, the sport’s biggest event ever, because he refused to do all the promotional appearances demanded by UFC. His explanation: “I’m paid to fight, not to promote.”
When the sale was announced, McGregor applauded the Fertitta brothers in a Twitter posting.
“To have been mentored by these great people on this great business is a true honour!” said McGregor, who isn’t a plaintiff in the lawsuit.
Unlike UFC, the top four team sports in the U.S. share their profit with players almost evenly. National Football League players get a 47 percent cut, with team owners getting the other 53 percent, according to their latest union pact. Major League Baseball’s revenue sharing with players ranges from 43 to 50 percent; the National Basketball League shares 49 to 51 percent with players.
UFC doesn’t have franchises like the New York Yankees or independent promoters like boxing world legend Don King, whose wealth and recognition can raise the market value of athletes. According to the Nevada Athletic Commission, the state’s 35 top-grossing boxing matches during the past two decades were split among 10 promoters. In contrast, the 35 all-time biggest mixed martial arts bouts in Nevada as measured by ticket sales had the same promoter, Zuffa. Kartikay Mehrotra, Eben Novy-Williams, Bloomberg