Introduction – Legal Confrontation At Hand.
Over the last six years, a quiet legal storm has been brewing against the UFC. Several former UFC fighters, including Cung Le, Kyle Kingsbury, Jon Fitch and Nathan Quarry are all part of a massive class action anti-trust lawsuit against Zuffa LLC, the parent company of the UFC. The aforementioned fighters, alongside literally hundreds of other plaintiffs, are claiming that the UFC vastly underpaid them whilst fighting under the UFC banner, whilst also claiming that the UFC eroded any meaningful possibility of advancing their careers elsewhere. So where did this all come from, and what is the potential fallout from such a legal collision?
Context – Where Has This All Come From?
Essentially, a lot of this class action lawsuit has the right to freedom as its epicentre. In Football (European), we have the Bosman ruling, a 1995 judgement from the European Union that allowed players to participate in freedom of movement for workers’ rights when their contracts expired at their respective clubs – prior to this ruling, a club could keep hold of a player even if their contract had already expired. In the world of Boxing, the Muhammad Ali Reform Act  was legislated for by the United States Congress in order to prevent boxers from being tied up in coercive and unfair contracts – in other words, being outright exploited.
The lawsuit brought forward by the plaintiffs claims, at its core, that the UFC acts as an illegal monopoly by leveraging their dominance of their market power against their fighters by forcing them to sign exclusive contracts and holding down their pay. Brandon Ross, an analyst at LightShed Partners, estimates that the UFC’s media rights and sponsorship obligations were worth around $750 million for 2020. Generally, the UFC’s roughly 600 fighters get around 20% of that market share combined.
Zuffa and the UFC Firmly on the Defensive
The UFC have been very feisty in response to this class-action lawsuit, claiming that they are the best Mixed Martial Arts (MMA) promotion in the world, and this case, according to their attorney William Isaacson, threatens the ability of “all companies…to grow and succeed.” The plaintiffs have countered this, arguing that the UFC is an extremely difficult place to leave, and that there is no alternative competition to join. Former UFC and Strikeforce middleweight Cung Le said “There’s no other option…they basically own you.”
One person who provides some very interesting perspective on this whole issue is Bloomberg News’ Josh Eidelson. In his article, “UFC Wants You to Watch Brawls, Not Its $5 Billion Lawsuit,” Eidelson notes that:
“[UFC] Its contracts could…let the UFC profit from their [the fighters’] likeness in video games and trading cards without going back for permission.” Fighters under the UFC banner also bear the costs of training camps, medical equipment, etc. because “they were classified as independent contractors, like Uber drivers.” There are a lot of legal contradictions here. UFC fighters, as shown above, have been classified as independent contractors, yet the length/number of fights on their contracts is very extensive (sometimes 2 or more years long). Not only is there this glaring contradiction, but the fighters, as Eidelson points out, “[had to] agree not to work for competitors.” It would certainly appear to me that these former UFC fighters were dealt all of the negatives of being an independent contractor and received none of the benefits, hence why this class-action lawsuit has clearly been granted such status.
Zuffa’s Counterpunch to the Claims
Things don’t get any better looking from Zuffa’s perspective either. In 2011, following the successful acquisition of Strikeforce, former matchmaker Joe Silva wrote an internal email to UFC President Dana White with the subject “We Own MMA.” As if this wasn’t bad enough, the UFC have long been at the centre of controversy over sponsorship issues. The Reebok deal was universally hated by nearly every single fighter, and the deal was panned by fans and experts alike.
Dana attempted to defend all of this in 2013. When he was talking to MBA students at Stanford University, White directly attacked the boxing model that so many point to in contrast with the MMA pay model. White was quoted as saying that in boxing, “You get two multimillionaires right, who step into the ring and do everything they can to avoid a fight. We incentivize guys to fight.”
Whilst Dana’s point is certainly not invalid, it is hard to see it as a defence to the issues at hand. However, they have mounted a pretty fiery comeback of their own. In one deposition, Zuffa company witness Paul Oyer, an economist at Stanford University, testified that if fighters themselves were the commodity at the core of the issue, then they would “start their own businesses.” He also directly said that “They’re no more the product than Apple’s engineer who designs an iPhone.”
Just How Important Could This Lawsuit Become?
What must then be considered is the utter significance of this litigation. Marshall Steinbaum, an economics professor at the University of Utah is of the view that “If we’re going to see one big labour anti-trust showdown, this is a good place to look for it…This case essentially aims a pretty sharp spear at the heart of contemporary anti-trust law.” This case is bound to have absolutely cataclysmic implications regardless of where the judgement ultimately falls. If it falls for Zuffa, then it’s a validation of the current system. However, if the plaintiffs win, then, like Nate Diaz after his win against Conor McGregor at UFC 196, it might truly just shake up the world of combat sports.