Rebook the match.
Four months after UFC and plaintiffs settled a long-running antitrust lawsuit against the mixed martial arts giant by paying past and current athletes $335 million, U.S. District Judge Richard Bowlwer in Las Vegas declined to tentatively approve the settlement terms late on Tuesday night.
In a surprising move during the July 12 court hearing that foreshadowed the latest developments in the Lu v. Zuffa and Johnson v. Zuffa cases, Bowler made it clear that he felt $335 million was insufficient, even though lawyers for both sides expressed satisfaction with the outcome.
The class action lawsuit, Re v. Zuffa, is scheduled for trial in Nevada on October 28, but the trial could be avoided if the two sides reach a new settlement that is likely to be approved by Bowlwer.
Boulwer did not elaborate on his reasons for rejecting the settlement, and it is unclear when a settlement might occur.
The $335 million settlement was intended to bring both lawsuits to an end, although Johnson v. Zuffa, which has not been certified as a class action, is less advanced in the case and no trial is imminent.
Eric Kramer, the plaintiffs’ lead attorney, released a statement Wednesday afternoon saying the plaintiffs “respect the court’s decision rejecting the comprehensive settlement offer in the Les and Johnson cases and will continue to move full speed ahead on all fronts in accordance with the court’s instructions.”
The statement added that while the plaintiffs prepare for trial in the Les case and discovery in the Johnson case, they “are prepared to renegotiate with UFC to explore whether the parties can reach a settlement that builds on the momentum achieved in the previous settlement, but will seek to address the concerns the Court has expressed regarding that settlement.”
A statement released by the UFC late Wednesday afternoon said, “We clearly disagree with this ruling and believe it ignores the expertise of both parties’ counsel, as well as the expertise of a seasoned, professional mediator with decades of experience in antitrust case law.”
In a statement, UFC called Bowler’s refusal an “unprecedented step” and said the judge was “also denying the fighters their right to be heard at such a critical time in this case.”
UFC said in a statement that it has “initiated discussions with plaintiffs’ counsel who have indicated they are willing to enter into separate settlement discussions for the Les and Johnson lawsuits.”
Risky Business
Le v Zuffa is likely to be a high-stakes, high-reward case for both sides, and, as a result, Johnson v Zuffa will be as well.
A jury could find the plaintiffs deserve more than $1 billion in settlement money and injunctions, which could change UFC’s contracts and the promotion’s business model, but the plaintiffs may not even receive a nine-figure settlement.
Fighters under contract with UFC are considered independent contractors, not employees of UFC, and are only obligated to accept fights with UFC and may be subject to contractual clauses that allow them to extend their contracts if they win a UFC championship or turn down an offered fight.
Both lawsuits allege that while UFC has grown into a multi-billion dollar organization, it has used monopoly and exclusive buying strategies to create an unfair environment that limited fighters’ earning potential below that of a competitive market.
UFC denies this notion, arguing that there was no coordinated effort to monopolize market share in mixed martial arts and that it is simply very good at what it does compared to other organizations such as Pride Fighting Championships and Strikeforce, which were either acquired by UFC’s then-parent company Zuffa or have since disappeared.
UFC is now owned by TKO Group Holdings, whose shares fell more than $3 at the start of trading on Wednesday to $106 before recovering to nearly the same level by the close.
The public face of UFC, CEO Dana White, frequently touts how many of its fighters have become millionaires through their work promoting UFC and their ability to make money through opportunities outside of combat sports, such as film or entrepreneurship.
A decade of digestion
Le v Zuffa’s journey to this point began in December 2014 with complaints filed by UFC veterans and former headliners Cung Le, Nate Quarry and Jon Fitch.
The lawsuit was later consolidated with other lawsuits and ultimately certified as a class action.
All of the plaintiffs in the lawsuit are athletes who competed in at least one UFC-sponsored mixed martial arts bout held or broadcast in the United States between December 16, 2010 and June 30, 2017, representing more than 1,200 athletes.
The plaintiffs are seeking both monetary damages and injunctive relief to allow the court to resolve what they claim are unfair contract and business practices by UFC.
The second lawsuit, filed by UFC veteran Kajan Johnson, was filed in 2021 and covers fighters from 2017 onwards.
In contrast to the Le case, which is largely comprised of former UFC athletes, the Johnson case focuses primarily on current athletes, with the primary goal of seeking injunctive relief rather than pursuing a monetary settlement.
The settlement, announced March 20 and mediated by former U.S. District Court Judge Lane Phillips of the Western District of Oklahoma, avoids a trial in Les v. Zuffa that would have begun the week after the landmark UFC 300 event in April, and appears to have brought the Johnson v. Zuffa case to an early conclusion before it even entered discovery.
Boulwer’s refusal to settle after hinting at such a possibility earlier this month was highly unexpected, especially at this preliminary stage. Lawyers on both sides of the lawsuit had reportedly already hinted at the possibility of a settlement. Added details of the settlement to his online profile.
At a July 12 status conference, Boulwer expressed explicit reservations about approving the settlement, but lawyers for both sides pleaded with the judge to accept it.
Plaintiffs’ lawyers pointed to a breakdown of the payments to the fighters, excluding attorneys’ fees, and argued for Bowlwer to move the tentative settlement to the next stage.
“Mr. Lee’s net recovery is approximately $200 million. The median recovery is $73,000 and the average recovery is $200,000. There are 36 individuals who have received $1 million. There are 500 individuals who have received more than $100,000,” the lawyer said, according to court records. “By any standard, this is an incredible result.”
Instead, both sides will have to wait for Boulworth’s explanation and plans for the next round.
