$375 Million UFC Antitrust Settlement Foreshadows the Era of Athlete Empowerment: 2 Key Takeaways for the Sports Industry | Fisher Phillips

One of two class-action antitrust lawsuits involving the Ultimate Fighting Championship (UFC) may be coming to an end after a federal court judge preliminarily approved a settlement agreement between the fight organization and more than 1,000 fighters. This agreement may have an impact on other sports leagues and professional organizations. What are the two most important things to keep in mind when looking at this case?

Quick Background

Judge Richard Boulware II of the District of Nevada gave preliminary approval to the proposed settlement on Oct. 23. Le et al. v. Zuffa, LLC This would result in the UFC paying $375 million to fighters in this class who claimed they had not been paid for fights with the company for years. This preliminary approval comes after the judge previously rejected a $335 million settlement agreement that would have resolved both class-action antitrust lawsuits against the UFC. The judge said he had concerns about the total amount paid to the fighters and the provisions regarding how the funds would be distributed to class members.

The current settlement offer, which covers fights from 2010 to 2017, came with testimony from more than 150 class members asking the court to approve the proposed settlement and explaining how the payments would improve their daily lives.

Once finalized, class members could receive payments ranging from $15,000 to $1 million.

In this case, the next steps are as follows:

• The notification process to the class will begin within 30 days from pre-approval.
• Within 90 days, class members will be allowed to object to the proposed settlement or allocation plan.
• The hearing on final approval will be held on February 6, 2025.

1. We Are in the Era of Athlete Empowerment

The first thing to keep in mind when looking at this settlement agreement is that it is a reminder that we are in an era of athlete empowerment. There is no doubt that in recent years, athletes across all sports have continued to gain power and influence within their leagues and organizations.

Each year, a growing number of players from various professional sports leagues sit out training camps, preseason practices, and even regular season games due to frustrations with their current contract situations. Many are looking for new contracts with a larger portion of guaranteed money.

In university sports, the House v. NCAA residential The NCAA will soon be able to dole out nearly $2.78 billion to a class of current and former college athletes who were unable to profit from their names, images and likenesses between 2016 and 2021 before adopting the interim NIL policy. There are also other lawsuits and employment hearings debating whether college athletes should be classified as employees under various legal standards.

It is important to recognize the power that athletes currently have and will continue to accumulate, and this is a trend that is likely to increase in the coming years.

2. Could This Lead to Collective Bargaining in the UFC?

Nearly every major American professional sports league engages in collective bargaining with its respective players association or union. Specifically, most collective bargaining agreements in sports cover standards for players’ conduct, revenue sharing between teams and players, salary caps and salary structures, free agency, injury claims, health benefits, and safety standards. These agreements are negotiated every few years between team owners and the players’ association.

Currently, UFC fighters do not engage in collective bargaining with the organization. All fighters are considered independent contractors and therefore do not have the same rights and protections as other professional athletes.

While the proposed settlement agreement does not include language stating that the UFC would be required to collectively bargain with its fighters going forward, it is an issue that has attracted some attention given the popularity of the sport.

It’s worth noting that the UFC’s current broadcast deal with ESPN expires in 2025. The UFC’s current deal is worth $1.5 billion over five years. This is important because the fighters could negotiate a portion of the TV deal if the UFC collectively bargains with them.

A final hearing on the proposed settlement is still more than five months away, but this agreement could continue to advance the era of athlete empowerment and lead to collective bargaining in sports.