Winners and losers of the UFC's $335M class action settlement

The antitrust lawsuit against the UFC is over and the shareholders are happy. That was the big news Wednesday, as the UFC’s parent company — TKO Group Holdings — filed a disclosure with the Securities and Exchange Commission revealing that the company has settled two separate class action lawsuits with a total payout of $335 million.

Within 20 minutes, the TKO stock price had jumped more than 5% and was up 7.84% at market close. Clearly, investors are happy to see these lawsuits, with estimated potential damages set as high as $1.6 billion, get put to rest.

But what does it all mean for the UFC, the fighters, and the sport of MMA? To get a full picture of that, we’ll have to wait for still more dust to settle. While we know the dollar amount of the settlement, we don’t know yet how it will be apportioned among the fighters involved or what other provisions might be included in the settlement.

John Nash, who’s covered these antitrust cases extensively on his Substack and “Hey Not The Face!” podcast, said he expects there to be some changes to standard UFC contracts included as part of the settlement.

“If I had to guess, I’d say any changes would probably be similar to what they were for the 2017 [UFC] contracts,” Nash told Yahoo Sports. “That could put a timeline and maybe something like a five-year maximum on the [fighter] contracts.”

Those changes helped make it possible for then-UFC heavyweight champion Francis Ngannou to wait out his UFC contract and become a free agent. He’s since secured big paydays as a pro boxer that were far in excess of what Ngannou has said he earned as a UFC champion, and it likely wouldn’t have been possible without those brief but consequential contractual changes.

That could be a positive change for fighters, but it’s far from the total realignment of the sport that some fighters in the lawsuit class had called for. And while it likely means six-figure payouts for many of those fighters, it also surprised many people that fighters would be willing to accept a settlement rather than insisting on their day in court.

Nash, however, wasn’t quite so surprised.

“I think a lot of people got enamored by the possibility of a trial here, but the reality is that that’s too risky a possibility for either party,” Nash said. “People got obsessed over the number, the $800 million to $1.6 billion [which would then be tripled under U.S. antitrust law], but that’s why I said [the UFC] would probably have to settle because the risk is so incredible.”

For the fighters, there was considerable risk as well. If they went to trial and lost, they’d get nothing. Even if they did win a major victory, it might be years before they saw any of the money from it. Many of the fighters who were instrumental in bringing these suits had claimed loftier goals at the outset, but now seem to have decided that money in hand outweighed some of those broader aspirations.

Former UFC middleweight Nate Quarry, who was a vocal part of the fighter cohort in this class action, wrote on Reddit that the settlement “seemed to be the best option” available at this point.

One loser in the settlement could be the competing MMA organizations who were hoping to see the playing field leveled. If a court had found that the UFC used anticompetitive practices to gain monopsony power in the sport, the resulting fallout probably would have produced an easier environment for promoting events outside the UFC. Instead, the status quo is likely to be mostly upheld, maintaining the UFC’s position as the unchallenged behemoth of MMA.

But there’s also the chance that fans and media lost out a little here too. Much of what we know about the inner workings of the UFC’s business comes from two sources: the sale of the UFC to Endeavor in 2016 and the documents circulated among potential investors, and the depositions and documents that were unsealed as part of the early stages of these antitrust cases.

If those lawsuits had gone to trial, we probably would have learned even more about how the UFC operates, how it views and treats its fighters, and how its managed to stay so far ahead of potential competitors. Instead, the settlement slams that door shut. Some secrets get to stay in the black box after all.

There’s also the question of where this leaves hopes for lasting changes. Back in 2015, when I first spoke to Rob Maysey, an attorney who was instrumental in bringing the antitrust suit, he laid out a plan to use antitrust action to force the UFC to negotiate with a fighters association. Maysey even helped start one such association — the Mixed Martial Arts Fighters Association — though it was mostly an aspirational organization that lacked collective bargaining power with the UFC.

Just as the NFL players gained an association of their own and the collective bargaining power to go with it only through arduous legal action, Maysey said, this was the fighters’ best hope to form an association that the UFC would be legally forced to recognize and negotiate with. But what becomes of that hope now that fighters have agreed to a settlement and some guaranteed cash instead?

Maysey didn’t reply to a request for comment, but the MMAFA account posted a message on social media saying it was “pleased with the settlement and will disclose more when we file with the Court in 45-60 days.”

While the UFC might be on its way to being a few hundred million dollars lighter in the wallet by then, it seems likely it’ll still have the same firm grasp on the sport that’s now bringing the company more than $1 billion per year — and growing.