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Fri, November 10, 2023

Lawsuit to proceed which claims the UFC has created a monopoly over the MMA industry

Lawsuit to proceed which claims the UFC has created a monopoly over the MMA industry

Hundreds of mixed martialists are suing UFC parent company Zuffa LLC for creating a monopoly over the industry which resulted in fighters being paid a fraction of what they would earn in a competitive market. 

The Ultimate Fighting Championship (UFC) have enjoyed dominance in the market since 2006 when Japan-based PRIDE FC collapsed meaning fighters did not have much leverage when negotiating pay as the UFC knew that they had nowhere else to turn at a similar level. The UFC’s popularity has risen exponentially in the last decade, but fighters pay has not enjoyed this same level of growth. 

The UFC also utilises restrictive non-compete clauses which ensure fighters cannot fight for other MMA organisations, further limiting the pay that they can receive throughout their careers. 

Unlike the vast majority of sports leagues and organizations, where athletes receive anywhere between 47% and 50% of revenue, the UFC has historically paid out between 16% and 19% of its revenues to fighters.

The UFC may now look to settle the dispute with the fighters which will come at significant financial loss to the organisation or risk going to trial where it could be ruled that they have created a monopoly resulting in them needing to give up some of their market dominance in terms of advertising and broadcast rights, fighter bargaining power and flexibility plus increased pay for fighters. 

The claimants are seeking between $800m and $1.6bn in damages. The lawsuit is scheduled to start in April 2024. If successful, it could reshape the landscape of MMA and redefine how the UFC operates.

UFC Annual Revenue Growth

2016: $690 million

2017: $750 million

2018: $695 million

2019: $860 million

2020: $890 million

2021: $1 billion

2022: $1.14 billion

2023 (Q1-Q3): $1.009 billion

The UFC is also facing the threat of competition after Saudi Arabia’s $100m investment in the Professional Fighters League (PFL), a UFC competitor. Whilst the UFC played down concerns that the PFL would be problematic for them some fighters may be attracted to it. 

Former UFC heavyweight champion Francis Ngannou was stripped of his title and released from the organization as a free agent. He signed with the PFL and secured a mega fight against heavyweight boxing champion Tyson Fury in Saudi Arabia. Following the fight it was reported that he made more money than his entire UFC earnings combined. Ngannou’s success could spur more fighters to explore free agency in pursuit of more lucrative opportunities elsewhere.

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