Rebook the fight.
Four months after the UFC and plaintiffs in yearslong antitrust cases against the mixed martial arts titan settled for a $335 million payout to athletes past and present, U.S. District Judge Richard Boulware late Tuesday night in Las Vegas denied a preliminary approval for conditions of the settlement.
Boulware, who in court on July 12 surprisingly appeared to foreshadow the latest development for separate lawsuits Le v Zuffa and Johnson v Zuffa, made it known that he felt that $335 million was not adequate despite the parties’ legal teams expressing satisfaction with the result.
A trial for Le v Zuffa, a class action suit, is tentatively scheduled for Oct. 28 in the District of Nevada but can still be avoided if the two sides arrive at a new settlement that they believe Boulware would approve.
Boulware did not elaborate on the rationale for his rejection of the settlement, and it is unknown when to expect it.
Johnson v Zuffa, which has not been class certified, is not as far along down the litigative path, and a trial is not imminent, but the $335 million settlement was intended to put a period on both lawsuits.
Eric Cramer, the plaintiffs’ lead attorney, issued a statement Wednesday afternoon that plaintiffs “respect the Court’s ruling rejecting the proposed global resolution of the Le and Johnson cases, and accordingly will be moving forward full speed on all fronts as directed by the Court.”
The statement added that, while the plaintiffs will prepare for trial in Le and discovery in Johnson, they are “open to reengaging with the UFC to see whether the parties could reach a settlement building off of the momentum achieved in the prior settlement, but working to satisfy the Court’s expressed concerns with that resolution.”
A statement from the UFC released later Wednesday afternoon led: “We obviously disagree with this ruling and believe it disregards the expertise of counsel from both sides, as well as that of an accomplished and expert mediator — all of whom have decades of experience in antitrust case law.”
Later in the UFC’s statement, the promotion referred to Boulware’s rejection as an “unusual step” and notes the judge “is also denying the athletes their right to be heard during this pivotal moment in the case.”
The UFC noted it has “initiated discussions with plaintiffs’ counsel who have expressed a willingness to engage in separate settlement discussions for the Le and Johnson cases.”
Risky business
Le v Zuffa going to trial would figure to be high-risk, high-reward for both sides — and, consequently, Johnson v Zuffa.
A jury could find that the plaintiffs deserve a settlement eclipsing $1 billion and injunctive relief, which has the potential to alter UFC contracts and the promotion’s business model, or the plaintiffs could receive nothing — not even the nine-figure settlement.
Fighters under UFC contract are considered by the promotion to be independent contractors, rather than employees, are obligated only to accept bouts with the UFC, and have at times been subjected to contractual stipulations that extend contracts under conditions such as winning a UFC championship or passing on an offered bout.
Both lawsuits allege the UFC’s growth into a multi-billion dollar entity came while engaging in monopoly- and monopsony-driven tactics, creating an unfair environment that tamped down the fighters’ earnings capacity below that of a competitive market.
The UFC rejects the notion, contending there was no organized effort to put a stranglehold on mixed martial arts market share and that they simply are the best at what they do to a high degree compared to other promotions that have come and gone — or been purchased by UFC’s then-parent company Zuffa, such as Pride Fighting Championships and Strikeforce.
UFC is now a part of TKO Group Holdings, whose stock dipped more than $3 to $106 as trading opened Wednesday before recovering to nearly the same point at close.
The UFC’s public face, CEO Dana White, often touts how many fighters have become millionaires through the promotion and their ability to make money through non-fighting opportunities such as film and entrepreneurial endeavors.
Decade in digestion
Le v Zuffa began its long road to this point as a Dec. 2014 complaint by Cung Le, Nate Quarry and Jon Fitch — all UFC veterans and former headliners.
The suit was later merged with others and, eventually, certified for class action.
Plaintiffs in the case all are athletes who competed in at least one UFC-promoted MMA bout taking place or broadcast in the United States between Dec. 16, 2010, and June 30, 2017, encompassing more than 1,200 fighters.
The plaintiffs seek both monetary damages and injunctive relief that would empower the court to resolve what they allege is the UFC’s unfair contracts and business practices.
The second suit initiated by UFC veteran Kajan Johnson was filed in 2021 and covers fighters from 2017 onward.
In contrast to the Le case, of which the vast majority are former UFC athletes, the Johnson case focuses primarily on current athletes with the aim of injunctive relief to a greater degree than the pursuit of a monetary settlement.
The settlement, announced March 20 and arrived at with mediation from a former judge of the U.S. District Court for the Western District of Oklahoma, Layn Phillips, avoided Le v Zuffa going to trial beginning the week after the landmark UFC 300 event in April and provided what appeared to be an early end to Johnson v Zuffa before that case could go to discovery.
Boulware’s rejection of the settlement after earlier this month signaling such a possibility was highly unexpected, particularly at the preliminary phase — attorneys on both sides of the case already had reportedly added the settlement to their online bios.
During the July 12 status conference in which Boulware expressed clear reservations about approving the settlement, attorneys for both sides made their pleas for the judge to accept it.
Plaintiffs’ counsel noted the breakdown of the payout to the fighters themselves, with attorney’s fees removed, and made the case for Boulware to allow the preliminary settlement to move forward to the next phase.
“The net recovery for Le is nearly $200 million ….$73,000 is the median recovery. $200,000 is the average recovery. There are 36 people that are getting $1 million. Five hundred people are getting more than $100,000,” counsel said, per court records. “Under every known metric, this is an incredible result.”
Instead, the two sides are left to wait for Boulware’s explanation and plan for the next round.
Credit: Source link
