UFC settles for $335 million in class action lawsuits. What do we know?

For sometime now, the UFC’s contractual structure has faced increasing scrutiny. From Kamaru Usman to Francis Ngannou, we’ve seen many top-tier fighters lamenting the size of the purses that they compete for. Now, it seems things may be about to change after a significant ruling and subsequent settlement in two major class action lawsuits.

UFC to pay $335 million in settlement

According to reports on Wednesday, the UFC has reached a settlement in two class action antitrust suits that the organization faced (Le vs. Zuffa and Johnson vs. Zuffa) to the tune of $335 million. It is understood that the money will be split among the fighters who participated in UFC fights during periods covering both suits - Le vs. Zuffa covering 2010 to 2017 and Johnson vs. Zuffa covering the period after 2017. This of course will be after fees are paid to the lawyers involved in the case. It’s worth noting, that in the initial stages of the case, five separate lawsuits were filed between December 2014 and March 2015, however, the cases were eventually unified in the Le vs. Zuffa case, with the Johnson vs. Zuffa case being filed in 2021.

“On March 13, 2024, TKO reached an agreement to settle all claims asserted in both class action lawsuits (Le and Johnson) for an aggregate amount of $335 million payable by the Company and its subsidiaries in installments over an agreed-upon period of time,” a TKO statement read. “The terms will be memorialized in a long-form agreement and then submitted to the court for approval. The Company anticipates that the settlement amount will be deductible for tax purposes.”

OK, but what’s the story with the UFC lawsuits?

As always, context is key. In the case of the the antitrust suits, they claim that the UFC used practices that not only limited fighters’ ability to negotiate with other promotions, but also locked them into restrictive contracts, which in turn led to a situation where fighters were paid less than they should be. To that end, a figure of up to $1.6 billion in damages was put on the table. With that in mind, a $335 million settlement can be seen as a massive win for the UFC and parent company TKO.

Truthfully, the ‘victory’ is even more poignant if both organizations can continue to maintain their contract structures. Adding further weight to that argument is the fact that TKO Group Holdings stock shot up nearly five and a half points following news of the settlement. To be clear, the proposed settlement must still be ratified by the court. As things stand, the next court date in the trial is set for April 15th which means fight fans will have to wait a little under a month to see how this all pans out.

“We are pleased to have reached an agreement to settle all claims asserted in both the Le and Johnson class-action lawsuits, bringing litigation to a close and benefitting all parties,” A UFC statement read. “The final terms of the settlement will be submitted to the court of approval.”