Unveiling the UFC's Future: Blockbuster Lawsuits Threaten the MMA Giant's Business Model
Unforeseen legal action threatens UFC enterprise structure
By Mike D. B.
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The battle rope between MMA fighters and the Ultimate Fighting Championship (UFC) just got a whole lot thicker. Traditionally, MMA warriors haven't been deemed full-time employees but rather independent contractors. This setup hasn't allowed them to swiftly migrate to other fighting arenas. But a brace of jaw-dropping lawsuits could alter that game plan.
Financial grievances have long plagued the UFC, the reigning Mixed Martial Arts crown jewel. Countless fighters grumble about their paychecks, claiming the UFC capitalizes on its market dominance to rob them blind. This has already prodded a class-action lawsuit that droned on for ten years, finally settling for $375 million. Two fresh cases are now jeopardizing the UFC's business model, and their consequences for the entire sport could be staggering.
These cats don't work for an organization such as the UFC; instead, they're exclusive gig workers. They're hobbled by a specified contract term and the number of agreed fights via the promoter. On average, a fight is pipelined every six months due to the injury risk. Various clauses can prolong the contract, for example, when fights are declined or injuries occur. The larger the corporation, the more convoluted its contract quagmire — and almost always against the athlete's interest.
In the past legal scrap, several former UFC fighters took on Zuffa LLC, the UFC mammy ship. The MMA organization wished to squash the case in one swift blow, but the judge begged to differ. The compensation was too stingy, and contractual clauses prevented additional combatants from hopping on the lawsuit bandwagon, court records showed. Furthermore, the judge panned the UFC for lack of an action plan to address its alleged monopolistic grip.
Now, the first of the sequel lawsuits is amplifying those concerns. Primarily, fighters who are impeded from participating in a lawsuit due to contractual clauses should receive compensation. This move would significantly beef up the ranks of potential plaintiffs, and the claimed losses could hit the hundreds of millions again.
The second lawsuit, dropped in late May, is a wild card. It involves a former UFC warrior, Phil Davis, who isn't chasing compo. Instead, Davis aims to prove the UFC's monopolistic gripalso impacts the salary of warriors in competing organizations. He alleges UFC contract terms hinder other professional MMA event organizers, like the Professional Fighters League (PFL), in their ability to recruit world-class MMA warriors to rival the UFC at the pinnacle of sport.
Due to extended contract commitments with the UFC, other organizations can't access top-tier warriors, and thus cannot stage clashes of the titans equal to UFC slugfests. Phil Davis understands this predicament all too well. He ranks eighth in the overall welterweight ratings, but there are fights at his level that could fatten his paycheck.
Davis is challenging the UFC's contractual practices, specifically their policy of binding top warriors against their will for prolonged periods. He advocates for the implementation of a "sunset clause," a contract provision that ensures some obligations automatically expire or become void without penalty after a specified period. Essentially, this would allow for an early contract exit. The UFC momentarily incorporated such a clause in their contracts following the initial UFC antitrust lawsuit in 2014, but soon axed it after warriors like Francis Ngannou exploited it to escape the promotion's grip and score big-money deals with other organizations. Ngannou had one match left on his contract but simply bided his time.
Davis now champions a one-year "sunset clause," a move that could send shockwaves through the entire MMA scene. Many UFC warriors could potentially ditch the UFC for other organizations within months, renegotiating their compensation packages each time. While this would ensure market-based payment, large organizations would have little contractual stability. If the UFC were to concede to such a clause, other organizations might follow suit, leading to sky-high turnover rates. Many warriors might choose to sit out their contracts without actively competing, which could result in fewer recognizable faces within organizations. Ultimately, the UFC would likely shoulder the majority of financial damage, as many of its stars could be enticed by the higher salaries of other organizations.
The probability of success for both lawsuits remains uncertain. However, given prior judicial concerns about the UFC's potential monopolistic clout, prolonged and complex legal bullfights can be expected in both cases.
Sources: ntv.de, espn.com, mmafighting.com
- Mixed Martial Arts
- Ultimate Fighting Championship
The lawsuits against the Ultimate Fighting Championship (UFC) could potentially impact the entire Mixed Martial Arts (MMA) industry, as they aim to address financial grievances and contractual issues faced by MMA fighters. The first lawsuit seeks compensation for fighters hindered by contractual clauses from participating in lawsuits, while the second lawsuit alleges the UFC's monopolistic grip affects salaries of MMA fighters in competing organizations like the Professional Fighters League (PFL).
