The UFC continues negotiations with the plaintiffs involved in a pair of antitrust lawsuits filed against the company but after a judge denied the initial settlement agreement, it’s impossible to tell how this ends.
In a surprising move, Judge Richard Boulware from Nevada shut down a settlement agreement in July after the UFC agreed to pay out $ 335 million to settle a pair of lawsuits with the first one filed all the way back in 2014.
The judge previously stated in court that he objected to the settlement because the agreed upon payout seemed low and that the fighters represented in the second lawsuit — covering athletes from 2017 to the present — could object to arbitration and class-action waiver clauses in existing contracts.
On Wednesday, TKO Group Holdings president and chief operating officer Mark Shapiro addressed the judge’s decision to deny the settlement against the wishes of both the plaintiffs and the defendants.
“Anyone that is a student of our business that has closely followed this story knows what’s going on is just ridiculous,” Shapiro said while appearing at the Goldman Sachs Communacopia + Technology Conference. “We ultimately cut a deal to settle these cases, both suits, where the plaintiffs — the fighters if you will — near unanimity that this was good for them. By the way, we spent a lot more than anybody thought we were going to spend, [what] our board wanted us to spend, or we even thought was frankly appropriate, when it came to the two cases before us. But nonetheless to take it off the table we reached a deal and we’re on our way and then the judge doesn’t even grant preliminary approval.
“Keep in mind, if you grand preliminary approval then that gives a window for anybody to come forward, fighters who don’t agree or there isn’t unanimity [saying] ‘wait a second, this isn’t fair,’ to step up and be heard. He shut this down before they even had a chance to be heard. That’s somewhat unprecedented I’d have to say, in the sense that it’s a hell of a payout and the [Kajan] Johnson case, which is the second case [covering fighters from 2017 to present], just taken to the testimony in court with the judge, very clearly say ‘we don’t think on our own we have a case, we can’t find a lawyer to take our case, it’s very difficult here, this is why we want this deal.’ So you had both plaintiffs totally aligned with the UFC and our lawyers that this settlement was fair and we’re going to move on and we’re looking for your approval. He saw it another way. Asked us to get back together and talk about another way to skin the cat.”
The judge eventually set a new trial date on Feb. 3, 2025 for the first antitrust lawsuit filed by fighters such as Cung Le, Nate Quarry and others while instructing both parties that he wouldn’t push the start of the trial unless he approves a new preliminary settlement agreement.
Of course, the UFC continues to dialogue with the plaintiffs in hopes of reaching a new agreement so the case never goes to trial but Shapiro made it clear that the company already reached a ceiling as far as a potential payoff for the settlement.
If the case ends up going to trial and a judgment goes against the UFC, Shapiro promised that the company would exhaust all legal means to fight the ruling to the bitter end.
“We are having those conversations because that’s the direction,” Shapiro said. “I would tell you this is a difficult one because we’re not going to just be writing a bigger check. This is frankly at the top of where we wanted to ever be or ever thought we would be. We feel very strongly in the merits of both cases. We are going to pursue this and chase this and defend ourselves in a very intense way, let’s put it that way.
“If there is an adverse outcome, we will go all the way. I want to make that clear. We will appeal and we will appeal and we will appeal and we will appeal, just like the NFL said they were going to do with their Sunday Ticket/DirecTV situation.”
Back in June a jury awarded $ 4.7 billion in damages to subscribers after ruling that the NFL violated antitrust laws in distributing out-of-market Sunday afternoon football games on a premium subscription service. Before a potential appeal process could even get going, a Federal judge overturned the ruling and granted judgment to the NFL while ruling that testimony from a pair of witnesses in the trial should have been excluded.
Shapiro obviously sounds confident that the UFC will eventually close this chapter but that doesn’t absolve the ruling that shut down the initial settlement agreement to resolve both cases.
“This is kind of absurd what’s happened” Shapiro said. “Nobody is on board with it. The plaintiffs want the money and the sport and the competition will be better for it. All this is doing is lining the pockets of more lawyers.”
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