Today it was revealed that a new deal was reached in one of the antitrust lawsuits against the UFC.
In an SEC filing the following was revealed:
As previously disclosed, TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC) ("TKO OpCo"), a subsidiary of TKO Group Holdings, Inc. (the "Company"), and/or certain of its affiliates, including Endeavor Group Holdings, Inc., TKO OpCo's ultimate parent entity (collectively, "TKO"), are party to several substantially similar class-action lawsuits filed against them by former UFC athletes, alleging violations of Section 2 of the Sherman Act. Five of these related class-action lawsuits filed between December 2014 and March 2015 were consolidated into a single action in June 2015, captioned Le et al. v. Zuffa, LLC, No. 2:15-cv-1045-RFB-BNW (D. Nev.) (the "Le" case).
On September 26, 2024, TKO reached an agreement with the plaintiffs to settle all claims asserted in the Le case for an aggregate amount of $375 million payable in installments over an agreed-upon period of time by the Company and its subsidiaries (the "Updated Settlement Agreement"), following the court's denial of an earlier proposed settlement agreement. The terms of the Updated Settlement Agreement have been memorialized in a long form agreement, which will be submitted to the court for approval. The Company anticipates that the settlement amount will be deductible for tax purposes.
The UFC is facing two antitrust class actions. The Le case and the Johnson case. Earlier this year the parties tried to settle both cases for $335 million. That deal was rejected by Judge Boulware who has yet to release his written reasons behind the rejection. This deal of $375 million is to just settle the Le case which covers fighters from 2010-2017. The Johnson case which covers fighters from 2017 to present is not part of this deal. That was confirmed in a press release issued by UFC parent company TKO:
"We have reached a revised agreement with Plaintiffs to settle the Le case with terms that we believe address Judge Boulware's stated concerns. While we believe the original settlement was fair — a sentiment that was also shared by Plaintiffs — we feel it is in the best interest of all parties to bring this litigation to a close.
As for the Johnson case, that process is in very early stages, and a motion to dismiss the complaint remains pending."
This settlement will need court approval. One of the reported reasons for the failure of the last settlement was Judge Boulware's concerns about one pot of money being split up between the two classes. Time will tell whether dealing with only the Le class, allocating all of the money to it and adding $40 million more will be enough to satisfy the court.
Presumably no contractual changes will be part of this deal as the Le fightres are only seeking damages and potential injunctive relief will be left for the Johnson case to pursue (this is just speculation on my part). More details will be revealed as the new deal is presented to the Court for preliminary approval.
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