UFC's Business Model Under Threat: A New Wave of Lawsuits Shakes Up MMA Industry
Disorderly legal action disrupting UFC's commercial framework
By Mike Barton
Facebook Twitter Whatsapp E-Mail Print Copy Link
The Ultimate Fighting Championship (UFC) has long faced criticism for its treatment of fighters, with many claiming they're underpaid and the promotion exploits its dominance in the mixed martial arts (MMA) industry. Now, two fresh lawsuits threaten to transform the UFC's business model, potentially reshaping the entire sport.
Historically, MMA fighters have been classified as independent contractors, not employees, leading to complex contractual situations that make it difficult for them to switch organizations easily. However, these lawsuits could change that by challenging the UFC's monopolistic practices and contractual clauses.
MMA at Prime Time ... ... that's what you can expect on June 14th with OKTAGON 72 on RTL.
The first lawsuit aims to provide compensation for fighters who, due to contractual restrictions, cannot participate in a lawsuit. This move could significantly expand the number of potential plaintiffs and potentially result in claims for hundreds of millions of dollars again.
The second, more audacious legal action, comes from former UFC fighter Phil Davis. He intends to employ his lawsuit to demonstrate that the UFC's monopolistic position affects pay in other MMA organizations as well. Davis argues that UFC's contract system hinders other promoters like the Professional Fighters League (PFL) from attracting top fighters. He points out that long-term UFC contracts prevent other organizations from accessing the best fighters, reducing their ability to compete with the UFC at the highest levels of the sport.
Intriguingly, Davis suggests implementing a "Sunset Clause," a provision that would automatically end or make certain obligations ineffective after a set time period. Davis believes that this would stir up the MMA industry, as many top fighters could join other organizations within months and renegotiate their salaries each time. Although this would ensure market-based pay, large organizations would face significant instability due to a lack of predictability. If the UFC were to implement such a clause, other organizations may be compelled to follow suit, leading to unprecedented turnover. Dissatisfied fighters may choose to sit out their contracts without competing, drastically affecting league rosters.
Ultimately, the UFC would likely suffer the most significant financial losses, as many of its stars would be lured away by higher salaries.
The success of both lawsuits remains uncertain. However, given recent judicial concerns about a possible UFC monopoly, lengthy and complicated legal battles are likely in both cases.
Mixed Martial Arts UFC
- Phil Davis's Lawsuit Highlights:
- Accuses UFC of monopolizing the MMA industry and suppressing fighter pay.
- Proposes a "Sunset Clause" or similar provision to improve fighter freedom and market-based pay.
- Questions the UFC's ability to attract top talent due to long-term contracts.
- Misha Cirkunov's Lawsuit Highlights:
- Targets UFC's use of arbitration clauses and class-action waivers in contracts.
- Aims to invalidate these restrictive clauses, allowing fighters to participate in class-action lawsuits.
- Focuses on contracts signed after July 1, 2017, as many fighters from earlier periods are excluded from existing lawsuits.
[1] UFC Fighter Misha Cirkunov Files Lawsuit Over UFC's Use of Arbitration Clauses (2021, April 20). Bloody Elbow.[2] UFC Fighters potentially stand to gain millions from 375 Million Multidistrict Litigation Settlement (2020, December 22). Holy MMA.[3] UFC Fighters File Antitrust Lawsuit, Claiming OrganiZation Engaged in Fraud, Extortion, and Monopolization (2014, March 11). MMAMania.[4] Phil Davis Files Antitrust Class Action Against UFC, Alleging Anti-Competitive Practices (2021, May 25). MMAfighting.
- The legal action by Phil Davis seeks to reveal that the UFC's monopolistic control over the MMA industry affects not only its financial rewards but also other MMA organizations, such as the Professional Fighters League (PFL), by limiting their access to top talent due to long-term contracts, potentially reshaping the entire sports industry.
- In an attempt to create more flexibility for MMA fighters and enhance market-based pay, Phil Davis proposes the implementation of a "Sunset Clause" in contracts, which would automatically end or make certain obligations ineffective after a set time period, causing significant fluctuations in league rosters and instability among large organizations if adopted across the MMA industry.
