Report: ‘Massive’ lawsuit against UFC is imminent
Brent Brookhouse and John S. Nash for BE are reporting that a class action lawsuit by former and current UFC fighters against the UFC is imminent.
Brent Brookhouse and John S. Nash for BE are reporting that former and current UFC fighters plan to file a massive class action lawsuit against the UFC, and that it is imminent. The alleged suit alleges that the sport’s dominant league used its market power to cripple the free market.
No names of the fighters involved have been confirmed, although the list is said to contain notable personalities in the MMA space.
… the suit will be based on accusations that the UFC has violated antitrust laws by abusing their “market power” to intentionally and systematically cripple the free market. Several of the individuals we spoke to compared it to the recent San Jose hi-tech employee and NCAA antitrust cases. The manager of one high profile fighter who wished to remain anonymous has informed Bloody Elbow that the plaintiffs will be seeking damages for potentially hundreds of millions of dollars due to reduced fight purses, video game rights fees, and other sources of income. The final amount could even be greater, with statutes awarding “treble damages” in antitrust cases.
According to our sources the fighters are represented by three or four large firms renowned for antitrust litigation. The firms named to us have won major class action antitrust cases against bigger targets than the UFC, including against those in the banking, credit, technology and pharmaceutical industries.
As one well known former fighter told us “These are major players. These are not people [the UFC] will be able to out-spend.”
In 2011 there was an ongoing, not-completely-secret investigation of UFC and Strikeforce parent company ZUFFA by the Federal Trade Commission, to determine whether ZUFFA holds a monopoly position in the space.
For months company owners Lorenzo Fertitta and Dana White described the idea as ridiculous.
The FTC eventually announced that the investigation was closed, as detailed in a letter to the New York City-based law firm Axinn-Veltrop-Harkrider, LLP, which had been retained by ZUFFA as its representation before the FTC.
January 25, 2012
Office of the Secretary
Stephen Axinn, Esq.
Axinn Veltrop, and Harkrider LLP
1330 Connecticut Ave., NW
Washington, DC 20036
Dear Mr. Axinn:
The Federal Trade Commission’s Bureau of Competition has been conducting a nonpublic investigation to determine whether Zuffa, LLC’s acquisition of Explosion Entertainment, LLC may violate Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.
Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed. This action is not to be construed as a determination that a violation may not have occurred, just as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves the right to take such further action as the public interest may require.
By direction of the Commission.
Donald S. Clark Secretary
Parent company ZUFFA at the time owned both Strikeforce and UFC and had bought arch rival Pride FC in 2007. Since then global media giant Viacom acquired a majority share of Bellator, and put on the most viewed event of the year thus far. It is difficult to see how if a monopoly situation was not present then sufficient to warrant further SEC investigation, that one exists now.
If there is indeed an actual class-action lawsuit brought, questions like that one will doubtless be answered.