Rumors surge regarding FTC investigation of UFC
If the FTC is in fact conducting an investigation it is private and we are not going to hear much…
If the FTC is in fact conducting an investigation it is private and we are not going to hear much from their end until they have finished doing what they do and decide whether or not they have a valid case.
The FTC will take into account several factors in determining if a monopoly exists.
1. Market Share
If one was to look at individual market sectors such as PPV sales for MMA or event sales than it would be tough to say that there is another actual competitor.
If the particular markets are broken down, they may not all be viewed consistently. For example, there are many areas where Zuffa is undoubtedly dominant, but one area which they may not override, for example, is televised MMA fights.
2. Possibility of Substitutionin a Particular Market
It may be taken into account that Bellator, Cage Fury Fighting Championship (CFFC) and the UFC have all been able to successfully host MMA events in places like Atlantic City, New Jersey.
3. Ability to Influence Price in a particular market.
4. Import and Export Status of the goods or services. As announced before every event, the UFC can be viewed in over 130 countries in 20 different languages.
Finally, rumor has it the FTC is investigating for Tortious Interference.
The FTC would have to prove that the UFC knowingly convinced a party to breach a contract or prevented them from fulfilling their contractual obligations.
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So how likely is it that the FTC would find Zuffa in violation of antitrust laws?
Precedent case United States v Syufy Entertainment (1990) says it’s doubtful.
Syufy Enterprises was a motion picture company in Zuffa’s home town of Las Vegas which bought out virtually all of the theaters in the city with the exception of one cinema which showed primarily second run films. The eight and a half day trial was heard by the Ninth Circuit Court of Appeals which found for Syufy for reasons that any theater had the ability to open up without barriers. The case is similar to Zuffa’s situation in that patrons of the theaters suffered no direct injury as a result of the transactions nor did the bought out competitors complain, as the prices were fair.