Hitting Below the Belt? MMA Fighters Allege That UFC Has Monopolized the Mixed Martial Arts Game

by BakerHostetler
Contact

Throughout their history, professional sports leagues, including the National Football League, the National Basketball Association, and the National Hockey League, have generated high-profile antitrust litigation. The nascent sport of mixed martial arts now looks as if it will join that list, as two MMA fighters have brought a putative class action in the Northern District of California against Zuffa, LLC, an MMA fight promotion company that does business as Ultimate Fighting Championship (UFC). Le v. Zuffa, Case No. 5:14-cv-05484 (N.D. Cal., filed Dec. 16, 2014).

MMA fighters, like boxers, are represented by promoters who schedule bouts for their fighters, secure a venue to host the bout, contract for television or pay-per-view broadcasting rights, secure advertisers, and market the bout. The promoters then pay the MMA fighters a percentage of the proceeds collected from the bout. According to the complaint, Zuffa has violated Section 2 of the Sherman Act by monopolizing the market for promoting MMA bouts, and monopsonizing the market for representing elite MMA fighters. Thus, the top MMA fighters are forced to contract with UFC to promote their bouts or forgo any chance of becoming successful MMA fighters.

Until recently, the market for promoting MMA fighters was competitive, with several different companies vying to sign the top MMA fighters. According to the complaint, however, UFC consolidated the industry through a series of anticompetitive actions. Since its founding in 2000, UFC has acquired several MMA promoters that provided any competition for signing elite MMA fighters. To foreclose competitors that would not sell to UFC, and to prevent new entrants to the MMA promotion market, UFC has entered into a series of exclusive agreements with advertisers and hosting venues. UFC forbids any venue hosting UFC bouts from hosting any bout presented by other MMA promoters, whether on the undercard or on a separate date. UFC also requires its advertisers to deal exclusively with UFC for MMA bout promotion. Finally, UFC refuses to co-promote a bout between an MMA fighter represented by UFC and a fighter represented by another, competing promoter.

Those MMA promotion companies that UFC has not acquired or driven from the market have been relegated to serving as a minor league for MMA fighters. The remaining rival promoters represent only inferior or upstart MMA fighters attempting to win enough bouts, and gain a sufficient following, so that they can sign with UFC, which controls the majority of elite MMA fighters. In fact, those remaining promoters use exclusive agreements with their MMA fighters, but the contracts contain a clause that the fighter will be released from their agreement if they receive an offer from UFC.

The plaintiffs allege that UFC’s anticompetitive conduct has suppressed MMA fighters’ compensation such that MMA fighters earn from 10 percent to 17 percent of the revenue generated from the bout, whereas boxers and athletes in the four major sports leagues generally receive more than 50 percent of the revenue generated by their respective bouts or games. The UFC also, according to the complaint, has suppressed the compensation that they receive from the use of their names and likenesses. The complaint also alleges that UFC’s monopoly and monopsony allow UFC to impose restrictive contract terms, including some that extend beyond the expiration of the contract. For example, the standard UFC contract requires individual MMA fighters to assign the rights to the MMA fighter’s likeness to UFC in perpetuity. The standard agreement also requires the MMA fighter to grant a right of first refusal to match any offer the MMA fighter receives for a participating in a bout after the contract has expired.

One of the biggest challenges that UFC will face in defending itself will be addressing its executives’ public statements. Zuffa’s president, Dana White, made several statements on social media and at public events bragging about how UFC has eliminated its competition. For example, in an interview, White allegedly stated that “There was a time when [competition in the MMA industry] was neck and neck. That time is over. There were times when we were in dogfights, but everybody needs to just concede and realize we’re the [expletive] NFL. Period. End of story.” (Compl. ¶ 15.) White also posted a video to YouTube in which he held up tombstones of UFC’s rivals that had either been acquired by UFC or had folded. At a sports conference, UFC co-owners stood in front of a screen several feet high that contained a picture of the Earth and text that said “World F**king Domination; Reshaping the Sports World.” (Compl. ¶ 18.)

Although they can be characterized as hyperbole, these are the type of statements that get a complaint past a motion to dismiss or summary judgment, and grab a jury’s attention. Like MMA itself, Zuffa looks as if it will be entertaining.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.