The parent company of the Ultimate Fighting Championship has agreed to a $335 million settlement with a group of mixed martial artists whose antitrust lawsuit accused the organization of abusing its market position to suppress fighter pay, the company, TKO Group, disclosed on Wednesday.
The settlement avoids a costly trial, which was set to start in a month. For the U.F.C., it also eliminates the risk that a judge could have imposed remedies that might have upended the industry’s business model. In addition to monetary damages, the fighters had sought changes like a ban on long-term contracts, which would have given them more power and could have made it easier for potential challengers to the U.F.C. to arise.
Full details of the settlement, which requires court approval, have not yet been filed. TKO Group, which admitted no wrongdoing, said in a regulatory filing that it expected the settlement, which was agreed to last week, to be tax deductible. The settlement also includes a similar 2021 lawsuit against the U.F.C.
In a statement, a U.F.C. spokesperson said, “We’re pleased to have reached an agreement to settle all claims,” adding that it would benefit “all parties.”
Eric Cramer, a lawyer for the fighters, said the “plaintiffs are pleased with the result and look forward to presenting the full settlement and all of its terms to the court for approval in the coming weeks.”
If the U.F.C. had lost the suit, it’s possible that it could have been forced to pay the fighters almost $5 billion. At an evidentiary hearing in 2018, one expert for the plaintiffs said fighters had been deprived of $1.6 billion in pay, and in antitrust cases damages are tripled.
The class-action lawsuit accused the U.F.C. of abusing its authority as a monopsony — an exclusive buyer of services, in this case mixed martial arts fighters — by locking its fighters into long-term contracts and paying them a smaller share of revenue than other professional sports leagues pay their athletes.
Cung Le and a handful of other former U.F.C. fighters filed the original suit in 2014 against the U.F.C.’s parent company at the time, Zuffa. It and five related lawsuits that followed were consolidated into a single action in 2015. Endeavor bought Zuffa in 2016 and seven years later combined the U.F.C. with another purchase, World Wrestling Entertainment, to form TKO.
Shares of TKO jumped 7 percent after news of the settlement. Shares of Endeavor, which owns a controlling stake in TKO, rose about 2 percent.
Kevin Draper contributed reporting.
