UFC Owners: Antitrust Settlement Ends With “No Further Changes to UFC's Existing Business Operations”

The UFC settled a pair of antitrust lawsuits in March with plans to pay out $335 million next year, but the settlement doesn't appear to have any impact on how the promotion plans to do business moving forward.

On Wednesday, during a quarterly earnings call with TKO Group Holdings, the combined company that includes UFC and WWE, TKO CEO Ari Emanuel and CFO Andrew Schleimer released prepared statements discussing the resolution of the antitrust lawsuits, as well as payout details and its impact. for activities.

“We are pleased that this matter has been resolved without making any further changes to UFC's existing business operations,” Schleimer said during the call. “The long-term settlement agreement is expected to be submitted to the court for approval soon.”

Emanuel echoed that statement with his own statement, which read almost verbatim as Schleimer's statement, regarding the dismissal of antitrust lawsuits.

“We have resolved all claims in UFC antitrust lawsuits, bringing this matter to a close, without making any further changes to our existing business operations,” Emanuel said in a prepared statement.

Based on these statements, which specifically state that the settlement was reached without any further changes to the UFC's existing business operations, it appears that the only blow to the promotion was the financial penalty paid to the fighters who filed the lawsuits.

There have been two separate lawsuits, the first of which was filed in 2014, alleging that the UFC is engaged in “a scheme to acquire and maintain monopsony power in the market for the services of elite professional MMA fighters.” The fighters argued that the UFC achieved this goal through three key elements: exclusivity contracts, coercion and acquisitions that eliminated potential competitors.

Plaintiffs in the case initially sought damages ranging from $894 billion to $1.6 billion.

The bulk of the original lawsuit, which ultimately led to class certification in court, was the UFC's alleged use of long-term exclusivity contracts that kept fighters locked into promotional deals and prevented them from exploring options with other organizations.

While the full settlement agreement has not yet been disclosed, TKO Group Holdings' statement made it clear that other than financial payments, there will be no other changes to the UFC's operations.

Regarding the payment, Schleimer also said that all $335 million was included in the first quarter 2024 results, so the company reported a net loss of $249.5 million. The actual payments will be made in three installments over the next year.

The settlement is also expected to include a tax deduction for MSW.

“As previously reported, the aggregate settlement amount is $335 million,” Schleimer explained. “We have committed to paying the entire amount in the first quarter, which will be paid in three installments: $100 million this quarter, $100 million in the (fourth quarter) and the final $135 million in the second quarter of 2025.”

“The settlement is expected to be deductible for tax purposes when paid. As a result, we expect that our tax payments to members, as required by our surcharge structure, will be significantly reduced so that we will not experience a negative dollar-for-dollar impact on cash.”

The courts have yet to sign off on the settlement, but since both parties have already agreed to the terms, it is unlikely that the deal will be rejected.

This ultimately ended a decade-long battle between the fighters and the UFC, as both antitrust lawsuits were dismissed.

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Written by ADMIN

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