UFC Wants Follow-On Antitrust Lawsuit Dismissed

    While the Le et al. v. Zuffa LLC antitrust case against the UFC remains in limbo awaiting a judge’s written order on an almost four-year-old motion for class certification, a decision could come any day on whether a follow-on lawsuit, filed by former UFC fighters Kajan Johnson and CB Dollaway, will be allowed to move forward.

    Both cases are overseen by U.S. District Judge Richard Boulware of Las Vegas, NV and allege the UFC illegally acquired and maintained monopoly and monopsony power in the MMA industry through the use of long-term, exclusive fighter contracts, among other corporate conduct. The Johnson complaint, as it’s referred to in court papers, is essentially an attempt to hold the UFC accountable for the continuation of this alleged anticompetitive conduct after June 30, 2017, the cutoff date of the Le lawsuit, originally filed in December 2014. The Johnson case also attempts to bring the UFC’s corporate parent, Endeavor Group Holdings, into the fold as a defendant.

    As the plaintiffs described in court papers, the Johnson complaint was filed “for two limited purposes: (1) to hold accountable Endeavor… for its active involvement in suppressing Fighter compensation; and (2) to preserve the rights of Fighters injured by [UFC’s] conduct after June 30, 2017.”

    The UFC’s response to the Johnson lawsuit is an intriguing one. On one hand, the promotion is fighting to have the complaint dismissed. Yet on the other hand, it seems to almost welcome the discovery the new lawsuit could bring for the 2017-2021 time frame.

    In filings for its motion to dismiss, the UFC makes technical arguments that the Johnson complaint “clones the facts of the Le complaint as if it is still the year 2014,” defines the MMA market in a “woefully under-inclusive” manner, and relies on the vague notion of a “top-ranked” fighter. It also claims Endeavor should be dismissed as a defendant since a parent company can’t be held liable for alleged anticompetitive conduct “purely based on the fact of its ownership.”

    Yet other parts of its filings have a distinctly different tone. Claiming the Johnson plaintiffs ignored new developments in MMA’s market conditions such as the PFL’s “massive financing,” ONE Championship’s expansion into North America, and Bellator’s “significant increase” in revenues, the UFC appears ready to dive into the facts surrounding business developments in the MMA industry since the promotion’s blockbuster $4 billion sale in the summer of 2016. The potential relevance is that both lawsuits, at their heart, are about the UFC’s purported ability to anticompetitively prevent rival MMA promotions from effectively competing.

    “In reality, judicially noticeable facts and market developments since 2017 do not suggest the presence of new anticompetitive conduct supporting this case,” the UFC noted in a reply filing to its motion to dismiss. “To the contrary, they not only suggest that the Johnson Complaint should be dismissed, but they also call into question the foundation of the Le complaint. There, plaintiffs alleged that new market entrants could not emerge, existing competitors could not grow, and athletes could not freely move among MMA promoters – yet the exact opposite has happened in the years covered by the Johnson Complaint. And, at the same time, athlete wages continue to rise with UFC leading the way in athlete pay.”

    It’s an interesting development to an overarching set of antitrust claims that have been ground to a halt waiting for one man – Judge Boulware – to register his class certification thoughts in writing for over a year now. The UFC would love for the Johnson case to be dismissed, yet appears ready to dive into discovery should it move forward. The plaintiffs attorneys bringing both cases certainly don’t want the UFC’s damages period to stop at June 2017. But they also may have filed the Johnson complaint to head off possible competition from a third-party law firm that allegedly contacted fighters about a potential lawsuit of their own.

    We’ll hopefully know soon whether the Johnson complaint will continue on and, if so, what type discovery will take place for the recent years since Endeavor bought a majority stake in the UFC. Discovery from the original Le lawsuit yielded significant disclosures on the business back-end of the sport including the percentage of event revenues paid to fighters, the length of fighter contracts, and the economics of UFC events. With the Johnson complaint, it’s possible even more could be coming down the line.

    Forbes Sports will keep readers informed of new developments as they arise.

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