UFC has settled two antitrust lawsuits for $335 million but plans no changes to its business operations, with the settlement amount to be paid in three installments over the next year.
UFC’s antitrust lawsuits got settled in March. They’re shelling out $335 million over the next year. But, it seems like the settlement ain’t changing how they plan to do business.
TKO Group Holdings had a quarterly financial call on Wednesday. They’re the merged company of UFC and WWE. Both TKO’s CEO Ari Emanuel and CFO Andrew Schleimer had a lot to say. They discussed the end of the antitrust lawsuits and the impact on operations.
Schleimer was pretty pleased during the call. He said, “We’re pleased to have this matter resolved without introducing any further changes to UFC’s existing business operations.” He also mentioned that the long-form settlement agreement would be filed soon.
Emanuel had a similar tune. He said, “We settled all claims in the UFC antitrust lawsuits, bringing that matter to a close, without introducing any further changes to our existing business operations.”
So, what’s the takeaway? The UFC’s business operation isn’t changing. The only hit they took was the financial penalty paid to the fighters who filed the lawsuits.
There were two lawsuits filed. The first one in 2014 claimed that UFC had a “scheme to acquire and maintain monopsony power in the market for elite professional MMA fighter services.” The fighters said UFC achieved this through exclusive contracts, coercion, and acquisitions that eliminated potential competitors.
The plaintiffs were originally seeking damages between $894 million and $1.6 billion. Big numbers, right?
A big part of the initial lawsuit was UFC’s alleged use of long-term, exclusive contracts. These contracts kept fighters tied to the promotion and stopped them from exploring other options.
The full settlement agreement hasn’t been revealed yet. But, TKO Group Holdings’ statement makes it clear that UFC’s operations won’t change, except for the financial payment.
Speaking of the payment, Schleimer revealed that the full $335 million was accounted for in the first quarter results for 2024. That’s why the company reported a net loss of $249.5 million. The payments will be made in three installments over the next year.
And guess what? The settlement is expected to be tax deductible for TKO. Schleimer explained, “We recorded a charge for the full 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 courts still need to sign off on the settlement agreement. But, both parties have already agreed to the terms, so it’s unlikely that the deal gets rejected.
This settlement marks the end of a decade-long battle between the fighters and UFC. Both antitrust lawsuits are now closed. Phew!