TKO Settles Class-Action Lawsuits For $335 Million – ‘So Wild, Peanuts’
TKO Group Holdings Inc. has agreed to a $335 million settlement for two class-action lawsuits filed by former UFC fighters.
The lawsuits claimed the UFC had formed a monopoly over how much fighters could earn. This was done by breaking antitrust laws. A lawsuit was issued in 2014 under the case ‘Le et al. vs Zuffa.’ Approximately 1,200 fighters expressed their grievances in a case put forward by Cung Le, Nate Quarry and Kajan Johnson.
Other fighters soon followed as Brandon Vera, Luis Javier Vazquez and Kyle Kingsbury stepped up. Further developments would follow in 2021. Kajan Johnson and C.B. Dollaway filed a lawsuit along the same lines. The case was set to go to trial on April 15 if both sides could not agree on a settlement. The UFC had failed to dismiss the lawsuit, initially spelling bad news for them.
TKO’s Settlement
“Record evidence indicates both that these tactics were intentionally and consistently used by management to maintain contractual control of fighters and to send a message to fighters that they were essentially stuck with UFC for the life of their careers. The structure of these deals, particularly the fact that the fighter was only paid when they fought, meant that these tactics were a credible threat to every fighter under contract with [the UFC],” Judge Boulware stated
The damages were expected to be somewhere in the $894 million-$1.6 billion region. But the final sum is a lot less. The Securities and Exchange Commission confirmed that a settlement has been reached.
“On March 13, 2024, TKO reached an agreement to settle all claims asserted in both class action lawsuits ([Cung] Le and [Kajan] Johnson) for an aggregate amount of $335 million payable by the Company and its subsidiaries in installments over an agreed-upon period of time. The terms will be memorialized in a long form agreement and then submitted to the court for approval. The Company anticipates that the settlement amount will be deductible for tax purposes,” TKO Group Holdings said
TKO’s Future
The news has already had widespread ramifications. There are suggestions that the settlement is much less, given that the estimated damages were much higher. There are also question marks over whether the figures could have been higher if it had gone to trial. But the news has already benefited TKO. After the settlement was reached on March 20, TKO’s stock increased by 7.84 percent, from $81.15 per share to $87.37. Based on their record revenue of $1.3 billion last year, the UFC hopes to continue growing.
“TKO is off to a strong start following record financial performance in 2023 at both UFC and WWE. We secured Anheuser-Busch as the official beer partner of UFC, delivered a transformative deal to bring WWE’s Raw to Netflix beginning in 2025, and expanded our international footprint in important growth markets. We have more conviction than ever in the combination of these businesses and TKO’s ability to drive topline growth and margin expansion, generate meaningful free cash flow, and deliver sustainable long-term value for shareholders,” TKO CEO Ari Emanuel said
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