UFC Class Suit Embodies Two Powerful Legal Weapons in Sports

Mixed martial arts fighters recently won class action status in their antitrust lawsuit against Ultimate Fighting Championship, a major victory that means they can proceed as a group at trial next spring. The fighters say that the UFC leveraged its alleged monopoly position in the MMA industry to dictate onerous contract terms to its fighters, suppress their compensation, and squeeze out potential rival promotors and competitors.

This lawsuit comes as professional and amateur athletes are combining two powerful tools—the federal antitrust laws and class action procedure—to challenge practices that they allege deprive them of their monetary and other rights.

Federal antitrust laws generally prohibit two types of conduct: monopolization and concerted action that unreasonably restrains trade.

Monopolization occurs when a private business entity dominates an industry to such an extent that it can unilaterally impose its own rules and terms on those who want to do business with it. The flip side of that is a monopsony, where the buyer—not the seller—of goods or services dominates the market for those services. That’s the current legal theory underlying the claims made by thousands of present and former MMA fighters against UFC, the highly successful promoter of MMA events in the US.

Illegal concerted action, by contrast, occurs when two or more businesses get together and agree to fix prices for a consumer product or otherwise engage in conduct that suppresses competition. A simple example is two airlines that get together and agree to set the price for a roundtrip airline ticket between New York and Miami—a clear violation of federal antitrust laws because it stifles competition and causes consumers to pay that artificial fare uninfluenced by competitive market forces. But other conduct also fits within that prohibition. And we’re seeing that play out in real time in the sports world.

Successful lawsuits against the NCAA now permit college athletes to receive compensation for monetizing their name, image, and likeness through sponsorship and endorsement deals.

Those lawsuits were brought under federal antitrust laws, eventually reaching the US Supreme Court. The court by a 9-0 vote unanimously rejected the NCAA’s arguments that it was immune from federal antitrust laws and that its regulation of financial benefits to student-athletes was necessary to preserve the “amateur” status of college sports.

The decision forced the NCAA to abandon its long-standing policy against NIL compensation and withdraw its threat to revoke the eligibility of college athletes who accepted NIL deals. The legal analysis is relatively straightforward: The NCAA is an association of its member schools, so its conduct prohibiting certain financial benefits to college athletes constitutes “concerted” action under federal antitrust laws. Its rules against NIL were an unlawful “restraint of trade.” The “restraint” was the NIL prohibition itself. The “trade” was the athlete’s ability to make money off their own persona.

Against this legal backdrop is a procedural tool that ups the ante for these antitrust disputes—the class action. A class action allows hundreds or thousands of aggrieved persons to join their claims together in one unified lawsuit when those claims involve common legal or factual issues, and resolve them all together.

This spares the courts and parties from litigating hundreds of separate lawsuits when the issues in them are largely the same. And this is exactly the course taken in the UFC litigation. The court in that case has certified a class of 1,200 present and former UFC fighters that will be tried together in one proceeding.

The efficiencies in this type of collective litigation are both economic and strategic. In the UFC case, the fighters’ lawyers have hired four highly credentialed experts to offer opinions on the monopoly power of the UFC to impose its will on the fighters and against potential competitors.

Under the class action procedure, those expert opinions will be offered only once, in one trial. If these cases were tried separately, the individual lawyers for each of the fighters would have to separately hire—and pay for—experts to offer opinions on these same subjects multiple times in multiple courts.

The same is true with the litigation against the NCAA. All of those cases were brought as class actions on behalf of thousands of Division I college athletes, with the outcome of each judicial proceeding applicable to all.

And the pairing of antitrust law with class action procedure continues in the sports world. Two volunteer coaches are challenging, on antitrust grounds, a since withdrawn NCAA rule that prohibited compensation to unpaid assistants, limiting payments to a dictated roster of coaches. They seek to represent a class of volunteer coaches across several sports, including baseball, soccer, swimming and track and field. The Ivy League is facing a class action antitrust lawsuit over its league-wide ban on all athletic scholarships.

These will continue to be potent weapons in the sports industry, where power is often consolidated in a single league or organization and the athletes and coaches have similar reasons to challenge them.

The case is Cung Le et al v. Zuffa, LLC d/b/a Ultimate Fighting Championship and UFC, D. Nev., No. 2:15-cv-01045, 8/9/23.

The views and opinions expressed in this article are the author’s own and do not necessarily reflect those of Temple University or its Law School.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Kenneth A. Jacobsen is a practice professor at Temple University Beasley School of Law and director of its Sports Law Program.

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