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The owners of the Ultimate Fighting Championship are being sued by current and former UFC fighters over claims that the company violated antitrust laws.
Zuffa LLC, the parent company of the UFC, was sued in California state court on Tuesday, alleging that it prevented fighters from working with other mixed martial arts (MMA) promoters and made itself a monopoly. According to ESPN, the Federal Trade Commission started investigating the UFC for antitrust violations in 2011, but stopped in early 2012.
What are the specific claims of this UFC lawsuit, and what do the fighters want?
Is the UFC a Monopoly?
The main thrust of this UFC suit is that the company stifles competition from other MMA leagues, essentially becoming a monopoly. Federal law and state antitrust laws prohibit business activity that has the effect of freezing free-market competition, such as price-fixing schemes or monopolization. Historically, these laws have been used to bust up the post-industrial empires of oil and steel that dominated the late 1800s.
In today's world, antitrust litigation has been used to curb businesses like Apple for its role in price-fixing e-books. The UFC is being accused of using similar tactics to deny UFC fighters free agency, keeping them on meager salaries while raking in millions for itself. According to Sports Illustrated, the UFC enforces a "champion's clause" which automatically extends a fighter's contract if he becomes a champion. Combine this with the UFC's "exclusivity clause" and you have top-rung MMA fighters who are unable to look elsewhere for work.
The fighters are also obligated to sign away their likeness rights (much like NCAA players), so the UFC gets to profit off of selling their images in video games, merchandise, and broadcasts. SI reports that without any legal control over these likeness rights, the chance of negotiating sponsors outside the UFC is greatly diminished.
These practices, in addition to acquiring other MMA leagues, have allegedly been used to remove rivals from the MMA market, leaving the UFC as the only option.
Possible Class Action?
The three fighters named in the suit, Cung Le and former fighters Jon Fitch and Nate Quarry, are not officially part of a class-action suit. Their lawsuit may become a class action if a court certifies the three plaintiffs, and the class of current and former UFC fighters they represent, as meeting the criteria for such a suit.