Jake Rothstein
In 2014 several former UFC fighters brought a class action lawsuit against Zuffa, LLC (The Ultimate Fighting Championship or UFC),[1] alleging that the organization has maintained monopoly power over the mixed martial arts (“MMA”) market through a pattern of anticompetitive behaviors, in violation of the Sherman Antitrust Act.[2] As part of this allegedly anticompetitive scheme, the UFC has incorporated into their contracts an “Exclusivity Clause” to lock fighters into long-term contracts that can be terminated at the organization’s discretion, a “Right to First Offer,” allowing the UFC to match their competitors’ offers to fighters after contract expiration, and an “Ancilliary Rights Clause,” granting the UFC exclusive rights in perpetuity to the likenesses of fighters and “all persons associated” with them for commercial purposes, such as merchandising, videogames, and broadcasts.[3] This control over athletes does not end even after they retire from the sport as the “Retirement Clause” gives the UFC the power “to retain the rights to a retired fighter in perpetuity.”[4] As alleged in the suit, the UFC has used these anticompetitive practices to eliminate competition in the MMA market, allowing them to artificially suppress fighter pay and expropriate their likenesses for commercial gain.[5] In professional sports leagues, such as the NFL, NBA, NHL, MLB, and various boxing promotions, athletes receive around fifty percent of the revenue in compensation, while allegedly the UFC only pays their fighters as little as 20 percent, a significant deviation from the average revenue split in professional sports organizations.[6]
This suit survived a motion to dismiss in 2016,[7] and at the end of 2020, the Court announced that they intend to certify a class where the named plaintiffs represent all fighters competing in the promotion from December 16th, 2010 to June 30th, 2017. Recently, two more athletes filed a nearly identical suit seeking to represent a class of fighters competing from July 31st, 2017 to the present, effectively further expanding the pool of fighters represented.[8]
While it is unclear how the Court will rule, the high-profile allegations of unfair treatment of fighters and anticompetitive practices might spur Congress to expand the Muhammad Ali Boxing Reform Act (“Ali Act”) to apply to MMA. The Ali Act was enacted in 2000 to “protect the rights and welfare of professional boxers on an interstate basis by preventing certain exploitive, oppressive, and unethical business practices.” It was enacted in response to the excesses of a largely deregulated market tainted by “restrictive and anticompetitive business practices of certain promoters.”[9] In 2016, Congressman Markwayne Mullin introduced a bill to expand the Act to include MMA, and the recent high-profile litigation might give the bill the traction it needs to achieve Congressional approval.[10]
One notable change resulting from applying the Ali Act to MMA would be that the UFC would be required to publicly disclose their revenues and fighter pay. This increased transparency would empower athletes to negotiate contracts with the organization on more equal footing.[11] Another change would be that fighter rankings would be set by an independent commission. The Ali Act framers found that boxing promoters’ “ratings are susceptible to manipulation, have deprived boxers of fair opportunities for advancement, and have undermined public confidence in the integrity of the sport.”[12] Currently the UFC unilaterally sets their own rankings and often does not even follow them when deciding the next contender to challenge the champion. [13] After the Act’s implementation, champions would be required to defend their belts annually against the number sanctioning body’s designating number one contender, creating a more meritocratic competitive landscape and potentially facilitating cross-promotional bouts between UFC fighters and those of their competitors.
However, the Ali Act is not a perfect solution. The UFC regularly holds events internationally, where it does not apply, and this might incentivize the organization to skirt regulation by increasing their foreign presence.[14] Additionally, the Act has never been enforced against a boxing organization and has subsequently lost much of its regulatory power.[15] Thus, there is a strong possibility that the act will be similarly impotent in curbing the unfair treatment of fighters.
Under the looming shadow of class action lawsuits, Congress might be incentivized to revisit and potentially pass the 2016 Ali Act amendment. However, it is foolish to believe this will be a perfect solution for protecting the rights of athletes. Instead, it is one step forward on a longer journey towards greater equity.
[1]UFC Fighter Class Action Lawsuit, UFC Antitrust Lawsuit, https://perma.cc/VFJ5-9G74 (last visited Oct. 18, 2021).
[2]Le v. Zuffa, LLC, 216 F. Supp. 3d 1154, 1159 (D. Nev. 2016).
[3]Id. at 1167.
[4]Id. at 1168.
[5]Id. at 1169.
[6]UFC Fighter Class Action Lawsuit, supra note 1.
[7]Le at 1170.
[8]UFC Fighter Class Action Lawsuit, supra note 1.
[9]H.R. 1832, 106th Cong. (2000) (enacted).
[10]Philip O’Connor, Bellator Would Welcome Boxing Act in MMA Says CEO, Reuters (Feb. 18, 2021), https://perma.cc/GWG9-U3W7.
[11]Jacob Debets, Debets: How the Ali Act Could Reshape MMA in 2018, Sherdog (Jan. 4, 2018), https://perma.cc/4D7U-WPXY.
[12]H.R. 1832, 106th Cong. (2000) (enacted).
[13]Brett Okamoto, Ali Act Amendment Could Expand Federal Law’s Coverage to MMA, ESPN (May 18, 2016), https://perma.cc/FV3D-T8SR.
[14]Cristina E. Groschel, Down for the Count: The Muhammad Ali Boxing Reform Act and Its Shortcomings, 26 Nova L.R. 928, 950 (2002).
[15]Thomas Hauser, No One is Enforcing the Federal Boxing Laws, ESPN (Sept. 25, 2007), https://perma.cc/6SM7-YDGB.