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Tuesday, December 16, 2014
On this edition of No Holds Barred, host Eddie Goldman presents the complete audio from the news conference held Tuesday, December 16, in San Jose, California, announcing a class-action lawsuit by three current and former MMA fighters against the Ultimate Fighting Championship (UFC) alleging illegal market monopolization.
We expect to cover this more in depth shortly. Here is the official news release announcing this suit:
Mixed Martial Arts Fighters File Class-Action Lawsuit Against Ultimate Fighting Championship Alleging Illegal Market Monopolization
(SAN JOSE, Calif. –Dec. 16, 2014) Three current and former high-profile Mixed Martial Arts (MMA) fighters filed a multi-million-dollar class-action lawsuit today against the Ultimate Fighting Championship (UFC) organization, accusing the $2-billion outfit of illegally maintaining monopoly and monoposony power by systematically eliminating competition from rival promoters, artificially suppressing fighters’ earnings from bouts and merchandising and marketing activities through restrictive contracting and other exclusionary practices.
The civil action – Cung Le, et al. v. Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC – filed today in the U.S. District Court for the Northern District of California in San Jose, seeks treble damages and injunctive relief under the Sherman Antitrust Act stemming from the UFC’s alleged “over-arching, anti-competitive scheme to enhance its monopoly power” in the market for promotion of live Elite Professional MMA bouts, and monopsony power in the market for live Elite Professional MMA Fighter services in the U.S. Monopsony refers to when there are many “sellers” and few “buyers” in the marketplace.
The lawsuit filed by fighters Cung Le, Nathan Quarry and Jon Fitch, who seek to represent a class of similarly situated current and former UFC professional combatants, alleges that the plaintiffs are victims of the UFC’s illegal scheme to eliminate its competition in the sport of MMA and suppress compensation for UFC Fighters from bouts and fighter identities and likenesses.
According to plaintiffs’ counsel Benjamin Brown, of Cohen Milstein Sellers & Toll PLLC, “The UFC was built on the battered bodies of MMA fighters who have left their blood and sweat in the Octagon. Those fighters are entitled to the benefits of a competitive market for their talents.”
The lawsuit targets defendants Zuffa LLC, the Las Vegas-based company that conducts business as the UFC. Zuffa is primarily owned by billionaires Lorenzo and Frank Fertitta, along with the UFC’s front-man, President Dana White. White has publicly boasted about the success of the UFC’s alleged illegal scheme, allegedly claiming that “there is no competition” because “I am the grim reaper[.]”
The lawsuit claims that the UFC’s alleged anti-competitive acts, in particular its actions over a period of years, have made and maintained the UFC as the only option for MMA fighters who want to earn a viable living in the profession.
“All UFC Fighters are paid a mere fraction of what they would make in a competitive market,” said Brown. “Rather than earning paydays comparable to boxers – a sport with many natural parallels – MMA fighters go substantially under-compensated despite the punishing nature of their profession.”
Above all, the lawsuit alleges that the UFC prevents fighters from working with other MMA promoters, mounting self-promotional efforts of their own or signing with outside sponsors – monopolistic practices that suppress fighters’ incomes.
According to named plaintiff Cung Le, of San Jose, Calif., an internationally acclaimed MMA combatant, “Because of the UFC’s coercive practices, competitive market forces have been strangled, future earnings power of the athletes is stripped away, and purses to the fighters are artificially depressed.”
Plaintiffs’ co-counsel and sports law specialist Robert Maysey, of Warner Angle Hallam Jackson & Formanek PLC, added, “As a result of the UFC’s illegal conduct, they have become the only game in town and locked down the entire sport. It is ironic that the fiercest combat athletes in the world have, until now, been powerless to take on the UFC.”
The lawsuit alleges that the UFC has pursued an aggressive strategy of depriving key inputs to potential rival promoters or merging with them to maintain its monopoly position. The complaint alleges “exclusionary scheme” to impair and foreclose competition, whereby the UFC deprives potential competitors in the fight promotion market access to elite MMA fighters, premium live event venues and sponsors.
According to plaintiffs’ co-counsel Michael Dell’Angelo, of Berger & Montague, P.C., “the lawsuit alleges that the UFC has engaged in an illegal scheme to eliminate competition from rival MMA promoters by systematically preventing rivals from gaining access to ingredients critical to successful MMA promotions, including by imposing extreme restrictions on UFC Fighters’ ability to fight for rivals during and after their tenure with the UFC. The UFC also takes the rights to fighters’ names and likenesses in perpetuity. As a result of the UFC’s scheme, we allege that UFC Fighters are paid fraction of what they would earn in a competitive marketplace.”
The lawsuit alleges that as a result of these and other anti-competitive acts, including the UFC’s acquisition of rival Strikeforce, the UFC has maintained control of more than 90 percent of the revenue derived from live MMA bouts nationwide.
The lawsuit also alleges that the UFC has retaliated against fighters who have worked with or who have announced intentions to work with rival promoters or sponsors by refusing to book their bouts and/or eliminating them from key UFC promotional activities such as advertising campaigns and video games.
“UFC’s threats are taken seriously by fighters because they know that a UFC ban will substantially diminish, if not end, their ability to earn a living at their chosen profession,” said plaintiffs’ co-counsel Joseph Saveri of Saveri Law Firm, Inc. “These MMA professionals deserve the right to take back their careers.
The plaintiffs are represented by nationally respected antitrust litigation firms Cohen Milstein Sellers and Toll PLLC, Berger & Montague, P.C., Joseph Saveri Law Firm, Inc. and Warner Angle Hallam Jackson & Formanek PLC.
For more information about Cung Le, et al v. Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC, visit http://www.cohenmilstein.com/news.php?NewsID=742.
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