• Brett Podell

The UFC's Anti-Trust Headache



UFC Heavyweight champion Francis Ngannou’s unanimous decision win over Ciryl Gane on January 22, 2022 showed the casual UFC viewer a lot about a fighter who had previously been known as a “one-trick” knockout artist. Ngannou silenced all his doubters with a come-from-behind victory. The win was predicated on savvy wrestling ability that many believed to be absent from the champion's repertoire.


For the more attentive fan, this fight was much more than just twenty-five minutes in the octagon. Leading up to the main event of UFC 270, the fight itself had been widely overshadowed by contract complications raised by Ngannou.[1] Instead of promoting the fight against Gane, Ngannou looked towards his face off with the UFC and their questionable anti-competitive practices.[2]


During the fight's buildup, Ngannou shined a light on many predatory practices the UFC may have been attempting to force on him. Importantly, Ngannou revealed to the public that UFC President Dana White was encouraging Ngannou to fight the third ranked challenger, Derrick Lewis, just three months after winning the belt from then champion Stipe Miocic.[3] Amongst other things, the pressure from the UFC to participate in a fight with such short notice was alarming, especially in a business as potentially harmful as combat sports. Though Ngannou was directing attention towards the roadblocks preventing his contract extension with the UFC, he brought an open anti-trust lawsuit against the organization back to the forefront of the public eye.


In 2014, a collection of UFC fighters brought a class action suit against the UFC to challenge its alleged underhanded dealings.[4] The lawsuit claims the UFC used domineering strategies to corner the MMA market.[5] This, in turn, allowed the organization to pay their fighters substantially less than they would have otherwise, while also limiting their fighters' ability to make money from outside ventures.[6] By claiming that the UFC is implementing anti-competitive business tactics, the class of fighters suing the organization is alleging the largest MMA promotion in the world is both a monopoly and a monopsony.[7]


The link between Francis Ngannou’s contract dispute and the class action lawsuit against the UFC became more readily apparent as the champion’s fight against Gane neared. With intensifying rumors of Ngannou’s interest in fighting boxing star Tyson Fury, UFC President Dana White made a crucial misstep in the chess match that are contract negotiations.[8] When responding to a question from the media, White referred to the UFC’s “Champion’s Clause.”


The ”Champion’s Clause” is a stipulation placed in contracts that requires fighters who successfully obtain or defend a title to fight at least three additional fights.[9] This clause purports to give the UFC some security from a fighter winning a championship belt and then quickly deserting the title. The policy may sound innocent, but Ngannou and the class action lawsuit have raised its harsh effects.


Continued implementation of the “Champion’s Clause” has been touted as an anti-competitive business practice by the UFC.[10] In a sport where fighters square off in a caged octagon with the aim of submitting or knocking out their opponent, each bout can be a fighter’s last. The longevity of a fighter’s career and desire to maximize profits are put at odds when there is a mandate such as this clause. Champion's Clauses also prevent the UFC’s most marketable fighters, such as Ngannou, from competing for other promotions or pursuing other business ventures while still at the peak of their careers.[11]


Not only are UFC fighters asked to put their health at risk and fight more often than other combat sport athletes, they are also paid significantly less.[12] This is another key overlap between Ngannou and the class action fighters.[13] Both parties suggest the UFC has established a monopsony where it is the only legitimate buyer of elite MMA fighter services.[14] Though there are other credible promotions, none can compensate their fighters the way Dana White and the UFC can.[15] Using this information to its advantage, the UFC can get away with paying fighters only twenty percent of an event’s revenue.[16] In contrast, athletes competing in the NFL, NBA, NHL, and MLB earn close to fifty percent of the event revenues they generate.[17] Top level boxers can earn up to eighty percent.[18]


Currently, there are two open antitrust lawsuits against the promotion: one covering athletes who were injured by the anti-competitive nature of the UFC from 2014-2017, and another covering athletes injured from 2017 to the present day.[19] Interestingly, the first lawsuit has found more success than failure. Key wins, such as its successful motion to grant class certification and defeat of the UFC’s motion to dismiss and motion for summary judgment, have given the lawsuit hope.[20] However, the second lawsuit is running into its fair share of problems.


Though the original case seems to be a thorn in UFC’s side, Dana White and the promotion seem more than happy to take the second case into the discovery stages.[21] While it might have been true that elite level MMA was dominated by the UFC from 2014 to 2017, the UFC seems confident that the strides of promotions like ONE Championship, PFL, and Bellator support the notion that the UFC now has competitors.[22]


Ngannou has been vocal regarding his misgivings in contract negotiation, and the class action lawsuit continues to regain more traction in the media. Meanwhile, the UFC has chosen to navigate the choppy legal waters in silence. Theoretically, the jury is still out on the outcome of a case that could change UFC fighter pay for the better, but practically it seems the jury has yet to even be formed.[23] The collective eyes of the MMA world now turn to the lawsuit’s open demand for jury trial.[24] Until then, Ngannou’s contract extension, a potential jury trial, and the imminent free agency of the promotion’s top three money makers (Conor McGregor, Nate Diaz, and Israel Adesanya) only add to the UFC legal team’s growing headache.




References

[1] Emmanuel Morgan, The Fearsome, Quiet Champion, New York Times (January 21, 2022) https://www.nytimes.com/2022/01/21/sports/francis-ngannou-ufc-fight.html

[2] Marrocco & Martin, supra.

[3] Morgan, supra.

[4]Berger Montague PC, et al., 2022. UFC Antitrust Lawsuit, UFC ANTITRUST LAWSUIT (11 February 2022) https://www.ufcclassaction.com/

[5] Id.

[6] Id.

[7] Id.

[8] Morgan, supra.

[9] Brent Brookhouse, UFC 270 Fighter Pay Draws Criticism a Francis Ngannou Prepares to Sit Out, CBS Sports (January 23, 2022) https://www.cbssports.com/mma/news/ufc-270-fighter-pay-draws-criticism-as-francis-ngannou-prepares-to-sit-out-i-dont-feel-like-a-free-man/#:~:text=Ngannou%20made%20it%20clear%20before,champion's%20contract%20after%20a%20victory.

[10] Berger Montague PC, supra.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Paul Gift, UFC Wants Follow-On Antitrust Lawsuit Dismissed, Forbes (January 20, 2022) https://www.forbes.com/sites/paulgift/2022/01/20/ufc-wants-follow-on-antitrust-lawsuit-dismissed/?sh=7ccf4c796485

[22] Id.

[23] Berger Montague PC, supra.

[24] Id.