Judge rejects UFC class action settlement, sets new trial date

UPDATE with TKO response:UFC parent company TKO has slammed a Nevada judge’s decision today to reject its proposed class action settlement with former fighters.

“We clearly disagree with this ruling and believe it ignores the expertise of the attorneys on both sides, as well as the experienced and seasoned mediator – all of whom have decades of experience in antitrust litigation,” the Endeavor-owned company said in a statement this afternoon, emphasizing that the $335 million settlement announced in the spring was in the best interests of the athletes.

Its invalidation “prevents athletes from receiving what they believe is in their best interests and invalidates a highly negotiated settlement that, as plaintiffs’ counsel put it, “would be far superior to a typical antitrust class settlement” and “is an excellent outcome for the settlement classes by any traditional metric.”

“Furthermore, by taking the unusual step of rejecting the settlement at this preliminary approval stage, the judge is also denying the athletes the right to be heard at this crucial juncture in the case,” TKO said after Judge Richard Boulware of the U.S. District Court in Nevada rejected the settlement today.

This was revealed in late March, just before the April trial was set to begin. The judge also set a new trial date today for October 28, a setback for the mixed martial arts league run by Dana White.

A more extensive written order with justification should be issued in the coming days.

There are two separate class action lawsuits pending. Le v Zuffa — a grouping of five similar lawsuits — is the one set to go to trial. A status conference for both lawsuits, at which a trial date will be set, is scheduled for Aug. 19. A motion to dismiss in the Johnson case remains pending, and a trial date has not been set, TKO noted in an SEC filing today.

TKO shares, which fell earlier in the session after the verdict was announced, rose a hair just before the market close at around $110.

TKO said it is “considering all options, including, without limitation, an appeal, and has also begun discussions with plaintiffs’ attorneys who have expressed a desire to engage in separate settlement discussions in the Le and Johnson cases.”

The lawsuits were filed in 2014 and 2015 by fighters who claimed that the UFC violated the Sherman Antitrust Act by abusing its monopoly position to limit fighter compensation. UFC and TKO denied the claim. The company said in announcing the settlement that it planned to pay in tax-deductible installments.

Several former players who filed the lawsuit were pleased with the settlement. However, news reports today indicate that the judge may also be concerned about protecting current players in the future.

The original lawsuit against UFC alleged “an overarching anticompetitive scheme to maintain and enhance (a) a monopoly position in the Elite Professional Mixed Martial Arts (“MMA”) fight promotion market and (b) a monopsony position in the Elite Professional MMA Fighter services market.” It alleged that UFC eliminated “competition from potential rival MMA promoters by systematically preventing them from accessing resources critical to successful MMA promotions, including imposing extreme restrictions on the ability of potential rival UFC fighters to fight during and after their UFC careers. As part of this scheme, UFC not only controls the fighters’ careers, but also seizes and expropriates the rights to their names and likenesses in perpetuity. As a result of this scheme, UFC fighters receive a fraction of what they would earn in a competitive marketplace.”

The parties will meet for a status conference on August 19.