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TKO Settles Antitrust Lawsuit Against UFC For $335 Million
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TKO Group has settled an antitrust lawsuit against the UFC for $335 million. The lawsuit was originally filed back in 2014 and alleged that the UFC participated in anti-competitive practices that hindered fighters.
TKO Group revealed in an SEC filing dated March 13th that the lawsuit was settled for $335 million. The lawsuit, which was filed by a group that included Cung Le, Nate Quarry, Jon Fitch, Brandon Vera, Luis Javier Vazquez and Kyle Kingsbury, had been seeking $800 million to $1.6 billion in damages.
The filing notes that the company expects the settlement amount to be tax-deductible and reads as follows:
As previously disclosed, TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC) (“TKO OpCo”), a subsidiary of TKO Group Holdings, Inc. (the “Company”), and/or certain of its affiliates, including Endeavor Group Holdings, Inc., TKO OpCo’s ultimate parent entity (collectively, “TKO”), are party to several substantially similar class-action lawsuits filed against them by former UFC athletes, alleging violations of Section 2 of the Sherman Act. Five related class-action lawsuits filed between December 2014 and March 2015 were consolidated into a single action in June 2015, captioned Le et al. v. Zuffa, LLC, No. 2:15-cv-1045-RFB-BNW (D. Nev.) (the “Le” case), and an additional lawsuit, captioned Johnson et al. v. Zuffa, LLC et al., No. 2:21-cv-1189-RFB-BNW (D. Nev.) (the “Johnson” case), was filed in 2021.
On March 13, 2024, TKO reached an agreement to settle all claims asserted in both class action lawsuits (Le and Johnson) for an aggregate amount of $335 million payable by the Company and its subsidiaries in installments over an agreed-upon period of time. The terms will be memorialized in a long form agreement and then submitted to the court for approval. The Company anticipates that the settlement amount will be deductible for tax purposes.
The information in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
TKO’s stock jumped today following news of the settlement, closing at $87.37 which is up $6.35 (7.84%). It’s up an additional $0.05 (0.06%) in after-hours trading.