clock menu more-arrow no yes mobile

Filed under:

UFC, fighters prepare for hearing to dismiss antitrust lawsuit

The UFC will attempt to have the antitrust lawsuit filed by current and former fighters thrown out of Las Vegas federal court tomorrow. Bloody Elbow’s resident economist and former antitrust practitioner tells us what to expect.

Josh Hedges Zuffa LLC

So you want to f***ing sue the UFC? The first major hurdle to clear is its motion to dismiss your lawsuit. That's what's at stake in Las Vegas tomorrow for the 11 current and former UFC fighters suing the company for anticompetitive business practices. A hearing on the motion to dismiss will be held at 3pm local time.

In June, the UFC succeeded in its quest to have the lawsuit transferred from Northern California to Nevada. Tomorrow marks the first major hearing for the case in its new home and with its new presiding judge, Richard Boulware.

Back in San Jose when the parties argued the UFC's motion to transfer, it became clear there was a key area of particular interest to the judge and fighter attorney Joseph Saveri was having a tough time making his argument (that contract terms would not need to be interpreted). A few weeks later, the judge transferred the case to Nevada. So while there may not be a final ruling at the conclusion of tomorrow's hearing, every question or comment the judge makes should provide a peek into his approach to the case and where his mind's at on critical issues.

Court rules prohibit audio and video recordings as well as the use of Internet or wireless services while court's in session so live updates won't be possible. I'll be in attendance at the hearing to observe and take notes and will post an update immediately afterwards, likely sometime around 4pm local time.

Here's a brief summary of the lawsuit and what to expect from both sides tomorrow.

The lawsuit alleges anticompetitive conduct in the mixed martial arts input market for fighter services and output market for entertainment, sponsorship and TV distribution. The plaintiffs are fighters who claim the UFC used long-term exclusive contracts to raise rival MMA promoters' costs, thereby allowing the UFC to acquire and maintain market dominance. The contracts in question are those with fighters, venues, sponsors and TV networks. Plaintiffs also claim UFC acquisitions helped to enhance its dominance even more. For more specifics, Bloody Elbow has previously broken down the fighters' allegations in excruciating detail.

One point of agreement for both sides is that in order to win their case the fighters will eventually have to show that the UFC (1) possessed monopoly or monopsony power, (2) willfully acquired or maintained that power through exclusionary conduct and (3) caused antitrust injury.

Tomorrow the UFC will argue that the fighters' complaint does not meet the tightened "plausibility" pleading standard from the Supreme Court case: Bell Atlantic Corp. v. Twombly. UFC attorneys will press the position that the fighters didn't make enough factual allegations to state a plausible claim for antitrust relief. This is a tougher burden to meet than merely having to make a possible or conceivable claim. Throughout its motion to dismiss, the UFC focuses on the fighters' lack of facts and specificity in claims regarding "indefinite" contract length, "top" venues and "key" sponsors. It calls the fighters' claims "implausible and without factual foundation."

The UFC also attacks the fighters' relevant market, claiming they "invented the term ‘Elite Professional MMA Fighter'" and selected a market that's "artificially narrow." The larger the UFC can make the market, the less harmful its conduct will appear. Finally, the UFC will argue the fighters' haven't put forth any facts showing that signing over their identity rights has had an adverse effect on competition.

While the UFC's goal is to win the motion to dismiss outright, it would also be happy to narrow down some of the fighters' claims or cause the fighters to amend their complaint with more specific allegations that can be used against them at a later date. In the worst-case scenario, the UFC can use this motion to introduce the judge to its positions and warm him up to arguments he'll hear down the line as the case progresses.

The fighters will argue that they've made specific, plausible allegations through "(1) circumstantial evidence about the structure of the market and (2) direct evidence of injury to competition" and they don't necessarily have to provide specific facts or numerical precision at this stage of the case.

Fighters believe the distinction between elite and non-elite MMA fighters isn't subjective and is well understood in the industry by sponsors, media outlets and fans. They'll claim they've sufficiently plead facts regarding the UFC's foreclosure of all competition ("100% is a number"), its dominant market share ("virtually all") and the length of the UFC's exclusive contracts ("effectively indefinitely").

To help solidify their position even more, it's a virtual lock that fighter attorneys will use tomorrow's hearing to begin exposing the judge to The Carlos Newton, which is the notion that UFC conduct must be examined as a whole rather than looking at each element separately in isolation. This is a very important part of their case considering that certain individual claims might be somewhat thin on their face (e.g., UFC restrictions on rival MMA promoters' access to sufficient venue space or television networks).

For more details on the motion to dismiss, check out our prior coverage of the UFC's original filing as well as the fighters' response.

Tomorrow could be a big day for the UFC or it could be the first major hurdle cleared for the fighters as all elements are denied. We won't know until everything plays out so come back around 4pm PT for an update as soon as the hearing concludes.

Paul is Bloody Elbow's analytics writer and former provider of expert witness support in antitrust cases. Follow him @MMAanalytics.