What the proposed $375 million UFC antitrust settlement means

This is the end of the beginning rather than the beginning of the end.

Seth Krauss, Chief Legal and Administrative Officer at TKO.

On Thursday morning, TKO filed an 8k with the Securities and Exchange Commission to announce a newly proposed $375 million dollar antitrust settlement with the Cung Le class of UFC fighters who fought for the promotion between December 16th, 2010 and June 30th, 2017.

“The Company anticipates that the settlement amount will be deductible for tax purposes.”

I’m fascinated by TKO’s obsession with this antitrust settlement being tax deductible. For the average person in bankruptcy court because of a financial judgment as a result of an intentional tort, good luck getting that discharged.

Of course, it’s Ari Emanuel’s world and we’re just living in it.

The major change this new $375 million dollar UFC antitrust settlement proposes is that it covers the Cung Le class and not the Kajan Johnson class of fighters who have signed agreements under Endeavor ownership that contain both arbitration clauses and class action waivers.

The top line story from this new proposed settlement of $375 million in the UFC antitrust case to settle the Cung Le class is that it’s a 20% cash increase for the Le class and leaves the Kajan Johnson case intact for pending litigation. That’s probably the best sales pitch both parties could advertise.

What are the prospects of Judge Boulware approving the newly proposed $375 million dollar antitrust settlement?

There are the legal questions. And then there are the financial questions. A much more critical financial question should now be raised.

When TKO Chief Operating Officer Mark Shapiro assured investors on a September 11, 2024 call with Goldman Sachs that the company “wouldn’t be writing a bigger check” (to settle with fighters), was Mr. Shapiro aware of these settlement negotiations?

It is time to ask some very serious questions for both Endeavor and TKO executives.

Given today’s $375 million dollar UFC antitrust settlement announcement by TKO, did Endeavor and TKO COO Mark Shapiro communicate a materially false statement to investors on the Goldman Sachs conference call?