The obstacles to UFC fighters’ unionisation

Published 26 August 2017 By: Jacob Debets

MMA fighters in smokey background

This article examines the prospect of Ultimate Fighting Championship (UFC) fighters forming a certified trade union and entering into collective bargaining with the UFC.

  • It first provides an overview of the UFC’s development from fringe spectacle to mainstream sport and the current economic relationship between the promotion and fighters.
  • It then provides a history of unionisation efforts, before assessing the legal obstacles fighters must overcome in order to get the UFC to the bargaining table.
  • It concludes with a discussion of the Muhammad Ali Expansion Act, [1] which would extend economic protections that apply to professional boxers to their counterparts in Mixed Martial Arts (MMA),[2] and is seen by many as a legislative alternative to labour organising.

 

THE POLITICAL ECONOMY OF ULTIMATE FIGHTING

Historical Origins

The UFC was founded in 1993, and was originally structured as an eight-man, single elimination tournament that would match fighters from different martial arts disciplines to determine which was the most effective.[3] This was developed into a television franchise with the Semaphore Entertainment Group (SEG), with fighters competing for a “winner takes all” tournament prize of $50K, in addition to a smaller guaranteed sum (as little as $1K) just for competing.[4] The tournament format was eventually abandoned in the late 1990s and replaced with single matches as in boxing, [5] with fighters today typically fighting for roughly equivalent sums to compete (“show money”) and win (“win bonus”), in addition to discretionary bonuses.[6]

Despite the initial financial success of the franchise, the “no-rules, anything goes, judge-free” nature of the competition[7] provoked the chagrin of Republican Senator John McCain, who led a campaign to have the sport banned across the United States in the late 1990s.[8] This eventually forced the SEG to sell the company to Zuffa L.L.C in 2001, who are credited with facilitating MMA’s evolution “from a violent spectacle into a legitimate, controlled sport”, by instituting a set of unified rules and safety regulations and successfully lobbying to have the sport sanctioned throughout North America and internationally. [9]

The Zuffa Era & Antitrust Lawsuit

From 2005 to 2011, the UFC under Zuffa enjoyed meteoric commercial success, launching a hugely successful reality series The Ultimate Fighter (In which fighters compete in a tournament with the end winner securing a contract to fight within the UFC promotion) and a videogame with EA Sports, overtaking boxing and wrestling in pay-per-view ratings[10]  and acquiring lucrative broadcast deals with Fox Sports and Brazil’s Globo and Globosat. [11]  Over this period, the UFC was also able to gain a “virtual monopoly” over the MMA industry, purchasing competitor promotions Pride FC, Strikeforce and the World Extreme Cage Fighting Championship, and with them the majority of the world’s best fighters.[12] This led to a class-action antitrust lawsuit being filed by a number of former UFC fighters in 2014, alleging multiple instances of anticompetitive conduct, which is currently being heard in the U.S. district court.[13]

Fighter Pay & Coercive Contracts

The UFC’s chokehold over the MMA industry has allowed the UFC to pay its fighters a pittance compared to many other professional sports. By comparison to boxing, where a revenue split of 70/30 in favour of the fighter is common,[14] in the UFC the split is 85/15 in favour of the promotion, with the it being report that over 2013-2015 the median sum received by UFC fighters was $30K per bout. [15]

In addition to low pay, the UFC also reportedly requires its athletes to sign long-term contracts[16] that contain a number of terms severely limiting fighters’ negotiating power.[17] This includes clauses:

  • which automatically extend a fighter’s contract if they hold a championship title;

  • that allow the UFC to retain to right to a retired fighter in perpetuity;

  • that require fighters to “cooperate and assist” in promoting their bouts and the UFC brand without additional compensation (famously invoked to remove Conor McGregor from his rematch bout with Nate Diaz at UFC 200 after he skipped a press conference);[18]
  • that give the UFC the “unrestricted right” to exploit the fighter’s name, image and likeness in perpetuity (for example, by using fighters as characters in UFC video games and other content); and

  • that allow the UFC to terminate a fighter’s contract for a myriad of infractions including – somewhat extraordinarily – losing a fight. [19]

Sale to William Morris Endeavours

On 11 July 2016, UFC President Dana White announced the promotion had been sold for US$4.2B to talent agency William Morrison Endeavours (WME). At the time of writing, it remains the largest sale of a sports franchise ever, dwarfing the $2b the Los Angeles Clippers was acquired for in 2014 and the $1.4b Manchester United sold for in 2012. Dana White has remained in his position of his president of the organisation, although CEO Lorenzo Fertita (who formerly owned 90% of shares in the UFC with his brother Frank Fertita III) and a number of senior managerial staff departed.[20]

 

A HISTORY OF UNIONISATION EFFORTS

Ad Hoc Unionisation in the 1990s

Attempts by fighters to band together in order to secure better wages and conditions from the UFC are almost as old as the promotion itself. In 1996, just three years after the first UFC show ever, four of the 13 fighters competing at “Ultimate Ultimate 1996” threatened to withdraw from the event unless they received higher guaranteed bout purses, forming a “quasi-union” under the direction of sports agent and lawyer Robert DePersia, that endured for much of the late nineties.[21]

The Mixed Martial Arts Fighters Association

Various fighters, including then-light heavyweight champion Tito Ortiz,[22] continued to agitate for unionisation after the promotion was purchased by Zuffa, though the first formal association, the Mixed Martial Arts Fighters Association (MMAFA), wasn’t formed until 2008. In 2015, the MMAFA partnered with two national unions, UNITE HERE and Teamsters, to organise fighters,[23] however were unsuccessful largely because of their association with Culinary Union 226, an affiliated organisation that had opposed legislation sanctioning of MMA in New York.

Unionisation in the Wake of the WME Purchase

When the UFC was sold, the prospect of a fighters union again began to gain traction. Whereas UFC President Dana White and former CEO Lorenzo Fertita respectively reportedly made $360M and $1.6B[24] on the sale, many of its fighters must work full or part time jobs in order to supplement their meagre fighting income – prompting a groundswell of support amongst fighters and the mainstream media for a revised revenue sharing model.

In August 2016, two months after the sale was announced, the Professional Fighters Association (PFA) emerged under sports-agent Jeff Borris, with the explicit intention of approaching the National Labor Relations Board (NLRB) to become a certified union and pursuing collective bargaining.[25] Its list of demands includes increases in base pay from $10K/$10K to $25K/$25K, comprehensive health insurance for fighters and their families, an experience based pension system and a dispute resolution process involving an independent arbitrator. [26]

The PFA was followed by the Mixed Martial Arts Athletes Association (MMAAA), which emerged in November and is spearheaded by active UFC fighters and former MMA promoter Bjorn Rebney. Broadly, the MMAAA are seeking the same improvements to pay and conditions as the PFA, as well as a settlement on behalf of past fighters who have been exploited, but have paradoxically stated that they will not seek to become a certified union or pursue litigation.[27] This has led some commentators to speculate the organisation is angling to create a MMA promotion to rival the UFC.[28]

Barriers to Unionisation – Factionalism & Individualism

Regrettably (but perhaps predictably), the fragmentation of fighter loyalties across three different fighter associations has ensured that none have made any significant gains on behalf of the athletes they purport to represent. This has been exacerbated by the highly individualised (and globalised) nature of MMA competition by comparison to team-based national sports, where players unions are more common.[29] As observed by Nash:

[U]nlike in baseball or football, the athletes of MMA do not have the luxury of being together during pre-season and the long extended regular season... Instead, the UFC has a roster of active fighters spread across the far reaches of the globe, who rarely see each other outside of a handful of fellow UFC fighters in their gym or camp…Convincing and obtaining the signatures of thirty percent of [these fighters]… is nothing short of a herculean task.[30]

 

LEGAL OBSTACLES TO UNIONISATION 

Organising under the National Labor Relations Act

The majority of UFC fighters, [31] and the majority of UFC events,[32] are based in the United States, so it is unsurprising that organising efforts have largely been directed towards becoming a certified union under the National Labor Relations Act (NLRA).[33]

The process for forming a registered union is comprised of three steps: (1) the organisation must petition the appropriate Regional Office of the NLRB and show that at least 30% of employees in the “bargaining unit” are interested in having an election; (2) the Regional Office must determine that it has jurisdiction to conduct the secret-ballot election; and (3) a majority of fighters must vote in favour of an organisation representing them.[34]

Are Fighters “employees”? Applying the NLRA’s Multifactor Test

The first (and most contentious) legal obstacle to unionisation is fighters’ contractual status as independent contractors.[35] Under the NLRA, only “employees” have the right to “form, join, or assistant labor organisations [and] to bargain collectively”, [36] meaning that the NLRB would first need to be satisfied that fighters meet this definition (and have therefore been misclassified under their contracts) in order to exercise its jurisdiction (step 2 above). As recently reformulated by the NLRB in FedEx Home Delivery v National Labor Relations Board 361 NLRB No. 55 (Sep. 30, 2014), there are eleven factors that are relevant to this determination, which are guided by the Restatement (Second) of Agency § 220 (1958).[37]

Keeping in mind that the NLRB has seemingly become “politicized and polarized[38] as a result of partisan presidential appointments (the result being that the current, Republican-controlled board is less likely to find in favour of fighters than a Democrat-controlled one),[39] the relevant factors, which look to the extent of the putative employer’s (legal and practical) control over it’s workers, strongly support the proposition that fighters are employees of the UFC.[40]

For example, in addition the highly restrictive contracts the UFC uses, the promotion exercises near unilateral power over matchmaking, fighter rankings and fight bonuses;[41] and has recently enlarged its control over fighters by implementing a drug-testing policy (operated by US Anti-doping Agency (USADA))[42] and a restrictive sponsorship regime (the Reebok Apparel Deal).

Under UFC’s United States Anti-Doping Agency (USADA) regime for example instituted in 2015, fighters must notify the anti-doping agency of their whereabouts at all times, and subject themselves to random blood and urine testing in or out of competition, on threat of sanctions.[43]

Under the Reebok Apparel deal (also introduced in 2015), fighters are required to wear fighter uniforms in competition and during promotional activities, [44] ending the practice of fighters displaying external sponsors in exchange for a small stipend connected to their UFC tenure.[45] This has severely constrained fighters’ “entrepreneurial opportunity” (of the 11 factors the NLRA consider under the common law test), [46] with some losing hundreds of thousands of dollars per year.[47]

International dimensions

If the NLRB is satisfied that UFC fighters are employees, it does not follow that all fighters would be beneficiaries of any ensuing collective bargaining process. This is because under Section 9(b) of the NLRA, the board must make a determination as to the appropriate “bargaining unit” to be represented by the union,[48] and NLRB case law is not entirely clear whether the statute has extraterritorial application.[49] Given that a considerable number of fighters on the UFC’s roster are not based in the United States and compete on shows outside its borders, this could significant limit the efficacy of unionisation.

Conceivably, in the long-term non-US fighters may form associations or unions in their own countries, and come together under a global federation – such has been the case for athletes in other international sports such as golf and cricket – however this would require leadership and coordination that has so far been sorely lacking.[50]

 

A LEGISLATIVE ALTERNATIVE: THE EXPANSION OF THE MUHAMMAD ALI BOXING REFORM ACT 

Overview of the Legislation

For the time being, the most feasible means of levelling the playing field between the UFC and its athletes is through the expansion of the Muhammad Ali Boxing Reform Act (Ali Act) to cover MMA.[51]  The Ali Act was enacted in 2000 in order to prevent boxing promoters from engaging in many of “exploitative, oppressive or unethical business practices” the UFC currently engage in, with Congress reasoning that because the sport lacked a central governing body (such as in most professional team sports) and state regulation was often inconsistent and ad hoc, federal intervention was required.[52] The legislation prohibits “coercive contracts” between boxers and promoters,[53] in addition to imposing obligations on promoters and state athletic commissions in relation to financial disclosures, minimum contractual provisions and the creation of an independent rankings system to determine championship fights.[54] Together, these provisions give boxers much more freedom and control over their careers, and mitigate the potential for exploitative conduct on behalf of promoters.

The Ali Expansion Act 

A bill to expand the Ali Act to MMA (the “Ali Expansion Act”) was introduced into Congress on 26 May 2016 by Republican Congressman Markwayne Mullin, who pointed to the historical similarities between the two sports and the need for consistency in the combat sports industry.[55]  If passed, the legislation would potentially weaken the UFC’s position in the MMA industry, rendering void some of the more oppressive contractual clauses (such as the retirement and championship clauses)[56] and making it much easier for the sport’s top athletes to negotiate higher bout purses from the UFC, or from competitors on the free market. The promotion would also be decoupled from its championship titles (which are currently in-house and controlled by the company), meaning that incumbent champions would have to fight the number #1 contender, rather than challengers selected by the UFC.

Deficiencies of the Legislation

Despite the theoretical benefits of the Ali Expansion Act, it has in the author’s opinion proven incapable of restoring integrity to the boxing industry and is unlikely to assist the majority of UFC fighters unless accompanied by an effective and well-resourced fighters association or certified union.[57] This is in largely because of limited nature of the obligations imposed on state athletic commissions,[58] and the failure of public actors such as State Attorney Generals and the federal Department of Justice to use their powers under the Act to prosecute actors for contraventions.[59] This has effectively required boxers to invoke the limited protections through their private right of action, leading to only a handful of lawsuits in the statute’s 17-year.[60]

In MMA’s case, the legislation is therefore likely to only provide recourse to high profile athletes such as Conor McGregor and Georges St Pierre, who have the resources to fund litigation and the star power to receive large sums of money competing outside the UFC; whilst the majority of the promotion’s fighters would be deterred – at least in the short term – from filing suit in fear that it would lead to them being blacklisted by the promotion[61] or alternatively being offered only unfavorable matchups.[62]

It follows then that unionization, with or without the Ali Act, is still something worth fighting for.

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Author

Jacob Debets

Jacob Debets

Jacob is a freelance writer and recent JD graduate from Melbourne Law School. He will be commencing as a trainee lawyer in 2019 for Arnold Bloch Leibler, in their Workplace Advisory team. In the interim, he is working on a book analysing the economic relationship between the UFC and its athletes, as well as academic papers on the influence of technology on legal education, and the labour dimensions of the "gig economy". You can view more of his writing at jacobdebets.com.

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