Las Vegas Union Urging FTC To Investigate UFC and Strikeforce Parent Company
By FCF Staff
Earlier today, Yahoo! Sports reported that the Culinary Workers Union, Local 226, in Las Vegas, sent a letter to the Federal Trade Commission, urging the government agency to launch an investigation into whether or not the business practices of Zuffa, LLC, the parent company of the Ultimate Fighting Championship (UFC) and Strikeforce, violate United States anti-trust laws.
FCF obtained a copy of the letter, dated Aug. 31, 2011, which cites a 2008 independent equities research firm’s findings that Zuffa controls between 80 and 90 percent of the MMA market. The union letter insists that MMA fighters’ “freedom of movement” is severely limited due to Zuffa’s dominant market position and goes on to cite three provisions in Zuffa’s fighter contracts as evidence of this claim:
1 - ”Automatic renewal” contract provisions, including the ”champion’s clause,” which extends the contract of an athlete who becomes champion. The letter argues that such provisions prohibit Zuffa contracted fighters from becoming free agents or negotiating for higher pay.
2 – Exclusive negotiation and “right to match” clauses that “lock athletes into negotiating with Zuffa for a period after their contracts have expired.” The letter argues that these “clauses diminish the ability and incentive of smaller promoters to bid for top mixed martial arts athletes.”
3 – Merchandise and ancillary rights agreements that require fighters to “forfeit their image and likeness rights” forever.
The Yahoo! Sports report asserted that the union’s real motive is a long-standing issue it has had with Zuffa’s majority owners, Lorenzo and Frank Fertitta, who also own Station Casinos, one of the largest non-union casino companies in the world.
FCF reported on Aug. 22 that Zuffa has retained the services of Axinn-Veltrop-Harkrider, LLP, a New York City-based law firm specializing in anti-trust litigation, as defense against an on-going FTC investigation into Zuffa’s acquisition of Strikeforce, formerly the number one competitor of UFC>