01—Abstract
Summary
Summary of the 8-K filed March 20, 2024. Cited figures are marked; the original filing is the authoritative source.
TKO Group Holdings, Inc. filed this Current Report on Form 8-K under Item 7.01 (Regulation FD Disclosure) on March 20, 2024 to disclose the settlement of two class-action lawsuits brought by former UFC athletes alleging violations of Section 2 of the Sherman Act.
The lawsuits are the Le case, consolidated in June 2015 from five related class actions filed between December 2014 and March 2015, and the Johnson case, filed in 2021. Both suits name TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC), a subsidiary of the Company, and/or certain affiliates, including Endeavor Group Holdings, Inc., TKO OpCo's ultimate parent entity. On March 13, 2024, TKO reached an agreement to settle all claims in both the Le and Johnson cases for an aggregate amount of $335 milliona, payable by the Company and its subsidiaries in installments over an agreed-upon period.
The terms are to be memorialized in a long-form agreement and then submitted to the court for approval. The Company anticipates the settlement amount will be deductible for tax purposes.
The filing is a regulatory disclosure rather than a financial results release, and it contains no other financial figures. It also states that the information is not deemed filed for purposes of Section 18 of the Exchange Act, and it carries standard forward-looking statement cautions referring investors to the risk factors in the Company's 2023 Form 10-K.
02—Key points
Key Highlights
- Settlement of the Le and Johnson class actions for an aggregate $335 million, payable in installments by the Company and its subsidiaries
- Agreement reached March 13, 2024; terms still to be memorialized in a long-form agreement and submitted to the court for approval
- Lawsuits allege violations of Section 2 of the Sherman Act by former UFC athletes against TKO OpCo and/or affiliates
- Le case consolidated in June 2015 from five related class actions filed between December 2014 and March 2015; Johnson case filed in 2021
- Company anticipates the settlement amount will be deductible for tax purposes
- Endeavor Group Holdings, Inc. is identified as TKO OpCo's ultimate parent entity and a named affiliate in the lawsuits
03—Questions
Frequently Asked Questions
What is the total cost of the settlement?
The settlement resolves all claims in both the Le and Johnson class actions for an aggregate amount of $335 million, payable by the Company and its subsidiaries in installments over an agreed-upon period of time.
Is the settlement final?
Not yet. The parties agreed to settle on March 13, 2024, but the terms will be memorialized in a long-form agreement and then submitted to the court for approval.
What are the lawsuits about?
Former UFC athletes allege that TKO, including TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC) and/or certain affiliates, violated Section 2 of the Sherman Act in several substantially similar class-action suits.
Will the settlement have tax benefits?
The Company anticipates that the $335 million settlement amount will be deductible for tax purposes, though this is forward-looking and subject to the risks described in the filing.
Which entities are involved in the litigation?
The suits name TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC), a subsidiary of TKO Group Holdings, Inc., and/or certain of its affiliates, including Endeavor Group Holdings, Inc., TKO OpCo's ultimate parent entity.
04—Continue