01—Abstract
Summary
Summary of the 8-K filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.
TKO Group Holdings, Inc. filed this Current Report under Item 7.01 (Regulation FD Disclosure) to disclose a court ruling in the UFC antitrust class-action litigation.
TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC), a subsidiary of the Company, and/or affiliates including Endeavor Group Holdings, Inc. are defendants in several substantially similar class-action lawsuits by former UFC athletes alleging violations of Section 2 of the Sherman Act. The Le case (consolidated in June 2015) and the Johnson case (filed in 2021) were the subject of a proposed settlement of all claims in both actions for an aggregate amount of $335 milliona, payable by the Company and its subsidiaries in installments over an agreed-upon period. On July 30, 2024, the court denied the motion for preliminary approval of the settlement.
The court has not yet issued a written opinion explaining its reasoning, but it scheduled a status conference for August 19, 2024 and set a new tentative trial date for Le of October 28, 2024. The Company is evaluating all of its options, including an appeal, and has initiated discussions with plaintiffs' counsel, who have expressed willingness to engage in separate settlement discussions for the Le and Johnson cases. A motion to dismiss the Johnson complaint remains pending, and no trial date has been set for that case.
For investors, the key takeaway is that the proposed $335 millionb settlement is not approved, leaving the Company facing a possible near-term trial in Le and an open question about the timing and terms of any future resolution. The filing does not quantify any accrual or expected financial impact beyond the proposed settlement amount.
02—Key points
Key Highlights
- Court denied preliminary approval on July 30, 2024 of the settlement of the Le and Johnson class actions, which had an aggregate settlement amount of $335 million payable in installments.
- A new tentative trial date for the Le case has been set for October 28, 2024, with a status conference scheduled for August 19, 2024.
- The Company is evaluating all options, including an appeal, and has begun discussions with plaintiffs' counsel, who expressed willingness to pursue separate settlement talks for Le and Johnson.
- The court has not yet issued an opinion explaining its reasoning for denying preliminary approval.
- The Johnson case has a motion to dismiss pending, and no trial date has been set.
- The lawsuits allege violations of Section 2 of the Sherman Act by former UFC athletes against TKO OpCo and/or affiliates, including Endeavor Group Holdings, Inc.
03—Questions
Frequently Asked Questions
What happened with the proposed UFC athlete class-action settlement?
On July 30, 2024, the court denied the motion for preliminary approval of the agreement to settle the Le and Johnson class actions, which carried an aggregate amount of $335 million payable by the Company and its subsidiaries in installments.
What are the next key dates in the litigation?
The court scheduled a status conference for August 19, 2024, and set a new tentative trial date for the Le case of October 28, 2024. No trial date has been set for the Johnson case.
What options is the Company considering?
The Company is evaluating all of its options, including, without limitation, an appeal. It has also initiated discussions with plaintiffs' counsel, who have expressed willingness to engage in separate settlement discussions for the Le and Johnson cases.
Why was the settlement denied?
The court has not issued an opinion explaining its reasoning at this time.
Which entities are involved in the lawsuits?
The lawsuits are against TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC), a subsidiary of TKO Group Holdings, Inc., and/or certain affiliates, including Endeavor Group Holdings, Inc., TKO OpCo's ultimate parent entity.
04—Continue