It appears the UFC could be in hot water with the US Government and may possibly be the center of an anti-trust investigation revolving around the Muhammad Ali Boxing Reform Act.
The Economist breaks down the details of what exactly is going on behind the scenes:
In 2000 the United States Congress passed the Muhammad Ali Boxing Reform Act, a law that sought to protect boxers from unscrupulous promoters and sanctioning bodies. Because boxing has no single governing organisation and its fighters are not unionised, promoters used to wield inordinate market power. As the industry’s “matchmakersâ€, they could refuse to arrange a fight, venue or broadcast deal unless boxers surrendered a disproportionate share of the proceeds and signed a long-term promotion agreement. The act tried to crack down on “coercive contracts†and level the field between fighters and promoters in negotiations.
However, the law only applied to boxing. In the decade since its passage, boxing’s primacy among combat sports in America has been challenged by the rise of mixed martial arts (MMA). MMA has grown in popularity in both the United States and Europe, and has moved from fringe venues and the outer reaches of the cable television dial to snazzier sports arenas and broadcast networks.
In recent years the industry has consolidated under the aegis of the Ultimate Fighting Championship (UFC), which has bought up most of its rivals, including Strikeforce this March. In August UFC inked a $100m-a-year deal with the Fox network in the United States to begin broadcasting its fights in November.
As the UFC has grown, it has increasingly found itself under the same scrutiny that boxing promoters once attracted.
The UFC may already be the subject of an FTC antitrust investigation. Although the commission does not acknowledge its investigations until they have been completed, rival fight promoters say they have answered requests from the FTC for information about UFC. The $40m Strikeforce deal fell below the $66m threshold for an FTC investigation. But the commission could have launched one retroactively if it found evidence of abuse of monopoly power. Mr White has ducked questions about antitrust concerns, saying only that “there are a lot of people coming after us and taking shots at us.†(If he were to admit publicly that UFC was being investigated, the FTC would then be able to discuss the case as well).
If UFC’s many rivals fail to weaken it through the executive branch, they can always turn to the legislature. It would take just a slight tweaking of the Muhammad Ali act to expand it to MMA as well, which would give fighters more leverage in dealing with the company. John McCain, the senator who sponsored the Muhammad Ali act, remains in office. He should probably expect a call from anti-UFC lobbyists sometime soon.
