The Extra-Cover Blog
CHAMPIONS V CHAMPIONS: A UFC CONTRACTUAL BATTLE FOUGHT TILL PERPETUITY WITH NO LAWS
This post has been authored by Mr. Prabal Srivastava and Mr. Mehvash Choudhary.
Mr. Prabal Srivastava is a fifth-year student of B.A. LLB. at Galgotias University, India. Mr. Mehvash Choudhary is also a fifth-year student of B.A. LLB. at Galgotias University, India
The sport of Mixed Martial Arts (“MMA”) has gained wide recognition after its premier organisation, Ultimate Fighting Championship (“UFC”) was established worldwide. However, a substantial rise in contractual disputes between UFC and the fighters has given rise to appreciable concerns. It was noted that competitors were defeated by the UFC but persisted in their efforts to popularise MMA throughout the world. However, certain fighters couldn't bear much and threatened to leave the organisation if there was no bespoke contract.
Successful completion of the research work claimed that the absence of legislation governing the sport of MMA led to such ‘legal exploitation’ by the UFC. The authors, through this legal blog post, breaks down the ‘champions’ clause stipulated under the agreement, which extends a UFC’s champion contract till perpetuity. Further, the author gives an overview of the pending bill, which is the potential solution to these contractual abuses by professional MMA organisations. Thereafter, until the new bill finally becomes the law, the authors have attempted to provide a solution to the current problem.
CONTRACTUAL PROVISIONS: EXPOSING THE CHAMPIONS CLAUSE
While reading between the clauses of a standard UFC contract, it has been observed that such agreements are likely to be unconscionable and unenforceable. The arguments sustain evidentiary value by virtue of the champion’s clause found under lightweight contender Eddie Alvarez whose contract came into the public eye which reads as:
4.2 “If, at the expiration of the Term, Fighter is then a UFC champion, the Term shall automatically be extended for the period commencing on the Termination Date and ending on the later of (i) one (1) year from the Termination Date; or (ii) the date on which Fighter has participated in three (3) bouts promoted by ZUFFA, regardless of weight class or title, following the Termination Date ("Extension Term"). Any reference to the Term herein shall be deemed to include a reference to the Extension Term, where applicable.”
Interpretation of this clause would extend the UFC contract with the fighter till perpetuity; whenever a fighter remains a UFC champion by the end of his tenure, he/she cannot leave the organisation as the contract would automatically be extended by 1 year or 3 fights whichever is later. Various relevant stakeholders raised immediate contentions against such clauses. Northwestern University’s labour law professor claims such agreements to be the worst thing ever that a UFC fighter has to survive with. Such provisions are in violation of the 13th Amendment of the US Constitution which prohibits involuntary servitude.
Not surprisingly, allegations were raised in Le et al v. Zuffa, LLC, a UFC antitrust lawsuit whereby the petitioners contended the champion’s clause to be coercive as it extends the contractual tenure for 1 year for 3 fights whichever is later, in the case a fighter remains a champion in his weight class at the end of his original term. Further, this clause solicits bids by competitive organisations or potentially blocks rival promotions from signing UFC superstars for their commercial benefit. Upon interpreting the said clause when read with other parts of the contract, the fighters have no space to leave the UFC despite their status being independent contractors rather than employees of the UFC.
From the above discussion, it may be imperative that UFC plays its business strategy, but it can lead to an instant fall in viewership/loss for the business instated. For example, if a champion vacates his belt, the contending champion or the second-best fighter of that division would never acquire the status of a “true champion.” Also, a question that remains unanswered is, in case a champion wishes to vacate his title by the end of his tenure, or if the champion keeps on retaining, would the champion’s clause still be applicable? So far, we don't have any instance where such a dilemma has happened yet.
MMA LEGISLATIONS: WHAT'S THE STATUS QUO?
Any philosophical conundrum is put to an end as soon as respective legislation is implemented. In so far as the sport of MMA goes, there is no standalone legislation that governs the sport hence, the negotiating power is more vested with the promotional organisations than the fighter. However, on account of such contractual abuses, professional organisations face immense pressure from the Congressional Subcommittee on Digital Commerce and Consumer Protections to rectify the unconscionable agreements. Consequently, the US House of Representatives proposed HR 44 - Expansion of Muhammad Ali Expansion Act (hereinafter “Act”) to the best interest of the MMA fighters. However, to see how the Act holds the fighters harmless, we need to study the prevailing legislation which regulates the sport of boxing i.e., Professional Boxing Safety Act, 1996 and Muhammad Ali Boxing Reforms Act, 2000 (point of discussion here) which in toto acts as precedent to this Act.
Muhammad Ali Boxing Reforms Act, 2000
The Muhammad Ali Reforms Act amended the previous Professional Boxing Safety Act 1996. Some of the major changes pertaining to contractual abuses were that the Boxing Associations would not contract any fighter for a period of more than 12 months, failing which would amount to forced/compelled labour and restraint of trade. Similar contractual concerns have been observed in the sports of MMA, to which this amendment is a rescue.
Muhammad Ali Expansion Act
Pursuant to such a rise in appreciable contractual abuses, as discussed above, the legislature attempted to protect the rights of MMA fighters by virtue of the Muhammad Ali Expansion Act. The intricacy of the pending bill amends the Professional Boxing Safety Act by including the sport of MMA and establishing a separate definition for “fighter”, “mixed martial arts”, and “combat sports competition”. The inclusion of the said sport would combat the contractual abuses faced by UFC fighters.
The essence of this bill with respect to contractual abuses is to mention the minimum contractual provision between the parties. The Expansion Act to include combat sports including MMA would be the potential solution for contractual abuses, just like how the Professional Safety Act was a recourse for the sports of boxing in the 1990s.
The awaiting legislation suggests that Boxing Associations frame guidelines for minimum contractual provisions within 2 years after the enactment of the bill. However, firstly let’s see what is called to be a coercive contract by Congress. Any contract of more than 12 months would be deemed to be a coercive contract. Meaning that this clause would immediately bring the UFC champions a legal recourse to discontinue their relationship with the organisation without losing the championship belt on purpose. The fighters would not be under any sort of involuntary servitude. Hence their association with the UFC will be at their own discretion.
Recently, US Senator Markwayne Mullin of Oklahoma claims to have been looking forward to introducing the new bill to ensure safety of the MMA fighters as well. Through this bill, the aforesaid problem shall be duly resolved as one of the features of the bill is to ensure the sanctity of contracts and assurances of compensation. Hence, it is possible that in 2023 the new bill can be presented before the US Senate.
POSITION OF INDIA
As far as India is considered, MMA is relatively very new, and the sport has not been spread across the country yet. However, the sport is not illegal and the same can be substantiated by the Kerala High Court’s ruling in Anoop Bahuleyan v. District Collector, (2012) whereby the petitioners contended that the ‘12th Asian Karate Games 2012’ conducted by the respondents / organisers was dangerous therefore illegal. The Kerala High Court upheld the validity of the competition on the grounds that in order to claim a sport illegal there must be statute or governing law that must claim such sport to be illegal. Despite having a lack of sports law in the country, such coercive clauses would still be considered as violative of Article 23 of the Indian Constitution which expressly calls forced labour to be a punishable act.
Considering the contractual abuse and the pending bill, the authors believe that the champion clause should be amended to only one additional fight post winning the belt as a mandate unless the champion retires or suffers an injury which bars him from playing the sport anymore or suffers from any injury which persists for more than one year, as the case may be. This would ensure that the spirit of championship fight is not affected. In the event, the champion exits the UFC and gets stripped of the belt, usually, the second best and third best fighters fight for the title. However, to become a champion once must beat the champion failing which would ultimately question the potential of the belt holder. In the event, the champion successfully regains the title and still wishes to leave the organisation, the champions clause should cease to exist, and the belt shall be vacated. This approach would not adversely affect the UFC, the fighters, and the fans.
UFC contracts at prima facie can be deemed to be one-sided, take it or leave it, or unconscionable contracts. However, we need to understand that MMA is a growing sport and has not gained enough popularity like other combat sports e.g., kickboxing, Muay Thai, or sambo which are also recognised by the Olympics. UFC steps forward to bring in wide popularity and some unarguably the best fighting cards. A thorough examination and research work proposed that UFC simply enjoys the absence of any legislation governing the sport of MMA, unlike boxing. Though fighters have alternative options by joining other professional MMA promotions like One FC, Bellator MMA, etc., however, the goodwill and the competency level UFC has gained by showcasing some undeniable talents makes UFC apart and more famous than any other organisation. Generally speaking, fighters are being paid a fair amount for their performances. Hence, it still remains a vital option for others. UFC has already made some fighters multimillionaires.
The contract is often tweaked as per the demands of the fighters on account of wide popularity and public demands. For example, UFC’s biggest star Conor McGregor boxed Floyd Mayweather while being the two-division champion. Hence, the rationale behind including such coercive clauses is simple, be the demand of the fans and you are likely to have a tailored agreement. Recently, UFC’s former heavyweight champion, Francis Ngannou was stripped of the title when he finally decided to leave the company due to the champions clause. In case UFC fails to amend these coercive clauses or have successful negotiations, the fighters are left with no option but to leave the company.
The authors can be reached for comments on their email at firstname.lastname@example.org and email@example.com.
Cite as: Prabal Srivastava & Mehvash Choudhary, Champions v Champions: A UFC Contractual Battle Fought till Perpetuity with No Laws, Extra-Cover: The Sports Law Blog of India (1st May 2023), Accessed at https://www.extra-cover.org/post/champions-v-champions-a-ufc-contractual-battle-fought-till-perpetuity-with-no-laws [Date of Access].