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TKO Group Shares Surge on $335M Settlement Over Fighter Pay Lawsuits

TKO Group Holdings – ★★★ – Ranked 47th in Q1 2024 Mid & Small Cap Rankings

 TKO Group Holdings (TKO) saw its stock price jump over 7% on Wednesday after announcing it had reached a $335 million settlement to resolve a pair of class-action lawsuits brought by former UFC fighters.

The lawsuits, first filed between 2014 and 2015, alleged that TKO violated antitrust laws by cornering the market for elite mixed martial arts fighters' services and artificially suppressing their compensation.

According to TKO's SEC filing, the $335 million settlement amount will be paid out in installments over an agreed period. The company expects the payout to be tax deductible.

The lawsuits had accused TKO of engaging in anticompetitive practices that restrained fighter pay rates and earnings. Five related cases filed in 2014-2015 were consolidated into one action in June 2015, with an additional lawsuit added in 2021.

Wednesday's settlement resolves all claims in both the original 2015 case and the more recent 2021 complaint brought by former UFC fighters.

The $335 million price tag is substantial, but investors seemed to welcome the resolution of this prolonged legal battle. TKO's share price surge suggests the market had been pricing in a potentially larger settlement.

By removing this overhang of litigation risk, TKO can now move forward setting its future strategy without the cloud of antitrust allegations over restricted fighter compensation.

TKO Group Holdings has a ★★★ star ranking in our Q1 2024 Mid & Small Cap Rankings.

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