FTC closes monopoly investigation of UFC

Tuesday, January 31, 2012

For many months there has been an ongoing, not-completely-secret investigation of UFC and Strikeforce parent company ZUFFA by the Federal Trade Commission to determine whether ZUFFA holds a monopoly position in the space. If a monopoly were held to exist, a break up of the company would be a likely consequence.

For months company owners Lorenzo Fertitta and Dana White described the idea as ridicullous. Never the less, the idea circulated widely, perhaps most notably in content generated by The Culinary Workers Union Local 226, which has for years failed in its attempts to unionize the Station group of hotel-casinos in Las Vegas. Station Casinos is owned by Frank and Lorenzo Fertitta, who are also majority owners of the UFC, and thus the UFC became an exceedinlgy unlikely target for a union action.

The FTC investigation was also mentioned in a recent ESPN Outside the Lines company profile that widely criticised.

Now the FTC has announced that the investigation is closed, as detailed in a letter to the New York City-based law firm Axinn-Veltrop-Harkrider, LLP, which had been retained by Zuffa as its representation before the FTC.

January 25, 2012
Office of the Secretary
Stephen Axinn, Esq.
Axinn Veltrop, and Harkrider LLP
1330 Connecticut Ave., NW
Washington, DC 20036

Re: Acquisition of Explosion Entertainment, LLC (Strikeforce) by Zuffa, LLC (UFC) FTC File No. 111 0136

Dear Mr. Axinn:

The Federal Trade Commission’s Bureau of Competition has been conducting a nonpublic investigation to determine whether Zuffa, LLC’s acquisition of Explosion Entertainment, LLC may violate Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.
Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed. This action is not to be construed as a determination that a violation may not have occurred, just as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves the right to take such further action as the public interest may require.

By direction of the Commission.

Donald S. Clark Secretary