TKO Group Holdings stock jumps nearly 8 percent after UFC settles antitrust lawsuits

TKO Group Holdings, the parent company of the UFC, saw stock prices jump dramatically on Wednesday after news broke that the promotion settled two separate antitrust lawsuits and will prevent either from going to trial.

At closing, TKO stock was up 7.84 percent — $6.35 per share — with the price jumping from $81.15 per share to $87.37 when market closed at 4:30 p.m. ET. In other words, investors essentially celebrated news that the antitrust lawsuits are coming to a close without a trial ever happening.

In the end, the UFC ultimately agreed to pay out $335 million for two separate lawsuits brought by the fighters, who were trying to prove that the promotion operated with “monopsony power” and alleged that the company used exclusive contracts, coercion, and acquisitions that eliminated competitors to maintain a stranglehold on the sport.

In a filing made to the Securities and Exchange Commission on Wednesday, TKO stated that “the company anticipates that the settlement amount will be deductible for tax purposes.”

While a judge overseeing the case still needs to sign off on the proposed resolution, both sides involved in the antitrust lawsuit have already reached an agreement after weeks of mediation took place.

That brings to an end the antitrust lawsuits after the first one was filed a decade ago in 2014. The $335 million settlement, which will likely become tax deductible, means the UFC really won’t take a financial hit as a result. The company has continued to produce record revenue year over year, including $1.3 billion earned in 2023.

Those figures will very likely increase exponentially over the next two years as the UFC prepares to embark on a new broadcast rights deal that could double in value from the previous seven-year contract with ESPN that runs through 2025.

Wall Street analysts had already backed TKO as a stock worth watching, especially with World Wrestling Entertainment — the other half of the merged company — recently striking new TV deals, including a massive $5 billion contract with Netflix for WWE Monday Night Raw. Settling the antitrust lawsuits and preparing for a new TV deal with negotiations starting later this year will only make TKO even more attractive to investors.