Here's the true test of this age of corporate power: You can throw a dart at a board (one that includes all sectors of the economy, so a pretty big board) and inevitably hit a concentrated, exploitative industry. Today I toss a bull's-eye toward … mixed martial arts!
Not that you'd know this but there's a consequential lawsuit going on between practitioners of the sport and the Ultimate Fighting Championship (UFC), the world’s largest MMA promotion company. A company named Zuffa owns UFC; Zuffa itself is a wholly owned subsidiary of William Morris Endeavor, one of the big three Hollywood talent agencies, which itself enjoys billions in private equity investments.
That Russian nesting doll aside, here's the deal: Back in 2014, MMA athletes alleged that UFC is a monopoly, which controls the market for fights and suppresses wages for fighters. If you want to get paid to beat someone up using various martial arts disciplines, you need to sign an exclusive long-term contract with UFC.
According to plaintiff expert witness (and sometime Prospect contributor) Hal Singer, the fighters’ share of event revenues fell from 26 percent in 2007 to around 20 percent today, lower than what they might command in a competitive market. For context, boxers get 60 to70 percent of revenues from top promoters. UFC argues that the wage levels have risen moderately, so no foul.
UFC contracts come with stringent noncompete clauses, as well as a yearlong “right to match” provision. Even if a fighter left UFC and found another promoter, UFC could match the offer, locking the fighter back into a long-term contract. In other words, MMA is like the rest of the economy, where workers have seen competition for their services narrow and subsequently lost bargaining power to set terms for their employment.
UFC has dragged this case out. But last week, during evidentiary hearings to determine class action certification, Singer and Dr. Robert Topel, a University of Chicago professor and the UFC’s expert, each gave testimony. As is typical for antitrust cases, it came down to competing economic questions: Are wage levels or wage shares the more appropriate measure in this market? A Chick-fil-A fry cook couldn’t demand nine times as much in salary as a Subway sandwich artist if their store made nine times as much in sales, Topel contended. But Singer responded that in sports, where the workers are the product people pay to watch, the share of revenue means more.
The consensus was that Singer won the bout, meaning we could see an actual trial soon. And that matters, not just for athletes being paid what they deserve, but as a potential blow against corporate power’s impact on labor. If you had MMA fighters in the “who will break the iron grip of monopsony” raffle, come collect your prize.
LINKS TO MY STORIES
With Mike Elk, the largest strike since 1997 could happen at Kaiser, the hospital network that was once a paragon of labor-management relations.
Google gets the FTC to censor its own commissioner.
ALSO AT THE PROSPECT
Harold Meyerson on sectoral bargaining, part of our huge Labor Day package.
An excerpt from pollster Stan Greenberg's new book.
David Pettinicchio on the crisis of long-term care.
Max Sawicky on progressive trade.
Alex Sammon on the war on the capital gains tax.
BOOK CHAT
For those who don't know, I authored a book a few years ago called Chain of Title, and something called Book Authority named it the 8th-best eBook about government of all time. They named the Kindle edition of the Declaration of Independence and Constitution 11th, so take that, Jefferson and Madison!
By the way, I have a new book coming next year called Monopolized: Life in the Age of Corporate Power, and while I am reluctant to link to one such monopoly, the pre-order page is up at Amazon, where you can at least see the cover and read the synopsis.
YES, I KNOW
Sharpies. Also seven hours of climate talk, which I missed because I had a thing.
SHARING THE WEALTH
U.S. job growth is noticeably weaker in 2019, and manufacturing numbers showed a contraction in August. (EPI; Trading Economics)
Are index funds the next bubble? Michael Burry, who saw the subprime crash before anyone, thinks so. (Yahoo News)
North Carolina must redraw its legislative districts. (HuffPost)
Elisabeth Rosenthal is the best messenger for the idea that it's hospitals, hospitals, hospitals driving up health care costs. (NY Times)
The public option already exists, in Los Angeles. (The Atlantic)
Public-service student loan forgiveness program rejects almost everyone, again. (LA Times)
William Dalrymple on the original bad corporation, the East India Company. (NY Times)
CEO calls Google search ads that block his listing a “shakedown.” (CNBC)
Amazon says Ring doorbells don't use facial recognition, but Ring has a “head of face recognition research.” (Buzzfeed)
Apple copies everyone's apps. (WaPo)
