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World Wrestling Entertainment today filed a 35-page motion to dismiss the lawsuit filed by MLW Media LLC on behalf of Major League Wrestling against them before the United States District Court, Northern District of California.
The 19-page lawsuit filed by MLW this past January alleged intentional interference with contractual relations, intentional interference with prospective economic relations, a violation of the Sherman Antitrust act and more, including allegations that WWE interference caused the cancellation of a signed MLW deal with FOX-owned streaming platform Tubi and prevented ViceTV from coming to terms with MLW, each preventing MLW from acquiring revenue that would have come from those deals.
WWE immediately went for the throat with their response, by claiming that while MLW has claimed to be cutting edge professional wrestling, the promotion has yet to acquire any major TV rights deals since 2017 when the company was resurrected, even though other promotions - including AEW -have:
“MLW styles itself to be an “innovative startup” in the professional wrestling world with “cutting-edge storylines,” but the complaint tells a very different story. Since 2017, MLW has attempted to sell “broadcast rights” for professional wrestling content to television broadcast networks, cable networks, and streaming services.1 In that time, MLW alleges that a new entrant, All Elite Wrestling, exploded onto the scene and quickly captured a contract to sell broadcast rights for its professional wrestling program, Dynamite, to WarnerMedia for $43.8 million annually.
Further in that same time, MLW alleges that market incumbents WWE secured contracts with NBCUniversal and Fox to sell its US broadcast rights for two of its programs for a combined average annual value of $470 million, and Impact Wrestling (“Impact”) secured a contract to air on the cable channel AXS.
But not MLW. Despite some potential opportunities with the cable channel VICE TV (“VICE”) and streaming service Tubi, MLW is yet to sell broadcast rights for its wrestling program. Hundreds if not thousands of other potential buyers of broadcast rights exist, but MLW does not allege that it attempted to sell its content to any of them. MLW could start its own streaming service and reach consumers directly— as it acknowledges that WWE and Impact have done—but it does not allege to have tried that, either.
MLW has given up competing in the ring and chosen instead to compete in the courtroom. MLW brought claims for monopolization, intentional interference with contractual relations, intentional interference with prospective economic advantage, and unfair competition against WWE in a vain hope to shift blame for its failures away from itself. But MLW’s failings are its own. Its claims are meritless and should be dismissed as a matter of law.”
MLW’s lawsuit stated they were filing their lawsuit before the court because of “the egregious efforts of professional wrestling company WWE to destroy its competitor MLW’s business and maintain its dominance of the U.S. broadcasting market for professional wrestling by unlawfully interfering with MLW’s access to media markets and wrestling talent.” Their lawsuit called for:
*A judgment in favor of MLW and against WWE.
*An award of actual damages and all damages that were a natural result of WWE’s tortious conduct, in an amount to be calculated at trial, inclusive of any pre-judgment or post-judgment interest accrued under California Civil Code.
*An award of exemplary damages for WWE’s oppressive and malicious tortious conduct, pursuant to California Civil Code.
*A declaration that WWE’s unlawful and predatory interference with MLW’s access to the media markets and wrestling talent was and is decreed a violation of Section 2 of the Sherman Antitrust Act.
*Injunctive relief to prevent WWE from engaging in anti-competitive and unfair business practices towards MLW pursuant to California Business and Professions Code.
*Injunctive relief to prevent WWE from engaging in anti-competitive and unfair business practices towards MLW pursuant to Sections 4 and 16 of the Clayton Antitrust Act, 15.
*An award of treble the amount of MLW’s damages resulting from its antitrust injuries to be proven at trial in accordance with Section 4 of the Clayton Antitrust Act.
*An award of MLW’s costs and expenses of litigation, including attorneys’ fees and expert witness fees, in accordance with Section 4 of the Clayton Antitrust Act,
*Interest.
*Such other relief as the Court deems just and proper.
In today’s filing, WWE immediately took aim at the idea they were in violation of the Sherman Antitrust Act, citing:
“MLW fails to plausibly allege that WWE violated Section 2 of the Sherman Act. MLW provides no facts to support its naked assertion that there is a relevant product market for the sale of broadcasting rights for professional wrestling programs to national networks, cable, and streaming services. Even if such a market somehow existed, MLW fails to plausibly allege that WWE possesses monopoly power within it. To the contrary, its complaint is bereft of any facts suggesting that WWE could possibly hold any power over the dozens, if not hundreds, of networks, cable, and streaming services with which WWE has no commercial relationships. Indeed, AEW’s and Impact’s successful sales of broadcast rights show just the opposite. Finally, MLW’s Sherman Act claim fails for lack of antitrust injury. The antitrust laws protect competition, not competitors, yet MLW fails to allege any plausible facts demonstrating harm to the competitive process. The failure to plead antitrust injury is absolutely fatal to MLW’s complaint and, indeed, independently warrants dismissal. “
WWE also responded directly to the allegations of preventing MLW’s Tubi and ViceTV deals from being consummated:
“MLW fails to plausibly allege intentional interference with contractual relations. MLW asserts that it had a contract to sell Tubi, a streaming service owned by Fox, “broadcast rights” for its wrestling program, and that WWE forced Tubi to terminate that contract under the threat of pulling all WWE content from Fox. But MLW alleges no facts explaining how WWE’s communication or communications over the course of one day achieved this response from Fox. Moreover, the notion that WWE would jeopardize hundreds of millions of dollars in rights fees and breach its own contract with Fox in order to keep MLW off a streaming service makes no rational sense, just as Fox’s capitulation to any such threat is wholly implausible in light of its ability to enforce its contract with WWE.
Third, MLW fails to plausibly allege intentional interference with prospective economic advantage. MLW asserts that it had a contract with VICE to air archival (i.e., old) content and was negotiating to sell broadcast rights for first-run (i.e., new) content. MLW postulates that WWE, through a single phone call in June 2021, forced VICE to abandon those negotiations for first-run content months later. But MLW fails to plead that WWE even knew that MLW was negotiating to sell VICE broadcast rights for first-run content. Moreover, MLW admits that VICE aired one episode of first-run MLW content months after the alleged WWE phone call, demonstrating that the conversation had zero influence on VICE. Finally, MLW fails to plead that WWE was the proximate cause for VICE’s decision to abandon negotiations, rather than some other intervening fact, such as the first-run episode of MLW drawing a disappointing number of viewers.”
WWE also argues that MLW has failed to Allege a plausible relevant product market, citing “MLW alleges that the relevant product market is “the national market for the sale of broadcasting rights for professional wrestling programs to networks, cable[,] and streaming services.” However, MLW provides scant facts supporting this proposed market. MLW includes no allegations about the structure of the television and streaming industries; no allegations about how or why networks, cable, or streaming services purchase broadcast rights; no allegations about the factors that networks, cable, or streaming services consider when purchasing those rights; no allegations about various potential fee structures used in the industry; no allegations even about the production of professional wrestling programming; and no allegations that foreign, regional, or local channels or streaming services could not purchase professional wrestling broadcast rights. Importantly, MLW fails to allege that customers – here, alleged to be national networks, cable, and streaming services – do not have reasonably interchangeable alternatives to broadcast rights for scripted professional wrestling programming. Obviously, the vast majority of content aired by national networks, cable, and streaming services is not professional wrestling. MLW cannot explain why other content (such as The Walking Dead, Survivor, 90 Day Fiancé, UFC, or NASCAR) is not a reasonably interchangeable substitute for scripted professional wrestling. To say that no reasonably interchangeable alternatives to professional wrestling broadcast rights exist is akin to saying no reasonably interchangeable alternatives to broadcast rights for zombie shows exist. It is, of course, absurd, and purchasers of broadcast rights for zombie shows would consider other programming as alternatives.
WWE also argued today that MLW does not plead that WWE has a monopoly power over the professional wrestling industry, which it would need in order to violate the Sherman Antitrust Act, as MLW has alleged in their lawsuit, citing,
“To plausibly allege direct evidence of monopoly power, MLW must allege specific facts showing that WWE has the power to force networks, cable, and streaming services (which include some of the world’s largest companies) to exclude MLW from their platforms. MLW ignores that there are thousands of content providers (of which the WWE is but one) that sell programming to networks, cable, and streaming services. MLW further ignores that, in these countless transactions, the purchasers of content wield predominately all the power, not the content providers, and MLW pleads no facts to suggest otherwise. Indeed, claiming that WWE – one of the thousands of content providers – has the ability to control what networks, cable, and streaming services purchase is as improbable as the author of one book controlling what Amazon, Barnes & Noble, and local used bookshops purchase and re-sell. Obviously, neither WWE nor any other content provider wields such power over networks, cable, and streaming services. Indeed, quite the opposite is true. Given the obvious realities of which entities wield power, it is not surprising that MLW fails to plead any facts to support WWE’s alleged monopoly power over networks, cable, and streaming services. Nor is it surprising that the complaint contains no specific factual allegation that WWE reduced its output of professional wrestling programming or raised market prices beyond a competitive level. Without any direct evidence of monopoly power, MLW relies entirely on allegations of circumstantial evidence of WWE’s monopoly power. However, even the circumstantial evidence provided quickly demonstrates WWE’s lack of monopoly power. MLW alleges nothing more than an unexplained allegation that WWE controls 85% of the “market” and concludes, without specific examples, that significant barriers to enter this “market” exist.”
WWE also argues that MLW has not explained how WWE has 85% of the market in the marketplace, claiming they are using “some unexplained amalgamation of uncited 2020 viewership data for three wrestling promotions on cable and network television” in order to make the claim, even though MLW in the same lawsuit discusses four competitors, yet only uses three competitors’ television data.
WWE continued:
“Further, this unexplained and selective use of data belies the fact that there are more than four wrestling promotions in the market. Putting that initial flaw aside, MLW fails to take the crucial next step and explain how 2020 viewership data for just network and cable programming gives WWE the power to deprive networks, cable, and streaming services the choice of whether to purchase MLW programming. Still worse, even if such data were potentially relevant to the purchasing decisions of broadcast and cable networks, MLW fails to explain how television ratings connect in any way to streaming services. Indeed, it is an absurd proposition that WWE, with its viewership for three weekly wrestling programs on two specific networks, can force dozens (if not hundreds) of networks, cable, and streaming services with which it has no relationship not to purchase other professional wrestling content.”
WWE also argued that while MLW claims that WWE has created an adverse environment for MLW, “MLW does not plausibly allege that barriers to entry exist”, pointing to the creation and success of AEW in their argument - “AEW’s success further undercuts MLW’s unsupported assertion that substantial barriers to entry exist. The complaint alleges that WWE’s popularity has “declined” over the last five years. It goes on to say that, during the same period, AEW entered the proposed market and successfully sold broadcast rights to WarnerMedia. Subsequently, AEW managed to capture an average 2020 rating of 0.344 compared to WWE Raw’s 0.5075 in the key 18-to-49 demographic. This successful entry and expansion refutes the existence of substantial barriers to entry. “
To further that point, WWE also pointed out that anyone could create and produce professional wrestling programming, noting, “MLW fails to allege that WWE’s competitors, including AEW and Impact, could not increase their output. Nor does MLW allege that a network, cable, or streaming service could not develop or purchase its own professional wrestling promotion if it felt that insufficient output exists or that it required an alternative to WWE. MLW cannot plead this because, with adequate funding and acumen, any content creator could create and distribute professional wrestling content.”
WWE noted that AEW has indeed done that, creating Rampage as a second weekly series and recently purchasing Ring of Honor to operate as a second promotion.
WWE also argued that MLW cannot plead that anticompetitive product from WWE, noting:
“MLW purports to allege that WWE excluded it from participating in the “market” for professional wrestling broadcasting rights sold to national networks, cable, and streaming services. But MLW does not allege that this exclusion constituted substantial foreclosure from that market. It is not enough for MLW to allege that WWE excluded it from some of the relevant market; MLW must plead that WWE substantially foreclosed MLW from the market by excluding it from at least 30% or more of those outlets.
MLW does not even attempt to plead substantial foreclosure: it offers not even an unfounded guess as to how much of the market is foreclosed by WWE. Nor could it. MLW does not allege that WWE in any way prevented it from selling programming to Disney networks (including ABC), Paramount networks (including CBS, MTV, and Nickelodeon), WarnerMedia networks (including TNT and TBS), Discovery networks (including Discovery and TLC), AMC Networks, Netflix, Amazon, Apple TV, PlutoTV, Roku, Pay-Per-View, or the hundreds (if not thousands) of other networks, cable, and streaming services. Nor does MLW allege that WWE prevented it from launching its own over-the-top streaming service, as both WWE and Impact have done. MLW is complaining about the shadows cast by the boughs of a lone tree, while it stands in an otherwise open and extending field. The complaint in fact establishes that WWE cannot plausibly foreclose the purported market.
Clearly, AEW and Impact sell their programming to WarnerMedia and AXS, respectively. And MLW alleges that it distributes through YouTube and discussed distribution agreements of some kind with “potential partners” other than Tubi, none of which WWE is alleged to have any relationship.
MLW cannot blame WWE if those partners do not purchase MLW broadcasting rights. Without plausible factual allegations of substantial foreclosure, MLW fails to plead facts to demonstrate that WWE exercises or is likely to exercise monopoly power.”
WWE also points out that MLW alleged the following - “that WWE (i) sought to poach MLW wrestlers under exclusive contract; (ii) aired footage of a single MLW wrestler without MLW’s consent; (iii) attempted to induce a MLW wrestler to breach their contract with MLW; (iv) and refused to hire wrestlers that previously worked for MLW.” - but does not identify who any of these wrestlers were while at the same time, claiming WWE tried to steal wrestlers from MLW but also “refused to hire” MLW alumni.
WWE also argues MLW’s lawsuit “is devoid of any specific factual allegation demonstrating harm to the competitive process in its purported market. It does not contain a single factual allegation showing that WWE has ever locked up all networks, cable, and streaming services that purchase rights to air content from content creators. Nor does it contain any allegations of predatory pricing, reduced output, or any other harm to the competitive process whatsoever.”
While WWE denies they interfered with any potential MLW deals, they also argue, “Even if WWE interfered with MLW’s VICE and Tubi deals (which is alleged but denied), and even if WWE had exclusive control over all channels and streaming services affiliated with NBCUniversal, Fox, A&E, and VICE (which is not alleged), WWE defending its own, hard-earned distribution relationships would not violate the Sherman Act when there are so many other media partners within the proposed marketplace.”
In the filing, WWE specifically responds to allegations that pressure from WWE Chief Brand Officer Stephanie McMahon caused the demise of MLW’s deal with Tubi.
To review, MLW alleged in their lawsuit that WWE stepped in and caused the demise of a “lucrative agreement with” FOX-owned streaming service Tubi.TV, stating that Tubi signed a deal with MLW in mid-2021….until WWE allegedly stepped in.
MLW alleged that the agreement between Tubi and MLW, “would have had a profound impact on MLW’s business by giving it exposure to Fox’s broad television and NFL football audience, further positioning MLW for future media deals.” but after “WWE found out about the agreement, WWE contacted a Tubi executive located in Tubi’s headquarters in San Francisco and threatened that if Tubi did not terminate the MLW contract, WWE would cease doing business with Fox and would pull important WWE programs from Fox platforms. Soon thereafter, and just days before MLW content was to begin airing on Tubi, the MLW contract was terminated, resulting in substantial losses to MLW and harm to consumers, including in California.”
According to the lawsuit, MLW was to launch on Tubi on 9/11/21 with an official press release set to announce the deal on 8/10/21. This would have been around the time MLW teased a major announcement that was pushed back and back until never actually happening.
MLW's lawsuit alleges:
"Prior to Tubi and MLW issuing the joint press release, WWE learned about the terms and existence of the License Agreement. On or about August 9, 2021, WWE executive Stephanie McMahon spoke with a Tubi executive located in California about the License Agreement. Ms. McMahon initially pressured the Tubi executive to deny MLW a time slot that would compete head to-head with WWE’s NXT programs on Tuesday nights. But Ms. McMahon ultimately pressured the Tubi executive and other senior executives at Fox to terminate the agreement in its entirety. Tubi’s affiliate, Fox, could lose WWE’s business or preferred content if Tubi did not acquiesce to WWE’s demand and terminate its agreement with MLW. On August 9, 2021 -- the night before a planned press release about the Tubi-MLW deal -- as a result of WWE’s pressure and interference, MLW received a letter purporting to terminate the License Agreement."
WWE’s response to the Tubi allegations:
“MLW fails to allege (i) who at Tubi and Fox Ms. McMahon supposedly pressured; (ii) what Ms. McMahon supposedly said; or (iii) when Ms. McMahon supposedly had these additional communications with the Tubi executive and other senior executives at Fox. Moreover, MLW pleads that it “received a letter purporting to terminate” its License Agreement with Tubi. MLW fails, however, to plead the contents of that letter, the grounds for termination, whether termination was unilateral or by mutual consent, or whether Tubi paid MLW in connection with the termination. MLW’s failure to plead these missing facts alone warrants dismissal of Count I.
Second, and more fatal to MLW’s claim, these allegations defy all economic reality and are not remotely plausible. According to MLW, WWE depends highly on its broadcast rights deals with NBCUniversal and Fox for hundreds of millions of dollars annually, and “the combined average value of WWE’s US TV rights for its programs WWE RAW and WWE Smackdown alone is $470 million”.
MLW implausibly asks this Court to accept that WWE, a public company, would terminate its contract with Fox, forgoing substantial revenues and risking breach of contract litigation with Fox just to keep MLW off Tubi. Even more ridiculously, MLW asks this Court to accept that Fox would submit to such a threat rather than utilize the full panoply of rights at its disposal under the WWE/Fox contract. As noted above, courts must reject allegations that make “no economic sense.” MLW fails to plead any facts to move these claims from the realm of absurd to the realm of possible, much less from the realm of possible to that of plausible.”
WWE also responded to MLW’s claims that they entered into an agreement with VICE TV in May 2021 that saw Vice agree to air “archival footage” (old MLW Underground episodes) and that MLW and VICE became “engaged in negotiations to expand the agreement to include the broadcasting of new licensed programs”, the first of which would have been the October 2021 Fightland special, headlined by Hammerstone vs. Jacob Fatu, but WWE allegedly caused the end of their negotiations with VICE.
MLW’s January lawsuit cited the following:
“When WWE found out about the MLW/VICE agreement, its Senior Vice President, Susan Levison, called a VICE executive to tell him that WWE’s owner, Vince McMahon -- notorious for his aggressive business tactics -- was “pissed” that VICE was airing MLW content and wanted VICE to stop doing so. The VICE executive told Levison that “I think that this is illegal what you’re doing” and that it was probably an antitrust violation, to which Levison responded that she could not control Vince McMahon. WWE had considerable leverage over VICE because professional wrestling was an important part of VICE’s programming and wrestling viewers were an important part of VICE’s audience. VICE therefore needed WWE, as the overwhelmingly dominant wrestling company, to ensure the success of VICE’s wrestling-related programs, which included a series, Dark Side of the Ring, often focused on WWE storylines based on input from WWE. WWE’s interference resulted in VICE withdrawing from negotiations over airing new MLW content and in VICE airing only a single MLW program.”
WWE’s response to the ViceTV allegations:
“MLW fails to allege facts showing that WWE even knew of VICE’s negotiations to purchase broadcast rights for first-run MLW content. MLW claims that a WWE employee “warned” a senior VICE executive in June 2021 that WWE’s “owner” (in reality, its Chairman and CEO) was “pissed” that VICE was airing archival MLW content and wanted VICE to stop doing so.
But MLW fails to plead that this call touched on any negotiations for new, first-run MLW content or that MLW or VICE ever disclosed those negotiations publicly or to WWE prior to the June 2021 call. Thus, MLW pled no facts to establish that WWE ever knew that MLW was attempting to sell broadcast rights for first-run programming at the time of the supposed “interference.”
Second, MLW fails to plausibly allege any actual disruption in its negotiations with VICE. MLW’s sole allegation involving WWE is the June 2021 phone call, but MLW fatally admits that “VICE subsequently aired one MLW program in the fall of 2021.”
Thus, negotiations clearly continued for months after the June 2021 call, and MLW pleads no facts sufficient to suggest that WWE impacted MLW’s negotiations in the slightest.
Third, MLW has not plausibly alleged that WWE is the proximate cause for VICE terminating any negotiations to purchase broadcast rights for new MLW content. As noted above, VICE aired a single episode of first-run MLW content in the fall of 2021. MLW pleads no facts to exclude the strong likelihood that some other intervening events after the June 2021 call caused VICE to abandon the negotiations. For example, MLW does not address news reports that the one episode of first-run MLW content drew only a disappointing 40,000 viewers.
Instead, MLW asks the Court to accept as plausible (i) that a VICE executive received a phone call from WWE in June 2021 demanding VICE not air archival MLW content, (ii) that VICE nonetheless continued to air that content, (iii) that VICE decided to air new MLW content months after the WWE call, and (iv) that VICE only then felt so threatened by WWE that it abandoned negotiations with MLW. Such a proposition defies all logic.
Finally, the alleged conduct is not “wrongful by some legal measure other than the fact of interference itself.” The only independently wrongful conduct asserted in the complaint is WWE’s supposed violation of Section 2 of the Sherman Act and Cal. Bus & Prof. Code § 17200 et seq. Because these claims should be dismissed for the reasons described in Sections III.A and III.B herein, MLW’s interference with prospective economic advantage claim likewise must be dismissed as a matter of law.”
WWE also argued that the State held no jurisdiction over either party, so the court should not be hearing the lawsuit to begin with, and that MLW’s claim claim under the California Unfair Competition Law does not hold, either. They are also, as is clear from the filing, stating that, thus far, MLW has brought nothing tangible to prove their claims to the table.
MLW has until 4/22 to respond to WWE's Motion. At that point, WWE has until 5/16 to then respond, at which point the court will make a ruling.
The court ordered a hearing for 9/29 to hear arguments on the matter, so unless they go immediately into a settlement discussion (which is very unlikely), this process is going to take some time.
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