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Earlier today, World Wrestling Entertainment filed a response to MLW's lawsuit ahead of a scheduled hearing on 6/15.
MLW had previously responded to WWE's latest attempts to dismiss the lawsuit, with WWE trying to shoot down MLW's defenses.
WWE stated to MLW's arguments that the lawsuit has legitimate merits were actually contradicted by MLW's own allegations, arguing, "MLW’s opposition to WWE’s motion to dismiss (“Opp.”) is without foundation in truth and is contradicted by its own allegations. MLW admits that it successfully sold its media rights to a cable network, Reelz. It admits that other promotions such as All Elite Wrestling (“AEW”) and Women of Wrestling (“WOW”) have expanded output and sold their media rights for millions of dollars. These admissions are fatal to MLW’s monopolization claim. Hoping to diminish them, MLW told the Court that Reelz would prematurely cancel its contract with MLW because of WWE and it labeled AEW and WOW “de minimis” competitors. In actuality, Reelz extended its ten-week trial run with MLW, and MLW just announced multiple new, “hugely important” media rights agreements with a streaming service, FITE. As for AEW, far from being a de minimis competitor, it just expanded the sale of its media rights to WarnerBros.-Discovery (“WBD”) for a reported $240
million per year."
[Note from Mike: Obviously, AEW has not expanded the sale of their media rights beyond AEW Collision and certainly, it is not a $240 million per year deal, except among those playing fantasy on social media.]
WWE's response continued, "With the truth so far divorced from the FAC, it is no surprise that MLW’s antitrust claims are inherently doomed. MLW has not and cannot plausibly allege relevant product or geographic markets around media rights for professional wrestling. MLW has not and can never plausibly allege direct or circumstantial evidence of WWE possessing monopoly power over television networks and streaming services. And MLW has not and can never plausibly allege antitrust injury or standing when it and other alleged competitors are, by public admissions, thriving. As for MLW’s tacked-on state law claims, the Court should dismiss them for lack of diversity and/or supplemental jurisdiction and because they remain as facially implausible as they were in MLW’s original complaint."
Back in March, Major League Wrestling an amended lawsuit against World Wrestling Entertainment before the United States District Court, Northern District of California, San Jose Division. That amended lawsuit, totalling 44 pages with an additional filing breaking down all the changes from the original January 2022 lawsuit filing, had been expanded to include MLW alleging "WWE’s predatory conduct further impeded MLW in its ability to compete in the licensing of its programming for distribution on streaming services and continues to threaten to deprive MLW of its ability to license its programming for distribution on cable. As a result of WWE’s misconduct, MLW is at risk of its business being irreparably destroyed. In February 2023, MLW’s new media partner -- Reelz -- announced a distribution deal with streaming service Peacock. But as a direct result of WWE’s exclusivity arrangement with NBCUniversal, which prohibits any other professional wrestling programming on Peacock, MLW’s programming is excluded from this streaming deal, which further suppresses competition in the Relevant Market. MLW also is reportedly at risk of losing its cable deal with Reelz as a result of WWE’s exclusivity with Peacock."
MLW exited REELZ after 13 episodes, but REELZ later issued a statement to PWInsider.com that the two sides were in discussion about additional "seasons." The belief upon MLW's REELZ debut was that the two sides had agreed to a multi-year deal but upon the announcement of the REELZ-Peacock alliance, the MLW series was downplayed greatly in comparison to its initial weeks on the cable broadcaster.
WWE also continued to argue that MLW failed to allege plausible claims against the company, specifically when it comes to MLW's definition of their product market. WWE argued:
"This Court previously held that MLW failed to provide an “understanding of the characteristics of the relevant market, including the existence or lack of substitutes.”
Further, the Court held that MLW failed to include allegations “addressing why other ‘sports entertainment’ or ‘media’ content” are not substitutes” for professional wrestling content from the perspective of its purchasers, i.e., television networks and streaming services. MLW has done nothing to correct these blatant defects.
First, MLW is wrong that professional wrestling is a “sport” and, thus, its media rights constitute a relevant product market as a matter of law. The Court already rejected this
argument, requiring MLW to plead “facts . . . to support that legal conclusion.” Those facts remain absent in the FAC. Even if sports were inherently relevant product markets, MLW
admits, as it must, that professional wrestling is not a sport but a form of “scripted” and “predetermined” entertainment. Given these admissions, MLW must allege with factual
support that a television network or streaming service would not consider a Rocky movie, a reality TV show, or any other form of scripted entertainment as reasonable substitutes for professional wrestling. It has not.
Second, MLW still fails to plausibly allege that professional wrestling content is not reasonably interchangeable with other media content. MLW admits that television networks and
streaming services are the purchasers of professional wrestling media rights. MLW also admits that not all television networks and streaming services purchase professional wrestling media rights.
Finally, MLW admits that some networks and streaming services replace professional wrestling with non-wrestling content, or vice versa. (VICE not alleged to have replaced MLW with other wrestling); (after WWE acquired World Championship Wrestling in 2001, TBS and TNT did not air professional wrestling for 18 years until it acquired AEW’s media rights). Given that networks and streaming services clearly switch between purchasing professional wrestling and purchasing other forms of scripted media content, MLW has failed to allege any facts plausibly defining a narrow product market around just professional wrestling media rights.
To the contrary, the FAC suggests that television networks and streaming services view professional wrestling as just one of many interchangeable genres of content.
Third, WWE’s purported exclusivity provisions with NBCU and FOX do not support MLW’s narrow market definition.
MLW has not alleged how contractual limits on NBCU and FOX speak to what content television networks or streaming services “in general might [purchase] interchangeably.” Id.
As the Court previously held, MLW has a “duty to plausibly allege the contours of the product market, which necessarily requires allegations that speak to the question of substitute products.” Once again, it has not done this. Once again, MLW’s monopolization claims should be dismissed for this reason alone."
WWE also argued that MLW continues to fail to plead an actual geographic market for their antitrust claims against WWE and that since "MLW admits that it and WWE compete with Japanese promotions (New Japan, etc.) and a Canadian promotion (Impact Wrestling), the Court should therefore strike this improper attempt at re-pleading and dismiss MLW’s antitrust claims for failure to plead a geographic market."
WWE also argued:
"MLW fails to allege direct evidence of WWE’s monopoly power in its purported relevant product market. MLW argues that WWE is a monopolist because it allegedly negotiated more lucrative media rights agreements from FOX and NBCU in 2018 that it did with just NBCU five years before. Stripped of conclusory allegations, however, the FAC fails to plausibly allege that WWE’s contracts reflect anything more than the fruits of lawful competition. First, MLW contends that the alleged increase in WWE’s revenues from FOX and NBCU, standing alone, prove WWE’s ability to “control prices.”
This is a conclusion without factual support. MLW merely alleges that, in 2014-2019, WWE had a single contract with NBCU for two programs, WWE RAW and WWE SmackDown, valued at $130 million per year for five years. MLW then alleges that, in 2018, WWE negotiated separate media rights agreements with FOX for WWE SmackDown and with NBCU for WWE RAW and WWE NXT that, collectively, are valued at $470 million per year over five years. Finally, MLW alleges that WWE entered into yet another agreement with NBCU to move its WWE Network platform and its subscribers to NBCU’s streaming platform, Peacock, for $200 million per year over five years.
What is missing is a single allegation about these contract negotiations, much less even a suggestion that WWE “controlled” or dictated terms to NBCU or FOX, two of the largest media companies on earth. MLW fails to allege any facts excluding equally plausible explanations for WWE’s increased revenues, such as new competition between FOX and NBCU for WWE content or NBCU’s desire to obtain the WWE Network’s existing base of streaming customers for its fledgling streaming platform.
Cases finding monopoly power based on price increases involved facts not remotely similar to those alleged here.
Second, MLW contends that alleged exclusivity provisions in the FOX and NBCU contracts are direct evidence of monopoly power. Of course, as WWE previously explained, exclusive contracts are not per se indicia of monopoly power. MLW fails to allege facts plausibly suggesting that these exclusive contracts are the result of anything but WWE and two purchasers’ mutual desire for exclusivity.
Third, MLW does not and can never plausibly allege that WWE possessed “monopoly” power over FOX and NBCU (or any other media company). In Dentsply, Dentsply had power because it provided distributors with 83% of their revenues. As such, a dental distributor would lose 83% of its revenue if it did not deal with Dentsply. Here, FOX and NBCU allegedly provide WWE with 85% of its revenue. Thus, under Dentsply’s reasoning, FOX and NBCU have power over WWE, not the other way around. Furthermore, MLW still has not explained, nor could it ever explain, how WWE possibly controls the purchasing decisions of dozens of large media companies that derive zero revenue from WWE."
WWE also argued that MLW did not show any circumstantial evidence of WWE's alleged monopoly power, noting, "MLW could never allege facts to establish revenues as an appropriate measure of market share. Market share reflects the pieces of the pie for which competitors are competing. WWE’s alleged competitors are not competing for a fixed pool of revenues. If FOX, for example, did not renew its contract with WWE, FOX might still purchase wrestling content to fill its 8:00- 10:00 PM Friday timeslot. However, MLW could not plausibly allege that FOX would pay it or other professional wrestling promotions the same $205 million for their content. In fact, no allegations even plausibly suggest that FOX would replace WWE with professional wrestling content. It could just as plausibly spend that $205 million on a medical drama or dating show."
They also argued that AEW's ability to sell and grow their media rights over the last four years shows "such monumental growth renders any claim of barriers to entry implausible", shooting down MLW's argument that WWE has worked to make it impossible for others to enter the genre. It also noted that other entities, mentioning WOW and AEW, have not filed antitrust lawsuit against WWE.
In regard to allegations of anticompetitive conduct by WWE, they argue that MLW failed to "Allege Substantial Foreclosure of Television Networks and Streaming Services." In that response, WWE argued:
"MLW does not contest that there are dozens if not hundreds of television networks and streaming services. Nor does MLW contest that at least 20 television networks and streaming services currently or recently purchased professional wrestling content. MLW argues, however, that it and every other wrestling promotion is “substantially foreclosed” from the market if it cannot enter into media rights agreements with WWE’s two customers, FOX and NBCU, during WWE’s brief, five year period of alleged exclusivity. Otherwise, somehow, WWE’s competitors are cut-off from 92% of the possible revenue that wrestling promotions can generate through the sale of media rights.
As explained in WWE’s moving brief, this argument is wholly implausible and unsupported by either case law or MLW’s own allegations.
First, MLW does not sufficiently plead that revenues are an appropriate measure for foreclosure. MLW cites cases that measured foreclosure through revenues based on their facts. Yet it also cites an influential treatise for the proposition that volumes sold rather than revenues can be an appropriate measure of foreclosure.
MLW fails to allege facts in the FAC establishing that revenues are a more appropriate measure of market foreclosure than other, equally plausible measures, such as the number of available networks or streaming services. Second, it makes no rational economic sense to measure foreclosure in the alleged market with revenues. This theory requires the Court to accept the facially implausible idea that wrestling promotions compete for a limited, fixed pool of revenue. Yet AEW just secured an increase in its annual media rights from allegedly $48 million to reportedly $240 million.
Clearly, WWE’s contracts with NBCU and FOX did not foreclose AEW from securing nearly $200 million more per year in media rights revenues. Third, MLW cannot rely on Dentsply or Microsoft to argue foreclosure from “key” purchasers of broadcast rights.
These cases stand for the proposition that control over a limited number of distributors can entrench a monopolist if access to those distributors is necessary to viable competition. MLW alleges that twenty networks and streaming services are the “key” purchasers of professional wrestling media rights. Yet, as WWE explained, MLW fails to allege why these twenty purchasers are necessary to viable competition, or why other networks or streaming services would not consider purchasing professional wrestling media rights for potentially millions of dollars. Fatal to this argument, if MLW had drafted its list of “key” purchasers in 2017, it would exclude two of the three biggest current purchasers of professional wrestling media rights: FOX and WBD.
Fourth, even if MLW had alleged that there are only twenty “key” purchasers of professional wrestling media rights, it has also alleged that WWE only has contracts with two of them. This is in stark contrast to Dentsply, where Dentsply had exclusive contracts with 23 “key” dealers.
Fifth, MLW has not plausibly alleged that it factually suffered foreclosure in any respect. At most, MLW alleges only it attempted to sell its media rights to Tubi and VICE, and that it successfully sold its media rights to Reelz.
Fatally, MLW never alleges that it attempted to sell its media rights to any of the other supposedly “key” purchasers but was told by them that a deal was impossible because of WWE. Indeed, AEW just renegotiated its contract with WBD and WWE’s alleged five-year contracts with FOX and NBCU will expire in 2024, but MLW does not allege that it even contacted these companies, much less attempted to compete for their business. And contrary to MLW’s allegations that its business relationships are at risk, Reelz extended MLW’s initial ten-week trial run, and MLW just announced multiple “hugely important” media rights agreements with FITE."
WWE also argued that MLW's claim that WWE "“lock[s] up the intellectual property rights of professional wrestlers" is untrue "because it contracts with former WWE talent who retain rights to their intellectual property created prior to joining WWE."
WWE also argued that MLW has not credibly claimed harm to competition or antitrust standing. WWE argued, "At most, MLW alleged that it lost two contracts, which standing alone is not sufficient to plead harm to competition."
WWE noted that since they initially filed their original lawsuit, MLW had sold media rights to REELZ, noting,
"MLW attempted to minimize this success through a reference to unsubstantiated online rumors (rather than its own interactions with Reelz) that WWE’s exclusive contract with NBCU’s Peacock would cause Reelz to cancel MLW programming prematurely. Yet Reelz did not cancel MLW. Instead, it continued to purchase and air MLW content beyond an initial ten-week trial period.
Separately, MLW plead that WWE somehow blocked it from selling its media rights to FITE, a streaming platform, despite the fact that WWE has no alleged contractual relationship with FITE. In actuality, MLW just announced a new, “hugely important” agreement with FITE, and MLW’s weekly program, Fusion, is now available on FITE+, beIN Sports, and YouTube, and MLW entered into yet another agreement with FITE to air its premium live events, similar to how Peacock airs WWE’s premium live events.
MLW may feel that these successes pale in comparison to those of upstart AEW, but MLW fails to plausibly tie its disappointment to actual conduct by WWE. Under no theory can MLW credibly articulate competitive harm."
Third, even if the Court accepted MLW’s implausible allegations of interference with Tubi and VICE, MLW still has not alleged harm to competition. The FAC demonstrates that alleged competitors such as AEW and WOW are thriving, expanding the amount of content they sell, and making millions of dollars in the process.
That is even truer now. As a recent WBD press release states, “In only four years following the launch of ‘AEW: Dynamite,’ AEW’s
footprint has more than doubled across TNT and TBS.” TBS and TNT are now “doubling-down on wrestling” by adding another two hours of AEW programming to its lineup. The reported value of this new media rights agreement is $240 million per year. Given AEW’s success in the market in only four years, MLW could never plausibly allege that WWE uses monopoly power to foreclose competitors in the purported relevant market.Fourth, MLW does not plausibly allege that networks or streaming services paid supracompetitive prices or were denied choices for professional wrestling media rights. MLW rests entirely on alleged increases in WWE’s media rights fees from two purchasers, FOX and NBCU.
As discussed above and in WWE’s moving brief, however, MLW fails to allege any facts excluding equally plausible explanations for WWE’s increase in media rights fees. MLW similarly fails to allege that FOX or NBCU even considered purchasing professional wrestling content other than WWE. Finally, MLW admits that the number of choices for producers of professional wrestling content keeps expanding, and that numerous purchasers are acquiring professional wrestling
content if they want it.Fourth, MLW does not plausibly allege that networks or streaming services paid supracompetitive prices or were denied choices for professional wrestling media rights. MLW rests entirely on alleged increases in WWE’s media rights fees from two purchasers, FOX and NBCU. As discussed above and in WWE’s moving brief, however, MLW fails to allege any facts excluding equally plausible explanations for WWE’s increase in media rights fees. MLW similarly fails to allege that FOX or NBCU even considered purchasing professional wrestling content other than WWE. Finally, MLW admits that the number of choices for producers of professional wrestling content keeps expanding, and that numerous purchasers are acquiring professional wrestling content if they want it. Fifth, MLW has no standing to assert claims on behalf of the networks and streaming services that allegedly paid higher prices. As WWE explained, MLW would in fact benefit from such conduct because it would elevate the value of other professional wrestling media rights
WWE claimed that since MLW failed to adequately allege a federal cause of action, the Court would have to dismiss the remaining State law claims for lack of subject matter and jurisdiction.
They are also asking the court to block any attempts by MLW to amend their lawsuit should this version be dismissed, arguing "MLW can never plausibly plead that WWE has market power over television networks or streaming services, some of the largest and most powerful corporations on earth, all with the means and ability to produce their own professional wrestling content or buy it (or other genres of content) from the myriad of other content creators. Similarly, MLW could never plausibly allege harm to competition given its and AEW’s recently touted successes. Accordingly, any amendment to the federal antitrust claim is futile and, without that claim, the entire FAC must be dismissed."
MLW filed their Amended lawsuit back in March, alleging that WWE's exclusivity agreements (such as Peacock and NBC) causes violations of the Sherman Antitrust Act as it pertains to the pro wrestling media market in the United States. MLW has argued since it first filed its first lawsuit that WWE was engaging in unfair practices, including attempting to prevent Ring of Honor (then owned by The Sinclair Broadcast Group) from running Madison Square Garden when allegedly Paul Levesque stepped in to stop it temporarily, that WWE prevented AEW from booking an Arena in Cincinnati several years back and that WWE went after signed MLW talents, including Davey Boy Smith Jr. and Swerve Strickland, neither of whom are currently with WWE. MLW has maintained that WWE interfered with a MLW deal with FOX-owned streaming service Tubi, leading to that deal being canceled the night before it was to be announced and a potential deal with Vice TV, which only aired one original MLW special and several older MLW TV shows.
As noted, a hearing on the matter is set for 6/15.
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