Connect with us

Photo Credit: WWE/MLW


MLW News

Full details on WWE’s motion to dismiss MLW lawsuit, Court Bauer responds

On Tuesday, WWE filed a motion to dismiss the lawsuit that was filed in January by MLW Media LLC. MLW’s lawsuit alleges that WWE interfered with potential streaming/television deals with Tubi and Vice TV.

WWE’s filing (via PWInsider) reads:

First, WWE moves pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss MLW’s federal antitrust claim because MLW failed to plausibly plead (1) a facially sustainable relevant market, (2) monopoly power or anticompetitive conduct, or (3) antitrust injury. WWE further moves to dismiss MLW’s remaining state law claims pursuant to Federal Rule of Civil Procedure 12(b)(1) because the Court lacks subject matter jurisdiction over them if the federal antitrust claim is dismissed.

Second, WWE moves pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss all state law claims should this Court exercises jurisdiction over them.

MLW’s claim for intentional interference with contractual relations is unsupported by factual allegations, and what allegations MLW pleads are entirely implausible. MLW’s claim for intentional interference with prospective economic advantage fails because MLW does not allege that WWE knew about MLW’s negotiations to sell a third party first-run programming, nor does MLW plausibly allege that WWE’s alleged single communication with the third party influenced its decision not to purchase MLW’s content.

Finally, MLW’s unfair competition claim fails because (1) it is not tethered to some other viable antitrust or tort claim, and (2) MLW lacks Article III and statutory standing to assert such a claim.

Finally, WWE moves pursuant to Federal Rule of Civil Procedure 12(b)(5) to dismiss MLW’s complaint for lack of personal jurisdiction because neither party is a resident of California, no harm specific to California is alleged, and none of the alleged misconduct took place in California.”

In the motion filed on Tuesday, WWE stated the following:

“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.”

WWE addressed claims that they violated the Sherman Antitrust Act:
“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’s response to the claims about MLW’s deals with Vice TV/Tubi  allegedly being blocked:

“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.

More on claims about the Sherman Antitrust Act:

“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 states that MLW has not explained how WWE controls 85% of the marketplace. WWE says that MLW used “some unexplained amalgamation of uncited 2020 viewership data for three wrestling promotions on cable and network television” to make their claim and that MLW’s lawsuit discusses four competitors but only uses the data from three competitors.

WWE states:

“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.”

More from WWE:

“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’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’s response to the Vice TV 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.”

Court Bauer’s response (via PWInsider) reads:

“Of course WWE is scrambling to dismiss. They don’t want this thing to go to court. I look forward to that opportunity.”


Got a news tip? Send us an email at newstips@wrestlingnews.co
Follow us on FacebookInstagram - Twitter





Comments
To Top