Former WCW Wrestler Files Lawsuit Over WWE Network Royalties
According to PWInsider, former WCW tag team champion Marcus “Buff” Bagwell filed a lawsuit against WWE in US District Court of Connecticut this past Tuesday, claiming he is owed royalties from his matches airing on the WWE Network.
Bagwell’s suit mentions that he was under contract to WWE from 1991 to 2001 after WWE purchased his contract when they purchased World Championship Wrestling. Bagwell was signed to a new deal with the World Wrestling Federation in June 2001, for WWE’s WCW brand, but was subsequently released following a botched main event against Booker T.
The lawsuit claims the WWE deal “merged” with his former WCW contract, originally signed in 1998, and that the WWE contract stated: “This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and all prior understandings, negotiations and agreements are merged into this Agreement. There are no other agreements, representations, or warranties not set forth herein with respect to the subject matter hereof. . .”
Bagwell says that WWE is bound by his June 2001 WWE contract in regards to payment of royalties for pay-per-view events and home video content. Bagwell’s suit claims that WWE has ignored the following terms from the contract. It should be noted that WCW mentions in these two paragraphs refers to WWE’s WCW brand.
PPV events: “WCW shall allocate 5% of the Net Receipts paid to WCW with respect to the direct sale by WCW of WCW Pay-Per-Views to a talent royalty pool. Thereafter, WCW shall pro-rate payment to Plaintiff and all other talent appearing in such WCW Pay-Per-Views in the same proportion as was the compensation paid to Plaintiff for his appearances in the pay-per-views to the total amount paid to all talent for their appearances on the pay-per-views.”
Home video content: “The WCW Video Product is a compilation or derivative work of multiple individual WCW Pay-Per-Views in their entirety, such as a collection of videos, e.g., a WrestleMania box set, payment to Plaintiff shall be calculated as follows: 5% of the Net Receipts paid to WCW shall comprise the talent royalty pool, which shall first be pro-rated based on the number of individual videos in the compilation, and then the payment to Plaintiff for each video shall be consistent with the royalty payment to the Plaintiff at the time each individual video was first released.”
Bagwell notes that the Net Receipts mentioned above would be the gross amount received by WWE, questioning what’s allegedly owed to him as the WWE Network grossed $154.9 million in the final quarter of 2015 and they stream the old WCW pay-per-view events that he performed on. Bagwell also believes he is owed royalties from the WWE Network because language in his 2001 WWE contract said, “video cassettes, videodiscs, CD ROM, or other technology, including technology not yet created.”
Bagwell’s suit also claims that when he was released in August 2001, language in that release agreement noted that WWE was buying out all obligations from his contract, except for royalties that would be owed in the future, as determined by the contract. The release agreement also contained language that said Bagwell could not bring legal action against WWE as long as they stuck to the terms of the release agreement. Bagwell is alleging that WWE broke the agreement by not paying him royalties. The lawsuit also includes a 2016 First Quarter royalties statement sent to Bagwell by WWE, stating that they owe him no royalties. Bagwell does acknowledge that he was owed no royalties for pay-per-view or home video under his 1998 WCW deal, but he claims he’s now owed for that content because the WWE contract changed the terms.
The lawsuit also acknowledges that WWE successfully defended itself against similar allegations from Eddie Gilbert’s estate, former GWF wrestler Stevie Ray and former AWA star Doug Somers, but that those wrestlers had no contractual rights to sue the company. Bagwell says that he has the right to sue WWE because of WWE breaking the agreement.
Bagwell also says his WWE contract allows for him to have his own independent certified accountant do an audit of the books for WWE’s WCW brand. Bagwell claims he tried to have an audit done in June 2016 but was initially told it could be done in late July or early August of this year. He was then informed by WWE lawyers that there would be no audit because Bagwell’s accountant “asserted a pretextual and invalid audit request to attempt to stealthily obtain that information (WWE Network royalty audit)” and that “there is nothing to audit” because Bagwell is not paid WWE Network royalties. Because WWE blocked the audit attempt, Bagwell claims they have forfeited any claim that he did not satisfy their prerequisite actions before filing the lawsuit. The lawsuit also serves as an official dispute of WWE’s 2016 First Quarter royalties statement.
The lawsuit is set up as a class-action suit for talents facing similar situations. Talents who signed a WWE Legends deal from 2004 on are exempt from the class as terms in those deals specifically note that WWE will not pay royalties for “Internet subscriptions or video on demand fees.”
Bagwell’s suit is asking the court to prevent WWE from placing pay-per-view and non-PPV material on the Network until the class is paid royalties and that the class be paid within 90 days of the end of a financial quarter.
Bagwell is asking for a trial by jury. WWE has until November 9th to file a motion to dismiss the lawsuit but PWInsider reports that they have not been served with the lawsuit yet, as of Wednesday.
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