11:57am PT by Eriq Gardner
WWE Hit With Class Action Over Streaming Royalties
As World Wrestling Entertainment (WWE) transitions from a time when it earned a good chunk of its revenue from pay-per-view telecasts to one when streaming platforms dominate, one of its former professional wrestlers is now asking a federal court to interpret an old contract that spoke of "technology not yet created."
On Wednesday, Rene Goguen (known in the ring as Rene Dupree as part of the group "La Resistance") brought a putative class-action lawsuit alleging he and others haven't seen money from the much-ballyhooed over-the-top channel WWE Network nor from videos put on Netflix.
According to the complaint filed in Connecticut federal court, Goguen signed a "booking contract" in 2003 in which WWE took ownership over a wide swath of intellectual property including his nickname, personality, character, costumes, props, gimmicks, gestures, routines and themes.
In return, WWE was obligated to pay out 25 percent of net receipts to a pool of wrestlers for licensed products as well as for video cassettes, videodiscs, CD-ROMs "or other technology, including technology not yet created" consisting of pay-per-view videos. Other video items like a WrestleMania box set had just a 5 percent royalty share for wrestlers.
In February 2014, WWE made waves by launching its own $9.99-per-month streaming network, which included videos of past live pay-per-view events as well as other wrestling-themed shows, and according to Goguen's lawsuit, this fits the definition of "other technology and/or technology not yet created" in the booking contract.
The lawsuit, aiming to represent those who signed booking contracts for the WWE and other professional wrestling outfits between 1980 and the present, asserts breach of contract, breach of fiduciary duty, unjust enrichment and a violation of the Connecticut Unfair Trade Practices Act, with millions of dollars in alleged damages being sought. Clinton Krislov and Brenden Leydon are the attorneys representing the plaintiffs.
In response, WWE attorney Jerry McDevitt tells THR that the problem with this lawsuit is that Goguen signed a contract in 2011 that destroys his ability to bring these types of claims. McDevitt wouldn't get into the specifics of this agreement, citing a provision on confidentiality, but he did say that he informed Goguen's lawyer last night. "His response back indicates he did not know about it," says McDevitt.
The WWE attorney wouldn't get into hypotheticals about potential lawsuits from other wrestlers perhaps not bedeviled by waiver, but he expressed a lack of worry, pointing to the outcome of ESPN's legal dispute with wrestler Steve Ray for the proposition that many claims will be preempted by copyright law.