PWInsider acquire a copy of the 52-page class-action lawsuit filed against WWE by Rene “Dupree” Goguen. He filed the suit in the United States District Court of Connecticut on April 6 on behalf of former WWE performers who think they aren’t getting “contractually owed royalties” from WWE using material featuring them on streaming services.
While the WWE Network is named, the lawsuit also mentions WWE material on Netflix. WWE had several documentaries on the service from 2012 to 2015, but stopped providing new material and removed their programs after the WWE Network launched in February 2014. Dupree’s lawsuit states that there are two different types of intellectual properties. Anything Dupree created before his WWE run was his original IP while anything he created in WWE would remain their IP.
Under his 2003 contract, which was used as the basis for the lawsuit, WWE was required to pay Dupree and others 25% of “Licensed Product Royalties”. The amount is shared among all performers if more than one are featured on a product.
The deal states for WWE PPV events: “WWE shall allocate 25% of the Net Receipts paid to WWE by licensees authorized to reproduce and sell video cassettes, videodiscs, CD ROM, or other technology, including technology not yet created (hereinafter referred to as “WWE Video Products”), of WWE Pay-Per-Views in their entirety (“WWE Pay-Per-Views”) to a talent royalty pool. Thereafter, WWE shall pro-rate payment to Plaintiff and all other talent appearing in such WWE 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 in the pay-per-view.”
For WWE videos: “WWE Video Products are a compilation or derivative work of multiple individual WWF 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: 25% of the Net Receipts paid to WWE by licensees 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 that each individual video was first released.”
“Technology not yet created” is what Goguen is using as the basis of the lawsuit, claiming steaming services fall under that category. He said that by selling WWE Network subscriptions and streaming WWE titles on Netflix (other streaming services aren’t mentioned) without providing royalties, WWE breached their contract.
The lawsuit states: “All individuals who have assigned their original and new intellectual property rights to WWE or a promotion that WWE has acquired the assets and/or the video library of, in exchange for perpetual royalty payments from WWE’s (or acquired promotion) or licensees’ sales of past pay-per-view events or non pay-per-view productions.”
It said the entire group of people could include “hundreds, if not thousands” of performers “whose identities and royalties owed can be readily ascertained from Defendants’ books and records.” It was divided into the following sections:
*Talents who signed from 2/21/80-1/1/92.
*Talents who signed from 1/1/92-1/1/99.
*Talents who signed from 1/1/99-1/1/04.
*Talents who signed from 1/1/04-1/1/12.
*Talents who signed from 1/1/12-4/4/16 (date of lawsuit filing)
The classes are separated by language in WWE’s Booking Contracts for talents. The current language reads: “product sale- the sale of any WWE authorized product, merchandise, consumer material or good, which is made by or on behalf of WWE.” The lawsuit also mentions the material WWE acquired by purchasing other promotions (WCW, ECW) or video libraries (Mid-South, AWA, World Class), including performers who signed deals with those companies. It claims that WWE didn’t pay royalties and in their position of “superior knowledge, skill or expertise in managing such affairs”, WWE had a duty to handle these affairs for talents, who were in a “relationship of dependency” with WWE.
The lawsuit adds: “Defendant has, in violation of its clear obligation, engaged in a massive and profitable scheme, pattern and/or practice of intentionally underpaying required royalties, expressly designed to enrich Defendants at the expense of the Plaintiff and the class he brings this claim on behalf of.”
The lawsuit is seeking over $5 million dollars for the plaintiffs. WWE lawyer Jerry McDevitt previously told The Hollywood Reporter that a contract Goguen signed in 2011 prevents him from filing a lawsuit but didn’t provide details for privacy reasons. He added that he told Goguen’s legal team about it and they were not aware.
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