PWInsider reports that the United States District Court of Connecticut has dismissed the lawsuit against WWE by Marcus “Buff” Bagwell and Scott “Raven” Levy over claims that WWE owes them royalties for using footage from them in WCW and WWE on the WWE Network. The lawsuit was filed in August of last year. It was dismissed with prejudice, which means that neither Bagwell nor Levy can bring the claims against WWE again. It’s unknown why the case was dismissed at this time, but filings seems to suggest the two parties were discussing a settlement.
Both men claimed that WWE breached their contracts by not paying direct sales royalties for material on the Network. WWE’s contracts say they give royalties for content under direct sales, which is named as “…including without limitation, at the arena, via mail order sales or directly on television, or via the Internet….” The two men claimed that WWE Network subscriptions counted as part of that, while WWE said that there was no sale of physical media with the WWE Network, just a license that a subscriber rents to view the content.
Levy claimed that talent should be paid for Network content with the same royalty rate they would get from PPV and video sales. He also said that once WWE bought the WCW and ECW libraries, they fell under the royalty rate he was promised on his contract for direct sale of WWE events. He said that when he was released by WWE in 2003, the agreement stated that WWE bought him out of any claims against them or money owed “other than the obligation to pay Levy the royalties due to him pursuant to, and as determined by, the Contract.” Bagwell made similar claims, stating that WWE didn’t pay royalties for WCW and WWE material that features him. He said that WWE breached an agreement they signed in 2001 when he was released. He said that WWE hadn’t paid him royalties within ninety days, was late in paying them and hadn’t paid any since February 2014 when the Network launched. He said this was another breach of contract.
The lawsuit also claimed that WWE breached its “fiduciary duty” to both because it was in a superior position in regards to finances and money owed. Bagwell said that his contract allowed him to have his own certified accountant audit their books. The contract said: “For the purpose of verifying the accuracy thereof, during WCW’s normal business hours and upon reasonable notice. Such audit shall be conducted in a manner that will not unreasonably interfere with WCW’s normal business operations. Wrestler shall not audit WCW’s books and records more than twice during any calendar year and no such audit shall be conducted later than one (1) year after the last statement of royalties is given, delivered or sent to Wrestler. Each audit is limited to seven (7) days in duration. Statements of royalties may be changed from time to time to reflect year-end adjustments, to correct clerical errors and for similar purposes.”
He claims he tried to do that in June 2016 and was told that while it could be done in late July or early August of that year, it was done by WWE’s counsel K&L Gates and Bagwell was told 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)”. WWE stated that since Bagwell is not paid royalties for the WWE Network, “there is nothing to audit.” Due to blocking the audit attempts, Bagwell claimed that WWE forfeited any claim that he didn’t fulfill any of his contract obligations before he filed the suit.
The lawsuit had stalled previous plans to add Sunday Night Heat and WCW Thunder to the Network, even though both complete runs were ready to go. Raven and Bagwell were featured heavily on those shows and new material could have added to the damages if the courts didn’t rule in WWE’s favor. WWE even looked into possibly removing content featuring the two from the Network, even though it would require a lot of work and money to do so. However with the case now dismissed, WWE can move forward and add whatever shows they would like, including the runs of Thunder and Heat in 2018. It also seems to suggest that talents will not be owed any royalties from material on the Network.
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