The Wrestling Observer Newsletter reports that there is a potential class action lawsuit in the works over royalties and the WWE Network. Apparently many former WWE talents are aware of the suit and have expressed interest in getting involved.
The argument has to do with the WWE Network taking the place of DVDs and Blu-rays, causing the revenue from those sources to drop, and the feeling that wrestlers should be entitled to revenue from the replacement.
Doug Somers and Eddie Gilbert's family have unsuccessfully tried to get royalties from having clips shown on regular WWE TV but The Observer noted that this situation is different.
WWE Sued By Rene Dupree Over Potential WWE Network Royalties
While WWE has had a number of victories in court last month, just as the dust cleared from WrestleMania weekend, they were named in another lawsuit. Yesterday, Rene Goguen, best known as Rene Dupree, filed a lawsuit against the company in federal court in WWE’s home state of Connecticut. The main thrust of the complaint is that Dupree has not been paid royalties for his matches being aired on WWE Network Just over a week ago, Dupree had been asked on the Two Man Power Trip of Wrestling podcast about the rumors of such a lawsuit being shopped to wrestlers, and here’s what he had to say:
“I wish they would pay me for the WWE Network because I think everyone who is on it should get some type of royalty off of that. Because I guess you are still part of the company in some way if they are showing your stuff, but at the same time they say that nobody watches the “old stuff”. Well take off all the old stuff off and watch your f–king subscriber count drop within six months. You know there is a lawsuit coming from that as well? They are being sued by everybody. They are being sued with the concussion lawsuit, the guys with the royalties and also the investors. Remember when they lost like 400 million dollars in one day? They pissed off a bunch of people and a bunch of investors are suing them too.”
When asked if he was a potential plaintiff, Dupree replied that “I cannot confirm or deny, I plead the fifth” while laughing. That was the last he said publicly about the potential lawsuit before it was filed yesterday.
I reached out to Jerry McDevitt, WWE’s outside counsel, for comment on the lawsuit, and here’s what he provided us in response:
“Aside from the complete lack of merit, the fact there are numerous decisions precluding the non-contractual claims, and the fact that the contract does not give him any rights that relate to the WWE Network, Goguen signed an agreement in 2011 which we believe precludes these claims. I do not think he told his lawyers about the above agreement, and they were notified of it last night with the obvious demand that the lawsuit be dismissed. They thanked me for telling them, and said they would look into it, which to me confirms he did not tell them.”
McDevitt later added that the 2011 agreement was not a WWE “Legends’ Contract.”
The 19 page complaint, can also be viewed on Archive.org) focuses primarily on the language regarding home video royalties in Dupree’s 2003 Talent Booking Contract with WWE. Subsequent to Dupree signing with WWE (believed to be about 2004 when WWE launched the WWE 24-7/WWE Classics on Demand subscription video on demand service; an online version was added later), this language was added to the standard contract (emphasis mine):
7.5 No Royalties Paid to WRESTLER. Except as specifically set forth in Section 7.1 through 7.3 above, WRESTLER shall not be eligible for any payment or royalties with respect to any other goods, services or otherwise including without limitation to the following: television license fees; television subscription fees; internet subscription fees; subscription video on demand fees; magazine subscription fees and/or advertising; and/or distribution fees of any kind paid to PROMOTER by any entity in connection with the exploitation of the Intellectual Property.
Dupree’s attorneys (Clinton A. Krislov and Matthew T. Peterson of Krislov & Associates in Chicago and Brenden Leydon of Tooher Wocl & Leydon in WWE’s home town of Stamford, CT) are arguing that under the language of the contract Dupree signed in 2003, he’s entitled to royalties from WWE Network. There are various sections of the contract entitling him (or anyone else who signed this version of the contract) to various different royalty rates on different forms of WWE Video Products. Those are defined in the contract as (emphasis taken from the complaint) “video cassettes, videodiscs, CD ROM, or other technology, including technology not yet created,” In addition to WWE Network, the complaint argues that this language should also include licensing fees that WWE gets from Netflix.
The basic argument of the complaint is that…
Defendant breached its Booking Contract with Plaintiff by selling WWE Video Products (streaming videos on the WWE Network) of PPVs and Non-PPVs without paying any royalties to Plaintiff. Plaintiff assigned his intellectual property rights in perpetuity to WWE in exchange for royalty payments from the sales of WWE Video Products of PPVs and Non-PPVs.
Defendant breached its Booking Contract with Plaintiff by licensing WWE Video Products (streaming video) of PPVs and Non PPVs without paying any royalties to Plaintiff.
Dupree’s lawyers are also trying to have the case certified as a class action lawsuit, which means that others similarly situated could join in. Here’s how they’re trying to define the class:
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.
They then split the class into two sub-classes for WWE performers and non-WWE performers who were signed to promotions that WWE bought the video libraries of. I’m just a layman, but the way this is laid out in the complaint seems like it’s opening them up to plenty of scrutiny for WWE, as they make sure to note the contract language entitling wrestlers to home video royalties going back to 1980 (which may not be entirely accurate in the first place) while ignoring the aforementioned language about not being entitled to royalties from “television subscription fees; internet subscription fees; [and] subscription video on demand fees” that has been there for the past decade or so.
There have been other lawsuits like this in the past, but they didn’t involve plaintiffs with a WWE Talent Booking Contract. Doug Somers’ lawsuit over using his AWA matches failed, as did Steve Ray’s lawsuit over ESPN airing matches from herb Abrams’ UWF, while Doug and Tommy Gilbert (with Tommy representing his son Eddie’s estate) dropped their lawsuit against both WWE and ESPN over various footage of Eddie and Doug in the GWF, ECW, and WCW.
WWE HIT WITH A POTENTIALLY DEVASTATING LAWSUIT By Dave Scherer on 2016-04-07 15:20:00
The Hollywood Reporter has a story today noting that former WWE wrestler Rene "Dupree" Goguen has filed a lawsuit against WWE over how royalties should be paid to performers for content that features their likeness when it airs on The WWE Network.
In the suit, which was filed in a Connecticut Federal court yesterday, Goguen has asked that the "booking contract" that he signed in 2003, which gave WWE ownership of using his likeness and made it their intellectual property, be interpreted to include payment for "technology not yet created." This is similar to the claim that Jesse Ventura made years ago against the then-WWF for using his likeness on products that had not been created at the time that the footage was recorded, such as videotapes. Of course, Ventura won that case.
Goguen has filed the suit as a class action effort to get royalties for all of the talents that signed contracts with WWE and any other company whose footage WWE has purchased, going back to 1980.
Obviously, this is a huge case for WWE. They will need to fight this one with everything they have because losing here would be very, very costly.
WWE did not return the media outlet's request for comment.
WWE Hit With Class Action Over Streaming Royalties
The wrestler known as "Rene Dupree" leads an effort over money from the company's over-the-top network as well as Netflix. 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 where 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, as well as videos put on Netflix.
According to the complaint filed in Connecticut federal court, Goguen signed a "booking contract" in 2003 where 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 five 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 to 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 other 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.
MORE DETAILS ON CLASS ACTION LAWSUIT BROUGHT AGAINST WWE OVER STREAMING ROYALTIES By Mike Johnson on 2016-04-08 12:06:00
PWInsider.com has acquired a copy of the 52 page lawsuit filed against World Wrestling Entertainment by former WWE performer Rene "Dupree" Goguen filed in United States District Court of Connecticut on 4/6 as a Class Action Complaint on behalf of former WWE performers who believe they are not receiving "contractually owed royalties" from WWE's usage of material featuring performers on streaming services.
While The Hollywood Reporter article Dave Scherer wrote about yesterday specifically covered the WWE Network, the lawsuit also cites WWE material on Netflix as well. WWE had a number of their DVD documentaries on Netflix from 2012-2015, but stopped providing new material to the service and began phasing out existing material after the WWE Network launched in February 2014.
Using Dupree's 2003 WWE contract as the basis, he claims that there were two different types of intellectual properties involved. Anything Dupree had created prior to his WWE run was his original IP while anything created during the time period he was signed with the company would remain WWE's IP.
The lawsuit noted that under that 2003 deal, WWE was required to pay Dupree and others twenty five percent (25%) of Licensed Product Royalties (that 25% is shared among all of the performers if more than one are featured on a product, so if six wrestlers appear on a WWE cup, for example, they share in the 25% royalty for that item).
In regard to 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."
In regard to 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."
The line about "including technology not yet created" is what Goguen is hanging his hat on when it comes to the WWE Network and other streaming devices, arguing that the technology falls under the "not yet created" banner from the contract he signed in 2003.
Goguen is arguing that by selling WWE Network subscriptions and by streaming WWE titles via Netflix (no mention of any other streaming services that feature or in the past, had featured WWE material) without providing royalties, WWE has effectively breached their contract with Goguen and others.
Goguen's lawsuit is meant to be a Class Action lawsuit for other performers allegedly in a similar situation, describing them as, "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."
The lawsuit filing claims the entire class could feature "hundreds, if not thousands" of performers "whose identities and royalties owed can be readily ascertained from Defendants’ books and records."
The class action was then broken down 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 were broke down by language in WWE's Booking Contracts for talents, noting the different changes as technology changed from VHS to DVDs, etc. 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 addresses the material WWE has acquired via the purchase of other promotions (WCW, ECW) or older video libraries (Mid-South, AWA, World Class, etc.), including performers who signed deals with WCW, ECW or other promotions over the course of those companies' individual runs.
In short, the lawsuit seeks to address whether WWE breached their booking contracts, whether talents are due royalties, whether the talents are due any damages. It claims that WWE has failed to pay royalties and that in their position of "superior knowledge, skill or expertise in managing such affairs", WWE had a duty to handle such for talents, who were placed in a "relationship of dependency" with WWE.
The lawsuit alleges, "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 claiming that Plaintiffs would be owed in excess of $5 million dollars.
WWE attorney Jerry McDevitt told The Hollywood Reporter that a contract Goguen signed in 2011 would prevent him from bringing a lawsuit against the company but declined to discuss in further details, citing privacy. McDevitt said that he informed Goguen's attorneys of that and that they were, at the time, unaware.
Rene Goguen, best known as Rene Dupree, recently filed a lawsuit against WWE over not being paid royalties for his matches being aired on WWE Network. F4WOnline.com now reports that the lawsuit is already dead.
Goguen’s lawyers reportedly pulled the suit on Monday. The move was likely made after finding out from WWE’s attorney Jerry McDevitt last week of a contract that they were not aware of that Goguen signed in 2011. The contract in question reportedly addresses the issue of royalties and subscription fees.
Goguen’s lawyers sent a note of voluntarily dismissing the case to U.S. District Court in Connecticut, where they had filed the case just last week.