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MLW RESPONDS TO WWE'S MOTION TO DISMISS LAWSUIT

By Mike Johnson on 2022-04-25 11:06:00

MLW officially responded to World Wrestling Entertainment's motion to dismiss MLW's lawsuit against them on Friday 4/22 before the United States District Court, Northern District of California.  

The 19-page lawsuit filed by MLW this past January alleged intentional interference with contractual relations, intentional interference with prospective economic relations, a violation of the Sherman Antitrust act and more, including allegations that WWE interference caused the cancellation of a signed MLW deal with FOX-owned streaming platform Tubi and prevented ViceTV from coming to terms with MLW, each preventing MLW from acquiring revenue that would have come from those deals.

WWE went right for MLW's throat in their motion to dismiss on 3/15, responding, "MLW styles itself to be an “innovative startup” in the professional wrestling world with “cutting-edge storylines,” but the complaint tells a very different story. Since 2017, MLW has attempted to sell “broadcast rights” for professional wrestling content to television broadcast networks, cable networks, and streaming services.1 In that time, MLW alleges that a new entrant, All Elite Wrestling, exploded onto the scene and quickly captured a contract to sell broadcast rights for its professional wrestling program, Dynamite, to WarnerMedia for $43.8 million annually.   Further in that same time, MLW alleges that market incumbents WWE secured contracts with NBCUniversal and Fox to sell its US broadcast rights for two of its programs for a combined average annual value of $470 million, and Impact Wrestling (“Impact”) secured a contract to air on the cable channel AXS.   But not MLW. Despite some potential opportunities with the cable channel VICE TV (“VICE”) and streaming service Tubi, MLW is yet to sell broadcast rights for its wrestling program. Hundreds if not thousands of other potential buyers of broadcast rights exist, but MLW does not allege that it attempted to sell its content to any of them. MLW could start its own streaming service and reach consumers directly— as it acknowledges that WWE and Impact have done—but it does not allege to have tried that, either.   MLW has given up competing in the ring and chosen instead to compete in the courtroom. MLW brought claims for monopolization, intentional interference with contractual relations, intentional interference with prospective economic advantage, and unfair competition against WWE in a vain hope to shift blame for its failures away from itself. But MLW’s failings are its own. Its claims are meritless and should be dismissed as a matter of law.”

In MLW's response to WWE's motion to dismiss, MLW argued back:

"WWE’s motion to dismiss should be denied. WWE impermissibly relies on factual assertions—many provably false—that may not be considered on this motion, and, contrary to WWE’s contentions, MLW has properly pleaded all of its claims for relief.

On the antitrust claim under Section 2 of the Sherman Act, MLW need only allege that the defendant (1) possessed monopoly power in the relevant market and (2) willfully acquired or maintained that power.   Here, MLW unquestionably properly alleges both elements. First, MLW has pleaded the relevant market—broadcast rights for professional wrestling programs —and such a single professional sport or form of entertainment can, as courts have repeatedly recognized, constitute a market where, as alleged here, it attracts a unique audience limiting the number of economic substitutes.   MLW also alleges that WWE has monopoly power because, among other things, it holds 85% of the relevant market and has reduced the output of professional wrestling broadcasts.

Second, MLW has pleaded that WWE has willfully acquired and maintained that monopoly power by preventing MLW from distributing its programs through Tubi and VICE, by locking up wrestling talent and key networks with exclusivity agreements, and by other conduct to constrain competitors and competition. WWE argues that MLW’s claim is insufficient because, WWE contends, it does not allege facts “suggesting that WWE could possibly hold any power over the dozens, if not hundreds, of networks, cable, and streaming services with which WWE has no commercial relationships.”

However, a Section 2 claim is viable, where, as here, the monopolist “ties up the key dealers.” United States v. Dentsply Int’l, Inc., And contrary to WWE’s assertion, the antitrust laws are designed precisely to protect against WWE’s predatory acts preventing MLW from gaining a foothold in the market because those acts clearly injure competition in general. On MLW’s intentional interference with contractual relations claim, MLW alleges that it lost its Tubi contract as a result of Stephanie McMahon of WWE pressuring Tubi and Fox executives “to deny MLW a time slot that would compete head-to-head with WWE’s NXT programs” and “to terminate the agreement [with MLW] in its entirety.”

Contrary to WWE’s assertion, Rule 8(a) of the Federal Rules of Civil Procedure does not require MLW to detail, before discovery, WWE’s threats that led to the termination of the Tubi contract, particularly given that many of those details are peculiarly within WWE’s knowledge. While WWE claims that it is not plausible that it would threaten Fox because Fox is its principal distributor, that is not so and at most raises a factual issue precluding dismissal. In fact, courts regularly uphold as plausible claims based on defendants threatening their principal distributors and MLW alleges conduct by WWE no different from and no less plausible than that of those other defendants.

MLW has also properly alleged that WWE intentionally interfered with prospective economic relations by alleging that WWE’s threats to VICE led that company to abandon its negotiations with MLW to air new MLW content. WWE incorrectly contends that MLW must also allege that WWE knew specifically that the parties were negotiating the airing of MLW’s new content. Under California law, however that is not so—MLW need only plead, as it clearly does, that WWE knew that its actions would interfere with VICE and MLW’s economic relationship. As to MLW’s UCL claim, MLW has statutory and Article III standing because it alleges that WWE’s conduct was directed at harming MLW’s relationship with Tubi, a California resident, and MLW seeks to enjoin WWE from continuing to undermine MLW’s business. Accordingly, and as shown further below, the motion should be denied in its entirety."

MLW then, obviously, argued that all of their existing allegations stand under scrutiny and asked the court to rule the lawsuit should continue, or at the very least, allow MLW the chance to repair any flaws in the pleading that the court may side with WWE on.   They also noted that they are not currently bound at this juncture to reveal all the details of their allegations of tampering by the company.

MLW's response argued that WWE's previous claim that AEW had entered the marketplace "refutes the existence of substantial barriers to entry" for the pro wrestling business was a flawed argument, that WWE had blocked AEW from two arenas (which were not named or cited), and that WWE listed the very same barriers in their own corporate 10-K business filing, noting that "failure to recruit or maintain key performers 'could adversely affect [WWE’s] operating results.' "

WWE must reply by 5/16.   At that point, the court will make a ruling.

There is a lot of time to go on the case as there are no current hearings set until 9/29.

MLW VS. WWE LAWSUIT COVERAGE

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COURT BAUER COMMENTS ON WWE'S MOTION TO DISMISS MLW LAWSUIT
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FULL DETAILS ON WWE'S MOTION TO DISMISS MLW LAWSUIT, INCLUDING RESPONSE TO TUBI & VICETV TAMPERING CLAIMS
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3/15/2022 7:43 PM

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2/16/2022 10:59 AM

MLW SUCCESSFULLY SEALS PORTION OF WWE LAWSUIT, NXT ON SYFY TOMORROW, WWE TAPING TWO WEEKS OF SMACKDOWN IN NOLA AND MORE
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MLW VS. WWE LAWSUIT UPDATE
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MLW VS. WWE LAWSUIT UPDATE
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MLW VS. WWE LAWSUIT NOTES
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WWE STATEMENT ON MLW LAWSUIT
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MORE DETAILS ON MLW VS. WWE LAWSUIT, MLW ALLEGES WWE COST THEM DEALS WITH VICE TV & FOX-OWNED TUBI
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1/11/2022 8:15 PM

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1/11/2022 8:09 PM

 

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