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Some updates on the lawsuit Flosports, Inc. brought against EVOLVE parent company WWNLive Inc. back in September.
The lawsuit, seeking $1 million in damages, was originally filed in the United States District Court of Travis County, Texas revolves around allegations that WWN, run by Sal Hamaoui and Gabe Sapolsky, had "robbed Flosports" by provided false information that led to the streaming provider paying inflated prices for WWN content.
WWN filed a motion on 11/13, requesting the lawsuit being dismissed, citing that the suit was filed in a venue (Texas) that lacks jurisdiction over WWNLive. Flosports had argued the case should be heard in Texas since they were doing business with WWN in that State. In their 22-page filing, WWN argued that their business was based in Florida, as are its business records and bank accounts. They noted that their only dealings in Texas were WWN President Sal Hamaoui traveling to Texas in October 2016 and January 2017, the first trip to meet with Flosports during the courtship period and the latter to sign the deal. WWN's response noted multiple times in the filing that Flosports had initiated their business relationship, that WWN was not contractually obligated to focus their business in Texas and out of the 53 events they promoted under their deal with Flosports, only two were held in the Lone Star State. The majority of the events were held in Florida.
WWN also argued that the court case being held in Texas would be a hardship for the company as those with working knowledge of the company live in Florida (Hamaoui) and Massachusetts (Sapolsky) and holding the case in Texas would force them to travel regularly to Texas, a venue that could not be considered a "home" venue for them as they have no holdings or business deaiewlings or connections to the community there.
WWNLive also argued that Flosports has failed to actually state a claim regarding their allegation there has been "negligent misrepresentation" on the part of WWNLive. Flosports' lawsuit alleges that "WWN negligently or otherwise misrepresented the number of fans purchasing pay-per-view and video-on-demand access to their fighting events. When pressed for the data that backed up WWN’s spreadsheet of viewership, WWN originally claimed it had lost or deleted that information. Ultimately, WWN sent records listing many subscribers more than once and including purchasers of DVDs instead of broadcast services. Even with that artificial inflation of viewership, the numbers WWN attempted to account for were far less than those represented in its initial spreadsheet." Thus, "WWN induced FloSports to pay it hundreds of thousands of dollars based on data that was not only inaccurate and unreliable; it was just plain false."
WWNLive responded by denying there were any falsehoods in the Spreadsheet data Flosports received from WWN, noting, "That data was pulled from and compiled by a now-defunct third-party company named Fineline Hosting that was based in Florida." WWN is arguing that since the data was compiled by a Florida company (one that is now defunct) and was emailed to Flosports from Florida, there is no actual merit to claiming "negligent misrepresentation" in the state of Texas - even if there was indeed inaccurate information.
WWN also argued that the "negligent misrepresentation" was just a repackaged claim that was derivative of Flosports' allegations that WWNLive had breached their contract with Flosports. Flosports had claimed, "Negligently or otherwise WWN misrepresented the number of fans purchasing pay-per-view and video-on-demand access to their fighting events. WWN did not use reasonable care in obtaining or communicating the information. The misrepresentations and omissions were material. A reasonable person would attach importance to and be induced to act on WWN’s representations. WWN had reason to expect that FloSports would rely on its representations, and FloSports did, indeed, reasonably and justifiably rely upon them."
Flosports alleged that they have "Invested time and money that it will never recover in the market" noting, "since viewership drives FloSports’ subscription-base and its advertising revenue, WWN’s misrepresentations robbed FloSports..." WWN responded to that, citing, "Texas law is unequivocal, however, that benefit of the bargain damages are not recoverable for a claim of negligent misrepresentation" and claim that Flosports' own language in the lawsuit admits such, therefore the negligent misrepresentation count should be dropped.
The FloSlam streaming service officially launched in October 2016, but PWInsider.com is told by sources that conversations with WWN began as early as January 2016. At that point, FloSlam was hoping to make deals with WWN, Ring of Honor and New Japan Pro Wrestling. In the end, WWN signed with FloSports first and the other two companies passed. The majority of the content on the streaming service came from WWNLive until their relationship was severed in September 2017. Since then, despite having active subscribers, Flosports has dropped the live streaming aspect of their Floslam offerings.
The Flosports situation has put a financial hardship on WWNLive as they bumped up the number of events they were running as part of the agreement to five a month and made a greater investment into talents, including signing Keith Lee and others. Flosports had failed to pay WWN during the final two months of their relationship, informed WWNLive of their plans to file a lawsuit while WWNLive was streaming a SHINE Women's wrestling event and canceled plans to stream several EVOLVE events the very weekend they were to take place. In total, WWNLive lost out on three months of expected revenue from Flosports and has greatly cut back their event schedule. Earlier this week, the company claimed in an email to fans they were negotiating with four streaming platforms, but did not specify what they may be.
WWNLive promotion EVOLVE is scheduled to run in New York and Massachusetts in December with those events being streamed on the Fite TV App, which WWN had been working with prior to their Flosports agreement.
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