The following originally appeared in this week’s Figure Four Weekly.
By David Bixenspan for F4WOnline.com
When Rene Dupree’s lawsuit against WWE over WWE Network royalties was quickly dropped a few months ago, the question coming out of it was not if there would be another such lawsuit, but when and with whom as the next plaintiff would be.
The answers? August 9th and Marcus “Buff” Bagwell.
The same lawyers that represented Dupree are representing Bagwell in the lawsuit, but this time, they appear to have done a bit more due diligence. The Dupree case was dismissed within days because he had not told his lawyers that, in 2011, he had signed some kind of agreement that gave up the rights to future claims against WWE.
On top of that, while he did sign the WWE booking contract that included language about video royalties for “other technology, including technology not yet created,” that language was rendered moot in his next contract. WWE contracts supersede/merge into each other, so when WWE junked the language in 2004, it meant that anyone who re-signed the newly-worded deals effective had never agreed to the “other technology language.” Those later contracts also exclude royalties from internet subscription feeds and video on demand.
So in finding the perfect plaintiff, the lawyers needed to find someone who:
1. Signed with WWE between approximately 1999 and 2003.
2. Did not ever re-sign after 2003.
3. Did not ever sign a legends deal or any other agreement with WWE that gives up certain rights to future claims.
4. Was sure enough that he or she would never be back in WWE that they were willing to sue.
Bagwell fits that bill. He was signed in 2001 for the planned original brand extension to go along with the WCW invasion, only to be released within weeks for a myriad of reasons. WWE did not inherit his Time Warner contract because it happened to expire the week of the sale, so he signed a deal with WCW Inc. (the intended umbrella within WWE for the “new” WCW) that was virtually identical to a WWE contract from that period. Bagwell’s lawyers paid special attention to this section:
“WCW shall maintain books of account related to the payment of royalties hereunder at its principal place of business. Wrestler or Wrestler’s designated independent certified public accountant who is a member in good standing of the AICPA, may at Wrestler’s sole expense examine WCW’s books insofar as they pertain to this Agreement 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.”
According to the complaint, Bagwell did indeed retain the services of an accountant, who “contacted WWE officials around June 23, 2016 to schedule a time to examine WWE’s books and was told the last week of July 2016 or the first week of August 2016 would be possible times to conduct an audit.”
However, on August 5th, they got a letter from K&L Gates (Jerry McDevitt’s law firm), which accused Bagwell and company of “assert[ing] a pretextual and invalid audit request to attempt to stealthily obtain that information (WWE network royalty audit).” The letter goes on to state that “neither [Plaintiff’s accountant] nor any other purported representative of Mr. Bagwell will be permitted to audit WWE accounting records. . . Because your client is not paid any such royalties (WWE Network), there is nothing to audit.”
As we noted with the Dupree case, the general idea of someone suing over a breach of the 1999-2004 WWE Talent Booking Contract does appear to have a superficially stronger case than the other wrestlers who have sued for royalties in the last few years. Those were all suits from wrestlers with contractual ties to no WWE (or ESPN, in the cases where they were also sued over ESPN Classic programming) based on various intellectual property claims. It doesn’t mean they’d win, but it’s fairly easy to understand the logic behind the suit.
However, Bagwell’s claim isn’t exactly what was being tried with Dupree, for reasons specific to his own case. He didn’t appear on any pay-per-views, leaving his lone Monday Night Raw appearances as the only match from his WWE contract on the WWE Network. They do have his WCW career up, though, so the argument is that because of the merger clause, the WWE royalty terms apply to his WCW work (“…all prior understandings, negotiations and agreements are merged into this Agreement. There are no other agreements, representations, or warranties not set forth herein with respect to the subject matter hereof…”
There are various problems with that argument, the first of which is that while he had signed with two different companies named WCW, WWE only bought WCW’s assets and not the company outright. There was no previous contract to merge. On top of that, Bagwell “assigned his intellectual property rights to WCW in consideration for other benefits, not for WCW Video Products royalties,” Here’s the relevant portion of the merchandising agreement Bagwell signed with the original WCW in 1998:
“Notwithstanding anything herein to the contrary, Wrestler expressly acknowledges and agrees that in no event shall Wrestler receive or be entitled to any share of any revenue derived by WCW from the sale or other exploitation of any of the Intellectual Property in connection with (i) any wrestling magazine published and distributed by WCW (or its licensees), or (ii) the sale or licensing in any medium, market or form of videocassettes of any wrestling matches or other events sponsored by WCW, or (iii) any telephone call-in lines (such as 800, 900, 511, or 976), or (iv) any pay-per-view wrestling matches or events.”
When reached for comment, Jerry McDevitt specifically pointed out that Bagwell was never promised royalties for videos of his WCW work. For what he *was* eligible for royalties on, Bagwell’s WWE royalty statement for the first quarter of 2016 has him getting $64.40.