The Hollywood Reporter
Roman Reigns and Kevin Owens wrestle during the WWE and Universal Championship match during the WWE Royal Rumble event at the Alamodome on January 28, 2023 in San Antonio, Texas.
A federal judge has found “circumstantial evidence” that WWE has monopolized the market for media rights to professional wrestling.
Rejecting a bid to dismiss an antitrust suit from rival outfit Major League Wrestling, U.S. District Judge Edward Davila on Thursday concluded that WWE could’ve violated antitrust laws by insisting on exclusivity agreements with media partners. He pointed to allegations that WWE has captured 92 percent of the revenue in the market, with the next largest competitor possessing just six percent.
The suit explores WWE’s allegedly anticompetitive conduct to box out competitors. MLW sued the Vince McMahon-led company last year for “unlawfully interfering with [its] access to media markets.” The complaint is wide-reaching in scope, accusing WWE of tampering with MLW’s media deals and barring its employees and venue partners from working with competitors. It pointed to deals with Tubi, Vice and Reelz that were allegedly broken due to WWE’s interference.
In turn, WWE argued that its doesn’t have the ability to control prices or exclude competition. That power, it said, lies in the hands on distributors that set the prices for the media rights to professional wrestling.
Davila, however, slammed the claim. WWE’s monopoly power can be inferred from its “possession of the predominant share of the market,” he wrote.
On top of MLW, WWE’s competitors include All Elite Wrestling, Impact Wrestling, Women of Wrestling, Ring of Honor and the National Wrestling Alliance, among others. While media rights deals for such programming generate roughly $725 million annually, WWE captures the bulk of it, with $670 million, according to the complaint. MLW claimed WWE’s current TV rights agreements, including those with Fox and NBCUniversal valued at a combined $470 million, are valued “well-above competitive levels.” For comparison, AEW’s licensing deal with Warner Bros. Discovery generates roughly $44 million per year.
The sky-high valuations for WWE’s rights are a result of the company employing anticompetitive tactics to prevent competitors from accessing certain distributors and arenas, MLW said. The complaint pointed WWE’s exclusivity agreement with Peacock preventing competitors from working with the NBCUniversal subsidiary’s partners, including Reelz. MLW had a cable deal with Reelz, which announced a distribution deal with Peacock in February 2023, but its content is excluded from the agreement because WWE has exclusivity with Peacock. As a result, MLW argued it’s at risk of losing the deal. WWE allegedly includes a stipulation in almost every TV licensing contract that prevents the station from broadcasting another professional wrestling promotion company on its network. The suit also cited WWE’s exclusivity provisions with Fox and NBCUniversal as well as the company directing at least two arenas that host its shows to cancel bookings by competitors.
Davila found these actions could “deter entry while permitting” WWE to “earn monopoly returns.” At the dismissal stage, he didn’t determine whether the so-called barriers to entry actually exist but rather that MLW sufficiently argued the possibility of their existence.
The decision arrives as WWE is trying to close a $21 billion deal to merge with Endeavor-owned UFC. If it goes through, the Ari Emanuel-led company will control a 51 percent stake in the new sports entertainment firm to be called TKO Group Holdings.
In the dismissal order, Davila also said that WWE’s exclusivity agreements with Fox and NBC rises to a potential violation of antitrust law because they’re considered the “two cable networks with the largest coverage in the United States.”
Findings of antitrust violations are rare in civil and criminal cases. Under antitrust laws, the mere possession of monopoly power isn’t illegal. There must be proof that a defendant engaged in anticompetitive conduct. Not all aggressive business conduct is considered anticompetitive either, even if such conduct forces rivals out of the market. In the Federal Trade Commission’s antitrust suit against Qualcomm, a federal appeals court concluded that the chipmaker’s actions at the center of the suit were simply a “profit-maximizing policy.” Courts have generally found violations of antitrust law in circumstances where deals have a substantial effect in preventing rivals from entering the market, which Davila said there could be in MLW’s suit against WWE.
In the complaint, MLW also claimed that it entered into a lucrative agreement with Tubi in 2021 that was killed when a WWE executive pushed Fox to terminate the deal by threatening to pull popular programs. Tubi is owned by Fox, which airs WWE Smackdown.
Additionally, MLW accused WWE of interfering with prospective deals it had with Vice TV. WWE senior vp Susan Levison allegedly “warned VICE to stop airing MLW programs, saying that Vince McMahon was ‘pissed’ that VICE was airing MLW content and wanted VICE to stop doing so.”
WWE didn’t respond to a request for comment.
Source: Hollywood Reporter
