Full Credit: PWInsider.com
Buff Bagwell has filed a lawsuit against WWE over alleged unpaid royalties in regard to usage of his matches on the WWE Network. Bagwell filed the suit in the US District Court of Connecticut on Tuesday alleging that the company should are bound by his 2001 WWE contract to pay him royalties as regards to PPV events and home video material.
Bagwell says he was under contract to WWE from 1991 to 2001 by virtue of his WCW contract which was purchased by WWE in March of 2001. He says that when he signed a new deal with WWE in June of that year, the contract “merged” with aspects of his former WCW terms. The filing states that his WWE contract said, “This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and 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…”
Because of that, he says that the contract in his WCW contract toward home video and PPV events is due to him. Those clauses read as follows:
PPV: “WCW shall allocate 5% of the Net Receipts paid to WCW with respect to the direct sale by WCW of WCW Pay-Per-Views to a talent royalty pool. Thereafter, WCW shall pro-rate payment to Plaintiff and all other talent appearing in such WCW 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 on the pay-per-views.”
Home Video: “The WCW Video Product is a compilation or derivative work of multiple individual WCW 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: 5% of the Net Receipts paid to WCW 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 each individual video was first released.”
Bagwell’s lawsuit says that when he was released in August of 2001, language in his release said that WWE was buying out all of their obligations from the two-month-old contract with the exception of royalties. He says that WWE breached the agreement by virtue of not paying the royalties he is due through income made by streaming the WCW PPV events on the Network, which grossed a total of $154.9 million in the fourth quarter of 2015. The language of his 2001 contract reads that home video royalties include “video cassettes, videodiscs, CD ROM, or other technology, including technology not yet created.”
Bagwell says that his contract allows for him to have his own independent, certified accountant audit WWE’s books on the issue, citing language in the contract that “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.” He claims that he tried to do so in June and was initially told that an audit could be done later in the summer, only to have WWE’s counsel say that there would be no audit because his accountant “asserted a pretextual and invalid audit request to attempt to stealthily obtain that information (WWE network royalty audit)” and that Bagwell isn’t paid Network royalties so there is “nothing to audit.”
Bagwell has requested a trial jury in the case and acknowledges that WWE has successfully defended itself against royalty suits by the likes of Eddie Gilbert’s estate and Doug Somers but says they had no contractual right to sue WWE, while he does due to the alleged breach of contract, and that his lawsuit “is not preempted by the Copyright Act because WWE owns the right to WCW copyrighted works featuring Plaintiff’s intellectual property, subject to royalty payment obligations for the sale of those copyrighted works.”
WWE has yet to be served with the suit and have not commented. They have until November 9th to file a motion to dismiss.