WWE must face antitrust claims from rival wrestling promotion

(CN) — A San Jose federal judge has allowed all antitrust claims of a minor league wrestling company to continue against World Wrestling Entertainment.

Major League Wrestling claims that WWE is restricting its business by attempting to block MLW from media deals and venues, as well as threatening MLW wrestlers that they will never be hired by WWE if they continue wrestling for MLW.

The smaller promotion argued that WWE’s exclusivity agreements and conduct prevent other wrestling leagues from accessing the most prevalent media platforms with the most reach.

U.S. District Judge Edward Davila denied WWE’s motion to dismiss the case Thursday, finding that it has dominance in the market - specifically, 92% of all professional wrestling media rights revenue. Notably, WWE’s exclusivity arrangements with NBC and Fox had the effect of foreclosing two primary distribution channels to its rival wrestling leagues, including MLW.

“In addition to defining the relevant market and alleging WWE’s dominance in that market, MLW has also sufficiently alleged barriers to entry, as required to show circumstantial evidence of market power,” wrote Avila, a Barack Obama appointee.

Representatives for WWE did not respond to requests for comment before publishing.

Along with the exclusivity arrangements with distribution channels, MLW claimed that WWE uses its dominant position in the wrestling market to prevent its competitors from accessing certain arenas.

“These barriers, as alleged, are plausible ‘additional long-run costs that were not incurred by incumbent firms’ and that ‘deter entry while permitting incumbent firms to earn monopoly returns,’” Avila ruled.

MLW claims that WWE interfered with potential media rights deals on two occasions. According to the complaint, when WWE learned of a deal between MLW and Vice TV in July 2021 to air MLW content, a WWE senior vice president informed a Vice executive that WWE’s owner, Vince McMahon, wanted Vice to stop airing MLW’s content.

MLW claims that because of that call, Vice aired only a single episode of MLW’s content and stopped negotiating for more content from MLW.

Later that summer, in August 2021, MLW entered into a “lucrative” deal with streaming partner Tubi, owned by Fox Corporation, a WWE partner. The deal would have strengthened MLW’s brand and increased its valuation, according to the complaint.

When WWE learned of the deal,  a separate WWE executive allegedly contacted Tubi about the MLW agreement. Shortly after, Tubi scuttled the deal one day before it was to be publicly announced, MLW claims.

The smaller company further alleges that WWE engaged in “unlawful predatory conduct” by airing MLW’s content without permission, and “encouraging” MLW wrestlers to breach their contracts by disclosing MLW’s confidential business information.

“Accordingly, the Court finds that MLW has sufficiently alleged circumstantial evidence of WWE’s monopoly power,” Avila wrote.