WWE denied motion to stop sellers of counterfeit merchandise

April 3, 2014

According to the Hollywood Reporter, the U.S. District Court for the Eastern District of Louisiana denied the WWE’s request for a temporary restraining order granting the sports and entertainment company the opportunity to protect it from anticipated bootleggers that will sell unauthorized and infringing merchandise at Wrestlemania, the biggest weekend in the company’s year.

Judge Helen Berrigan issued the ruling which reasoned that since the WWE could not name the potential infringers (the lawsuit was filed against John Does) or at least provide some information, it could not grant the WWE the authority as a “judicial imprimatur” to determine “when and from whom seizure (of alleged infringing goods) is appropriate.”

The WWE requested, like other leagues and touring music acts have done in the past, for a Court order granting it the ability to stop and seize unauthorized vendors selling unlicensed merchandise which infringes on one’s licensed trademarks.  Many fans of the WWE are in New Orleans for the 30th edition of the WWE’s Super Bowl.  It’s the biggest event of the year for the company and its expected that there will be bootleggers selling counterfeit WWE goods.

While Judge Berrigan sympathized with the WWE and acknowledged the unenviable position it was in as a company which knows a wrong will happen but cannot tell the Court anything more than this, the Court could not grant it the relief it sought.

Judge Berrigan certified her ruling for interlocutory appeal which is an appeal of a ruling by a trial court that is made before the resolution of the claims.  According to the THR article, the WWE has filed a motion for reconsideration.  But, this motion will likely be heard by Judge Berrigan once again and unless there is something that was not brought up in the original WWE motion, it’s unlikely to succeed.

So, the WWE may still file the interlocutory appeal but this would have to happen now (the rules state it has 10 days but since Wrestlemania occurs this Sunday it’s now or never.)

Payout Perspective:

The overarching legal issue is that the Court would not grant the WWE the right to enforce its trademark by allowing it the right to go around and stop non-licensed vendors and confiscate their merchandise.  This was due the fact that it could not specify or identify the potential bootleggers.  To give an example of how much may be lost; investigators on behalf of the NFL seized $21.6 million in counterfeit NFL merchandise at this year’s Super Bowl.  The WWE claimed that their merchandise sales are “expected to be at least $19 million” per THR.  The WWE is not the NFL but this should give one a snapshot of how much may be at stake.  We will see what legal move the WWE does next but this ruling may be of concern for other big events where opportunists will try to make money selling counterfeit merchandise.

McMahon featured in Forbes

March 26, 2014

Forbes.com posted an article which features WWE chairman and CEO Vince McMahon.  The article boasts the achievements of McMahon while cautioning about the risks of the WWE Network.

The article, written by Lifestyle editor Michael Solomon, is an overall positive piece on the McMahon success story.  The piece highlights the company’s big investment in the network which is underscored by the fact that revenues “have barely budged (remaining at $500 million since 08) over the last few years.”  This may be due to the $75 million it has reportedly spent on setting up the WWE Network.  It also writes about the company’s failed attempt to establish its network as a “premium” channel to be distributed on the network. The Forbes.com piece spins this in the positive for the WWE and mostly everyone has bought into the“over the top” strategy of the network.

As it is currently set up, the network needs 1 million subscribers to break even.  At 2 million subscribers, it projects adding $50 million to its EBITDA.  The first numbers on the network will come out after Wrestlemania.

Due to the network, the WWE has cannibalized its PPV business which will change how the company will do business.  The shift has drawn the ire of DirecTV and Dish Network.  DirecTV had some harsh words for the WWE and Dish Network actually told its subscribers that it would not carry Wrestlemania XXX this April 6th.  However, it has since backtracked on its stance and will now carry the show.

The article will be published in the print edition of Forbes the week leading up to Wrestlemania Sunday giving it a prime PR piece leading up to its biggest event of the year.

Quick strikes…

Television by Numbers reports the second episode of Total Divas (9pm ET/6pm PT) scored a viewer average of 1.28 million viewers on Sunday night.  Thus, it did better than the last hour (936K average) of UFC Fight Night 36 although the last quarter hour featuring Rua-Hendo did 1.25 million.

Last week the WWE and Mattel, Inc. announced new kids property called WWE Slam City.  In addition to merchandise, the WWE has launched a series featuring WWE characters which appears on WWESlamCity.com, YouTube and its Network. The obvious hope is that this property will facilitate continued growth in its consumer products division.

The Wrestling Post – WWE hits all-time stock high and its CEO is worth $1B

March 5, 2014

Welcome to another edition of The Wrestling Post.  In this post we look at WWE stock, the net worth of Vince McMahon and a move in programming for the WWE Network.

WWE Stock at all-time high

Despite the rocky start to its network launch, WWE stock is trading at an all-time high.  The stock price went up as high as $27.43 on Wednesday and was at $27.10 in after-hours trading.

Payout Take:  The buzz around the WWE Network and the anticipated media rights deal has investors seeing value in the company.  There are some that have been displeased with the network due to the many glitches during the first week but the WWE has done a good job in quelling the uprising of negative reviews and for the most part the tech issues have been addressed.  This spring will be the biggest in the company’s history as its rights fee deal will likely occur sometime in April and it will reveal the first set of subscriptions numbers for the network.  Both will be key indicators for the stock in 2014.

Vince McMahon is a billionaire

Forbes.com came out with a list of “notable newcomers” of billionaires based on net worth for 2014.  WWE CEO Vince McMahon made the list with a net worth of $1.2 billion.  Forbes.com describes McMahon’s source of wealth as the WWE and states, “…transformed the World Wrestling Federation from a regional operation into an international phenomenon.  WWE went public in 1999 and today its programs are broadcast in nearly 150 countries and more than 30 languages.”  McMahon returns to the list as his net worth had dipped in 2012-2013.

Other newcomers to the billionaire club include Michael Kors, Drew Houston (Dropbox founder) and Brian Acton (WhatsApp founder who was turned down by Facebook for a job. Four years later Facebook paid him $3 billion for his company).

Payout Take:  With the WWE’s stock at all-time highs, the hopes of the potential Network revenues and an anticipated rights fee deal this spring that should double (if not more), McMahon’s wealth will only go up in the near future.

Tech issues hamper WWE Network launch

February 26, 2014

On Monday the WWE launched its much heralded Network which it advertised to be available on almost every platform imaginable. The good news is that number of those signing up exceeded expectations. The bad news is that it is experiencing technical difficulties across most platforms.

The WWE’s technological partner in the venture, MLB Advanced Media, indicated that it had not expected the demand it has received from people signing up. The WWE released a statement Monday regarding the issues upon signing up and the subsequent technical issues subscribers found once they were able to attain access.

The WWE also stated that MLBAM was aggressively working to resolve the matter on Monday morning. Although not directly, the WWE inferred that the fault lay with MLBAM for the tech issues. At least, that’s how it is being interpreted in the press. One would think that a part of this has to do with the one week free trial. Even as of Wednesday, there are still problems with logging in.

In my own experience, I was able to sign up at 6:01 a.m. on Monday via PC, one minute after the promoted launch, but was only able to watch last year’s Wrestlemania in the first hour. I was not able to go through the library until mid-morning. Later that day, the stream was fine for me on the PC but I experienced issues on my iPad. Notably, I have experienced more buffering issues on the PC on Tuesday night and today.

Certainly, these issues are being worked on but the technical issues are a concern for the WWE going forward since its heavy investment in the product. The WWE and MLB Advanced Media must make the fixes soon. If the free trial ends with the problems persisting, its likely that the WWE will lose a lot of potential customers.

Payout Take:

Tech issues were a given as to challenges facing this network. The question is how fast can the WWE and ML BAM fix them. If we are to spin this in a positive light, the overwhelming demand for the Network reflects the fact that its promotion of its product created a swell of interest. But, the tech issues could make folks concerned and they may decide not to subscribe if they feel that these issues will be an inherent part of being a subscriber.

The Wrestling Post – 02.17.14

February 17, 2014

Welcome to another edition of The Wrestling Post.  In this post we talk about the looming WWE TV rights fee deal and a new toy deal for the company.

Exclusive rights period ends between WWE-NBC Universal

Friday was the last day for the exclusive negotiating period between the WWE and NBC Universal to come up with a deal for the WWE’s television rights.  The WWE’s existing contract with NBCU ends this fall and the organization hopes to improve upon its current $139.5 million television licensing fees for its stable of WWE shows.

Although it identifies itself as a sports entertainment company, it hopes to score a television deal that mirrors some of the recent sports television rights fees contracts.  The most recent sports rights fee deal had CBS earning the right to 8 NFL Thursday night games throughout the regular season for $250 million according to the NY Times.   Notably, the NFL did not give up exclusivity as the games aired on CBS will also be available on the NFL Network.  Many believe that the rights fee deal could rival the NASCAR deal which drew a total of $820 million over 10 years from Fox and NBC.  Others believe that it may be able to double its current fees whish would still be a great improvement.  WWE stock has gone up in the past month as it is trading in the $20 dollar range – a benchmark never seen by the company since it went public.  This is due in part to the hedging that the rights deal will break the bank.

Payout Take: Losing exclusivity to deal with the WWE was a likely scenario as the WWE wants to field offers from others.  We should see by the end of February where the WWE may land.  It still could end up with NBCU but for a bigger price tag.

WWE-Mattel ink new deal

Variety reports that the WWE and Mattel have entered into 5 year agreement for Mattel to be the primary toymaker for the company.  The agreement will go through 2019 and will encompass toys and video games.

Notably, the WWE obtained the trademark for CM Punk late last year for use in toys, action figures, dolls, etc. The WWE has had the use of the CM Punk mark for wrestling since 2009 and for use of clothing since 2011.  It filed for the Daniel Bryan trademark for use with toys last week.

Payout Take:  The deal is an example of how the WWE’s choice to more PG content has aided its business outside of the wrestling ring.  Without the move to more family friendly content, it would not have landed Mattel.  If you were wondering, if the rumors are true that CM Punk is gone from the WWE and Phil Brooks decides to wrestle again somewhere, he’d have to use his own name or else be subject to a lawsuit from the WWE.

The Wrestling Post – WWE Network will make “Over The Edge” available

February 8, 2014

Welcome to another edition of The Wrestling Post.  In this post, we take a look at the WWE’s decision to release the Over The Edge PPV which included the accidental death of Owen Hart.

Many wrestling fans are anxiously anticipating the launch of the WWE Network which will occur on February 24th.  This past week, the WWE released a list of the PPVs that will be made available to subscribers.  Among the more than 400 PPV events from the past is the 1999 Over the Edge PPV which will live in infamy as the event where Owen Hart, dressed as his character at the time, The Blue Blazer, fell 70 feet to his death in the ring as a result of a harness malfunction.  The accident, which did not occur on camera, caused controversy for how the WWE handled the situation.  Rather than stop the event, it continued on despite not knowing of Hart’s condition.

The event has never been released on home video and there have never been any official showings and/or replays of the event.  There is YouTube, but the WWE has never released the PPV via On Demand or DVD/Blu Ray release.

The WWE confirmed the release of the event on the network to a CBS affiliate in Pittsburgh (via Cageside Seats):  “WWE Network will be airing the 1999 Over The Edge pay-per-view. However, portions of the event will be edited out of respect for Owen Hart.”

Payout Take:  One of the reasons that this event, which was eerily ironically entitled, “Over the Edge,” has been sheltered away from public viewing was due to the lawsuit filed by the Hart family over the fall. I find the inclusion of this event an interesting decision by the WWE for the reason that it reminds people that despite the tragic accident that occurred, the company decided to continue on with the event.  Even with the editing, it leaves the question of why put this on the network?  Certainly, from a historic standpoint, it’s a part of the company’s history.  Yet, why remind people of this terrible incident at the onset of its biggest venture?

The Wrestling Post – CM Punk…MMA Fighter?

February 1, 2014

Welcome to another edition of The Wrestling Post.  This week we take a look at one of the WWE’s stars leaving the company at a time that the stock’s price is at an all-time high.

CM Punk leaves WWE

Big news in the WWE as one of its top stars, CM Punk, has left the company.  Apparently, this is not a part of the script as Punk has been written out of the WWE for now.  In a recent interview with Ariel Helwani Punk revealed that his contract with the WWE ended in July.  Speculation grew about whether he’d re-up with the company or just walk away.  Recent storylines were not going his way and he did not want to appear at Wrestlemania XXX unless he would be in one of the main events.  This became one of the factors why Punk decided to leave.

Punk is a BJJ practitioner and left open the idea of competing in MMA.  According to The Wrestling Observer, Bellator expressed interest in the 35 year old pro wrestler.  When asked about Punk during the UFC 169 media scrum, White indicated that the two had talked…just not about fighting.  White stated he was a “nice guy” and did not outright dismiss Punk from competing in the UFC.  Of course, seen another way, one might infer that White was politely deferring comment on someone that is 35 years old, who he has no knowledge of his fighting ability and a guy he thinks is nice.

Payout Take:  Realistically, if Bellator were interested in Punk it would only be as a publicity stunt perhaps on a PPV as there’s no way that Punk gets involved in any tournament held by Bellator.  Brock Lesnar has a better possibility of fighting in the UFC that does Punk and the question about him at yesterday’s scrum was gratuitous albeit proper for the forum.  What’s more likely is that Punk, like many wrestlers that have retired/stepped away in the past, comes back after a hiatus.

WWE Stock Continues to Soar

After reporting a 52 week high just a week ago, the WWE has surpassed last week’s stock price as it reached a high of $24.19 per share.  The stock is up thanks in part to a television rights deal with BSkyB in the UK and Ireland according to Variety.

Payout Take:  It’s a great time to be a holder of WWE stock as the stock price continues to rise.  It will likely sustain if not surpass the current 52 week high as new will come down of its new rights deal in North America is announced in the coming weeks.

White talks WWE, Mayweather on Arsenio

January 29, 2014

Dana White appeared on The Arsenio Hall show on Monday night and proceeded to call out the WWE and its new network.  White also took a jab at Floyd Mayweather.

Dana on WWE

Dana on Floyd in UFC

Payout Perspective:

White always seems to hold back on the criticism of Vince McMahon despite McMahon taking shots at the UFC and MMA in general.  Even here, he doesn’t go after Vince and his business unless you consider him calling followers of WWE fans of “male soap operas.”  Certainly, the two organizations will have two competing online services when the WWE Network goes live next month.  This may inhibit subscriptions to the UFC Fight Pass.  So, we may see a little more animosity between the two although White indicated that they were “cool” in the interview.  As for the Mayweather comments, this is nothing out of the ordinary.  White had called Mayweather a racist when he had made some comments about Jeremy Lin during the “Linsanity” era.

The Wrestling Post – 01.25.14

January 25, 2014

Welcome to another edition of The Wrestling Post.  In this edition we talk about WWE stock and an actual WWE Hall of Fame.

WWE stock hits 52 week high

On a day in which the Dow Jones U.S. Media Index fell nearly 2 %, the WWE stock hit a 52 week high and was up slightly at the close of trading on Friday.  WWE stock was as high as $21.05 and fell off slightly to $20.84.  Even at a company high, it is still listed as “Buy” by several research firms. Its current market cap is at 1.57B.

Payout Take:  Remember when you could have bought WWE stock for $12?  The positive press from the WWE’s upcoming network has helped raise the company profile.  But the stock gains may be attributed to the upcoming rights fee deal that will likely happen by the end of February.

NBCU sweetens deal with WWE Hall of Fame

Speaking of the WWE rights fee deal, NBCUniversal, seeking to retain the WWE is offering the company a Hall of Fame at its Universal Studios theme park in Orlando, Florida.  According to the New York Post, the Hall of Fame is part of a “final pitch” to Vince McMahon as its exclusive negotiating period ends February 1.

Payout Take:  The WWE rights fee deal will be something to watch next month.  While a Hall of Fame is nice, it will not substitute for the monetary value the WWE seeks for its signature franchises (i.e., Raw and Smackdown).

How does Court ruling on “Net Neutrality” relate to the WWE Network and UFC Fight Pass?

January 14, 2014

A District of Columbia Circuit Court ruled that the Federal Communications Commission (FCC) could not prohibit internet providers from blocking or discriminating against traffic to lawful websites.   The ruling which impacts “Open Internet” (aka net neutrality) may mean issues for the UFC Fight Pass and WWE Network in the future.

In Verizon v. Federal Communications Commission, the Court held that the FCC is not able to impose “anti-discrimination” and “anti-blocking” rules on Internet providers.  The Court ruled that, “…even though the Commission has general authority to regulate…it may not impose a requirement that contravenes express statutory mandates.  Given that the [Federal Communications] Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.”

CNET breaks down the ruling:

In plain English, the court rejected Verizon’s argument that the FCC had overstepped its authority to regulate broadband access, instead acknowledging that the FCC has general authority to impose regulations on broadband and wireless service providers. But because the services these providers offer are classified differently from traditional telecommunication services, the justices reasoned in their decision that they are not subject to the same statutes, which guide the agency in forming its regulatory policies.

The general theory of “Net Neutrality” regulation is to keep a public right of way to access certain services.  As stated in the CNET article, for the internet, it means that the infrastructure used to deliver web pages, video and audio-streaming services is open to anyone accessing or delivering the content.  It would thus be illegal for an ISP to block a competitor’s internet traffic simply because they are competitors.  With the Court ruling, it would seem to imply that blocking competitors may be an option.

If you are a proponent of “net neutrality” what may happen as a result was recognized by the Court in its opinion:

“…broadband providers might prevent their end-user subscribers from accessing certain edge providers (those providing content (i.e. UFC and WWE)) altogether, or might degrade the quality of their end-user subscribers’ access to certain edge providers, either as a means of favoring their own competing content or services or to enable them to collect fees from certain edge providers.”

There was no immediate word whether there would be an appeal of this decision.

Payout Perspective:

So what does this mean from a combat sports perspective?  With the UFC Fight Pass and WWE Network relying heavily and essentially depending on internet streaming services in order for its services to be viable, we could see internet providers being able to regulate the bandwidth and streaming of these services.  ISP providers may affect UFC and WWE subscribers as identified in the Court opinion.  The UFC and WWE might have to “play ball” with these ISP providers in order to obtain the best access to the end-user.

With the ruling occurring today, it’s still too early to know what may happen but MMA Payout will keep you posted.

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