Jury awards Hogan additional $25.1 million in punitive damages

March 22, 2016

On Monday, Florida jury tacked on an additional $25.1 million punitive damages award for Hulk Hogan.  This amounts to a total of $140.1 million awarded to the former pro wrestler after the jury found in his favor and awarded him $115 million this past Friday.

Gawker Media was ordered to pay $15 million while Nick Denton was assessed $10 million and Gawker’s former editor in chief, Albert J. (“AJ”) Daulerio $100,000.  Punitive damages are awarded in addition to the actual damages at trial.  They are meant to reform or deter the defendant and others from engaging in similar conduct.  Not every state awards punitive damages.

According this report, the trial court judge told the jury that they could not award punitive damages that would bankrupt the defendants.

The net worth was determined by the court (via www.capitalnewyork.com):

The court determined that Gawker Media, a U.S. subsidiary of Cayman Islands-based Gawker Media Group Inc., had $48.7 million in gross revenues last year and a net worth of just $83 million. It determined Denton’s net worth to be $121 million — $117 million of which is tied up in stock in Gawker Media Group, Inc., which is valued at $276 million. The court determined that Daulerio’s net worth was negative $27,000, since he has no material assets but $27,000 in student loans.

Gawker, et al. indicated that it would appeal the jury findings and the damages awarded in hopes of either overturning the decision and/or reducing the monetary award.

Payout Perspective:

The moral of the story for AJ Daulerio is not to mess around at a deposition as it was his flippant answer to a question that seemed to have annoyed the jurors.  Even though the court advised that it was not to bankrupt the parties in awarding punitive damages, it seems like the award would do so for Daulerio.  One has to conclude that based on the monetary award, that Gawker will most certainly appeal.

Jury awards Hogan $115M in Gawker lawsuit

March 18, 2016

On Friday, a Florida jury awarded Hulk Hogan $115 million in damages against news entity Gawker after it posted a sex tape of Hogan without his knowledge.

It is too early to know whether Gawker will appeal but according to CNN Reporter Tom Kludt Florida law requires a party to post a bond for the full amount of damages although that is capped at $50 million.  The jury awarded $55 million in economic injuries and $60 million for emotional distress.  This does not include an unspecified amount of punitive damages.

The NY Times provides a concise synopsis of the trial.

A statement from Nick Denton, founder of Gawker, inferred that there will be an appeal.

Payout Perspective:

For those wondering whether Gawker could even afford to put up a supersedeas bond, Michael McCann indicates that Florida law allows judges discretion in determining how much a party must post especially if imposing such a bond would be a substantial injustice.  But, even before an appeal, one might expect Gawker’s attorneys file a Motion for Remittur which would request the court to reduce the amount of damages awarded by a jury.  In addition, or in the alternative, Gawker might seek a Motion for New Trial and/or Judgment Notwithstanding the Verdict.  Each of these alternatives would see Gawker requesting relief from the jury award due to some legal circumstance that was not followed and/or was done in clear erro.  Since the presiding judge would hear such a motion, the likelihood of success would be low since the trial court judge would be the one that would be overruling themselves.

We should see in the coming days the plan for Gawker.  Frankly, Hogan is not getting the money awarded by the 6-person jury any time soon.

WWE stock downgraded a day after Q4 earnings announcement

February 12, 2016

The WWE posted strong fourth quarter earnings as revenue increased 21% to $658.8 million, the highest in Company’s history.  However, that was not enough for investors as the stock was downgraded a day after the earnings announcement.

The WWE reported a net loss of $1.2M adjusted for non-recurring costs which equated to a profit of 4 cents per share.  While the WWE beat analyst expectations, it took a hit as the stock was downgraded to a ‘Hold’ from a ‘Buy’ by The Street Ratings.

The WWE Network reported 1.22 million paid subscribers at the end of Q4.  It was a 49% increase from 2014 Q14.  The WWE announced that it was the fifth largest direct-to-consumer OTT subscription service in the U.S. next to Netflix, Amazon Video, Hulu and MLB.TV.  The WWE Network continues to expand internationally as it extended its reach to Germany, Austria, Switzerland and Japan with plans to expand into the Pacific Rim .  It announced 277,000 international subscribers.  This means that there was roughly 940,000 domestic subscribers and 277,000 overseas.  According to Chris Harrington of The Wrestling Observer, there were 389,000 additions although there was a churn of 405,000 subscribers.  But this quarter showed the most international subscribers since the network was offered internationally.

In January, the WWE was added to the S&P SmallCap 600 Index.

The 4th Quarter for 2015 brought the annual revenue is up 21% from the previous year.  Per Harrington, the operating income and net income were the highest since 2013 but below the profitabil8ty of the 2007-2010 traditional PPV era.

The stock was down slightly after yesterday’s trading and was down once again on Friday to $14.65.

The Wrestling Post – Ross replaces Ranallo as New Japan announcer

January 21, 2016

AXS TV announced that former WWE announcer Jim Ross will join AXS TV’s “New Japan Pro Wrestling” as its play-by-play commentator.  Ross will join former UFC Heavyweight Champion Josh Barnett to call the action starting Friday, March 4th.

Via the AXS TV press release:

A WWE Hall of Famer, Ross was known as the voice of WWE for nearly two decades, bringing his incomparable broadcasting talent to hundreds of TV and pay-per-view broadcasts for the organization. No stranger to New Japan Pro Wrestling, Oklahoma native Ross also called the first-ever, live English-language broadcast of NJPW with Wrestle Kingdom 9 in 2015.

“I’m excited to join the AXS TV team in presenting the amazing athletes of the New Japan Pro Wrestling brand,” said Ross. “I’m a major fan of NJPW and look forward to joining Josh Barnett to form the best broadcast team in the genre. Business just picked up!”

Ross replaces Mauro Ranallo who departed the broadcast team to join the WWE and its Smackdown broadcast team as it moved to the USA Network from SyFy.

Payout Take:  You may recall that Ross was dismissed by the WWE after an incident during a sponsored panel talk at Summerslam in 2013.  Ross was the fall guy for an obvious inebriated Ric Flair during a panel discussion for WWE 2k14.  The WWE announced that Ross was retiring but its clear that that was not the real reason.  Since then, Ross has started his own podcast, called an MMA event with Chael Sonnen as well as Wrestle Kingdom 9 in 2015.  Ross should be a very good addition to the popular show which airs on Friday nights.

2015: The year in pro wrestling

January 9, 2016

We leave the last review of 2015 to that of professional wrestling.

Let’s do some quick hits before we get to the high spots.

  • New Japan debuted on AXS TV to rave reviews. Mauro Ranallo and Josh Barnett served as the English commentators for the shows.
  • Ranallo recently made the move from New Japan and commentating boxing events to being the voice for WWE’s Smackdown. He debuted as the new voice as it the Smackdown brand moved from USA to SyFy this year.
  • Lucha Underground on the El Rey Network was the most-talked about independent hit. The mix of telenovela and independent wrestling action served as something different for wrestling fans.  The second season of the show was in peril as it lacked the necessary funding and a television deal.  However, news surfaced late in the year that it would return to the El Rey Network for a second season starting in January.
  • ESPN and the WWE entered into a partnership in which the sports cable network will feature a weekly segment with WWE wrestlers. 2015 saw ESPN expand a little more into the world of entertainment which included covering Summerslam (which was in Brooklyn, NY this year) and the announcement of Brock Lesnar’s re-signing with the WWE.
  • Lesnar’s signing in early 2015 was big news as it seemed as though he was going to head back to the UFC. He was in attendance at UFC 184 in Los Angeles. He re-signed with Vince McMahon in LA as the WWE was at the Staples Center at the time.  Also in LA at about the same time was Dana White who was promoting the Aldo-McGregor fight.
  • The much maligned TNA Wrestling organization was dropped by SpikeTV and then picked up by Destination America.  Soon thereafter, Ring of Honor was added to Destination America as a syndicated show for the network.  However, it has since moved once again to POP TV.
  • Ronda Rousey appeared with The Rock at WrestleMania in Santa Clara, California. The annual event drew in $139 million in economic impact for the Santa Clara/San Francisco region.
  • The WWE and TapouT announced a joint venture in which performers would wear the former MMA brand which revamped itself into an athletic performance brand.
  • The WWE was one of the many sports leagues to announces a deal with a fantasy sports operator as it announced a deal with DraftKings.

Hulk Hogan banished from WWE as a results of racist comments

Hulk Hogan was terminated by the WWE this past July after audio of a racist rant surfaced.  The audio relates to racist remarks he made 9 years ago.  It appears that the discovery was made as a result of an ongoing Gawker lawsuit in which the former pro wrestler sued the media outlet for publishing a sex tape.  Hogan’s Gawker lawsuit continues into this year as a trial date last summer was continued.

CM Punk sued by WWE physician

UFC contracted fighter CM Punk was sued by a WWE physician for libel.  The lawsuit stems from comments Punk made on Colt Cabana’s podcast about the type of medical treatment he received from the doctor while with the company.  The podcast was one of the most listened to podcasts from Cabana, who was also named in the lawsuit.  A motion to dismiss the case by Punk and Cabana’s lawyers was denied and the lawsuit continues.

More head injury lawsuits filed

The estate of former WWE performer Nelson Lee Frazier sued the WWE for wrongful death as a result of multiple head injuries/concussions while a wrestler with the WWE.  Matt Osborne’s estate filed a similar lawsuit.  In addition, Billy Jack Haynes,, Vito LoGrasso and Evan Singleton also filed lawsuits related head injuries they claimed they suffered while working in the WWE.  The WWE is aggressively defending these lawsuits claiming that they were filed by “ambulance chasing” lawyers.  The WWE file motion to transfer the lawsuits to the company’s home state of Connecticut.

In a unique strategy, the WWE filed a lawsuit against several former WWE stars seeking a declaratory judgment against them. The lawsuit would seek a ruling that any allegations of head trauma are “time-barred” by the statute of limitations.

Via our July post:

The WWE strategy is a result of the growing swell of lawsuits filed by former WWE performers claiming that the company knew or should have known about the risks of head trauma and that they suffered injury as a result.  Although not a named defendant in the lawsuit, the WWE names (and blames) plaintiff attorney Konstantine Kyros for the litigation.  It identifies several notice letters (below) which request that the WWE not destroy any information it may have.  The lawsuit identifies the existing lawsuits Kyros has filed on behalf of former WWE stars including Billy Jack Haynes.

The lawsuit requests a court ruling indicating that the defendants’ claims are time-barred by the statutes of limitations/repose under Connecticut law.  Essentially, the defendants did not file their claims on time.  This is always a very hard issue to consider as most of the claims that wrestlers could make occur when they are still contracted by the company.

The WWE Network

What was once thought as a foolish idea, now reveals that the WWE Network was ahead of the curve with it’s over the top platform.  With UFC Fight Pass making efforts to produce more content for its network reflects the fact that digital platforms are not going anywhere.  Of course, we don’t think the UFC is going away from its PPV business but its digital service is becoming more of an economic driver for the company.

The WWE Network has kept its strategy of offering a free month for new subscribers in growing its current paid subscribers.  Further, the expansion of the network to other countries has helped its subscriber base grow.  In January 2015, it surpassed 1 million subscribers.

Q1: 918,000

Q2: 1,156,000

Q3: 1,173,000

The fourth quarter has yet to be reported, but through September 2015, the WWE has brought in almost 2.3 million unique subscribers and half of those were active as of September 2015.

ESPN and WWE enter into partnership

October 19, 2015

Last week ESPN announced it entered into a partnership with the WWE to feature weekly segments of wrestling highlights.

The move is thought to help both companies.  ESPN’s subscriber numbers and ratings have been down and ad revenue were off based on the last report this past June as reported in the Wall Street Journal.  The WWE has had its own issues with viewership of Monday Night Raw hitting record lows.   The WWE roster is in flux as they are seeking another top level star aside from Brock Lesnar.

ESPN has dipped its toe into partnering with the WWE in the past with reporting Brock Lesnar’s re-signing with the WWE and coverage of Ronda Rousey’s appearance with The Rock at this past Wrestlemania.

Payout Perspective:

This might receive some criticism from sports purists but the partnership should help both entities.  As we noted, the additional mainstream visibility should help WWE with marketing its product.  While many people will not admit it, the trickle of pro wrestling into ESPN might bring back some fans that watched it when they were younger.  For ESPN, it’s another way to diversify its programming to attract more viewers.  It is a move into more entertainment but we’ve seen the network segue into this in the past (recall Rush Limbaugh on the network’s NFL pre-game show) with differing results.

ESPN covers Summerslam Sunday

August 23, 2015

While there is a Sunday night UFC Fight Night from Saskatoon, Canada airing on FS1 DSunday night, the event might be overshadowed by WWE’s Summerslam which will air at the same time as the live MMA event on the WWE Network and through PPV.

The WWE has received support in promoting this event from ESPN which is airing live at the Barclay’s Center in Brooklyn, New York where the company is holding three sold out events which started last night with the WWE’s developmental arm NXT holding an event.  In addition to Sunday’s Summerslam, the company will air Monday Night Raw from the same venue.  Former WWE commentator and current ESPN anchor Jonathan Coachman was a central part of the coverage.

According to Forbes.com, there was some controversy as to whether ESPN should cover the WWE event.  However, the company decided to make the decision to cover it for a variety of reasons.  Forbes.com touched on the fact that ESPN is losing subscribers and covering the WWE is a way for ESPN to attract more viewers.  Earlier this year, ESPN aired Brock Lesnar’s decision as to whether he would sign with the UFC or stick with the WWE.  It also produced a documentary featuring WWE superstars.

Strategically the WWE has offered a free month of WWE Network for non-subscribers which should boost viewership.  The offer is an almost quarterly strategy to entice curious fans to sign up.  As of the last earnings call, it appears that paid subscriptions are doing well and offering the free month is one of the reasons the sub numbers have progressively increased.

Payout Perspective:

This summer, ESPN has done live remotes at unique sporting events across the nation to give little known events some notoriety.  This, of course, is a little different.  In the past, ESPN has covered Wrestlemania in the past but never in a serious capacity.  ESPN’s involvement in covering Summerslam is great for the WWE.  In year’s past, the company’s biggest card of the summer was held in Los Angeles but interest had waned.  This year appears to have had a resurgence and part of that has to be due to ESPN’s involvement.  Brock Lesnar was on the network earlier in the week and you may recall he indicated that Vince McMahon was a better promoter than Dana White.

Based on the attendance from Saturday and the anticipated attendance for the next two events, it appears that the WWE has found a new home for Summerslam.

Hulk Hogan terminated by WWE after audio of racist rant surfaces

July 24, 2015

World Wrestling Entertainment has terminated the contract of Hall of Fame wrestler Hulk Hogan.  The decision was made based on audio that surfaced from 8 years ago.

Hogan has been wiped from the WWE web site and eliminated from his current position on the USA reality television series “Tough Enough.”

The audio tapes relate to racist comments made by Hogan 8 years ago.  The information appears to be a part of sealed information from the pending Gawker lawsuit in which Hogan sued the web site for releasing a sex tape.  It would appear that the release of the audio tapes were done as retribution for the lawsuit.

Hogan has released a statement apologizing for the racist comments.   The bad news for Hogan is that there are inferences that there is more audio coming out.

Payout Perspective:

Even though many people here are MMA fans, it’s clear that everyone knows Hulk Hogan.  This makes the decision by the WWE to immediately distance itself from one of its biggest stars ever more surprising, yet appropriate.  As a publicly traded company, the WWE did not want to come under fire for Hogan’s comments and suffer any financial repercussions.  While its WWE Network is gaining traction with consumers, it’s still needs to find a way for the investment to break even.  Negative publicity like this is not good for business.  As for Hogan, his reputation is marred and he joins Bill Cosby as a pop culture figure of the 1980s who we now see in a different light.

Did Gawker have anything to do with the release of these tapes?  Not sure.  But, it will make the trial between Hogan and Gawker that much more contentious.

Judge denies motion to dismiss in Punk libel lawsuit

July 22, 2015

The Washington Post reports that the lawsuit between WWE doctor Chris Amman and CM Punk and Colt Cabana will continue after a Cook County (IL) Circuit Court judge denied defendants’ motion to dismiss the case.

As a result of the court’s denial to dismiss the case, CM Punk and Colt Cabana must answer Amann’s complaint claiming that the two libeled the WWE doctor during an episode of Cabana’s podcast.

On the Art of Wrestling podcast, Punk called into question Dr. Amann’s treatment of his concussion and an injury on his back with was diagnosed as a MRSA staph infection.  Cabana is being implicated for being the host of the podcast.  He is also a good friend of the now UFC fighter.

The WWE aided Dr. Amann despite not being a party to the lawsuit as it sent out a statement regarding the lawsuit and providing video purported evidence that Punk did not have a lump on his back.

Payout Perspective:

Procedurally, a motion to dismiss the lawsuit prior to answering the claims in a complaint is necessary and occurs when the one being sued believes that there is no merit to the claims.  Here, Punk and Cabana took their shot at dismissing the lawsuit.  But, there was a sufficient amount of information pled by Dr. Amman according to the court.  Its likely Punk and Cabana will deny the allegations in the Complaint when they file an Answer and we may see prolonged litigation.

Estate of former WWE wrestler files head injury lawsuit

June 28, 2015

The estate of another former WWE wrestler has filed a lawsuit against the organization.  The mother and son of Matt Osborne (aka “Matt Borne” and “Doink the Clown”) have filed a wrongful death lawsuit against the company for the alleged negligent and fraudulent mistreatment of Osborne while he was a wrestler with the company.

The Osborne lawsuit was filed on June 26th in the U.S. District Court for the North District of Texas, Dallas Division.  The Dallas Morning News covered the lawsuit.  Osborne died in 2013 of a painkiller overdose at the age of 57 in Plano, Texas.  The family claims brain injuries caused while a professional wrestler caused depression and drug abuse which led to his death.

The WWE, utilizing the same public relations strategy as in similar lawsuits, claims that the lawyers are the ones driving these lawsuits pegging the attorneys as opportunists.  The WWE indicates that the Osborne lawsuit is merely seeking “NFL money” in reference to the NFL concussion lawsuits which likely will result in settlements for those involved.

In a similar lawsuit, Billy Jack Haynes’ case against the WWE that was filed in Oregon has been transferred to Connecticut upon motion by the WWE on the basis that he signed WWE booking contracts which indicated that the forum of choice was the home state of the WWE.

Payout Perspective:

Osborne spent limited time in the WWE throughout his wrestling career which may make his claim hard to prove.  However, it does not negate the alleged negligence that the WWE may have contributed to his injuries.  The complaint points out specific instances where Osborne was injured during his stint in the WWE.  It also claims the WWE knew and/or knew but did not warn him about the perils of head injuries.  Notably, the complaint has a similar template as other lawsuits filed by former WWE wrestlers.  However, at least one part of the lengthy complaint has been updated to include a photograph embedded in paragraph 139 of the complaint which shows the WWE is taking precautionary steps with its talent now with helmets used in training.

This lawsuit may be moved to Connecticut like Haynes’ lawsuit as one might infer that Osborne signed a WWE contract with a forum selection clause which would dictate where a lawsuit would take place if one should happen.  We will see if more wrestlers continue to file lawsuits which appear to be similar to the NFL and NHL concussion litigation.

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