Thursday, September 04, 2014

CM Punk vs. WWE re: Royalties (Contract Chatter)

In the September 8, 2014 issue of the Wrestling Observer Newsletter, editor Dave Meltzer writes:

Attorneys for C.M. Punk sent a 22 page letter to WWE over royalties (I believe WWE stopped sending Punk royalty money over their claim of a breach of contract) and use of his likeness, particularly him being featured in the video game (the roster of the game was put together before he quit the promotion even though it was just announced two weeks ago).
If people are curious about the language in standard WWE contracts, they can take a gander at where I've posted copies of ones that have been made public over the years through SEC filings or public lawsuits.

I believe Stephanie McMahon's October 7, 2013 contract is probably the most recent example that I've found.

Now, CM Punk or Rey Mysterio's contract may have different language in it because as top stars they're more likely to have negotiated special clauses when they were re-signing.
However, I'd wager that the basic outline for their contract is similar to Steph's performer contract. However, I would note that some of the language about wrestlers not receiving royalties on "internet subscription fees; subscription video on demand fees" (7.5) may not be Punk's contract because I suspect that might be relatively new language.

Regarding "Breach of Contract", section 12 talks about "BREACH" which includes 12.1.c that "PROMOTER shall have the right, in its sole discretion, to immediately suspend or terminate this Agreement, both as to services and compensation, if any of the following occurs:... WRESTLER is habitually late and/or absent for scheduled Events or appearances as PROMOTER determines in its sole discretion"

Royalties are covered in section 7 though it's specifically calls out in 7.1.c that "breach" can affect the payments. Additionally, in section 9.6 may be applicable to CM Punk cases:
9.6 WRESTLER shall use best efforts in the ring in the performance of wrestling services for a match or other activity, in order to provide an honest exhibition of WRESTLER’s wrestling skills and abilities, consistent with the customs of the professional wrestling industry; and WRESTLER agrees all matches shall be finished in accordance with the PROMOTER's direction. Breach of this Section 9.6 shall cause a forfeiture of any payments due WRESTLER pursuant to Section 7 and shall entitle PROMOTER to terminate this Agreement, or suspend WRESTLER without pay, but such breach shall not terminate PROMOTER's licenses and other rights under this Agreement. If PROMOTER in its discretion suspends this Agreement, when reinstated, PROMOTER may extend the Term of this Agreement for a period of time equal to the period of suspension or any portion thereof and this Agreement will therefore continue to be of full force and effect throughout the remainder of the Term.
It's hard to say whether not showing up (being absent) is the same as violating "best efforts" and doing the right finish. If they insist that Punk did violate that by walking out, perhaps they're going with the idea that's why they wouldn't have to pay Section 7 (Royalties).

(And if anyone was curious, section 10.2.b is the 'Rey Mysterio' clause: "(b) In the event that WRESTLER is unable to wrestle for six (6) consecutive weeks during the Term of this Agreement, for any or no reason, including, without limitation, due to an injury suffered while performing services at PROMOTER’s direction, PROMOTER shall have the right to thereafter: (i) terminate this Agreement; (ii) suspend WRESTLER either with or without pay; and/or (iii) extend the Term of this Agreement for a period of time equal to the entire period of inability to wrestle, or any portion thereof." I believe that WWE is using this part of the contract to 'extend' Rey's time under obligation to WWE by the amount of injury time he's accumulated.)

Lastly, I am not a lawyer. People far more experienced than I will be able to give meaningful analysis.

- Chris Harrington

1 comment:

Anonymous said...

Really enjoyed the podcast Saturday. Keep up the good work!