The Hamilton Ave Journal 12.27.08: Volume 1 – Issue 66

In the latest brief, the WWE provided very few new arguments and instead responded to what Scot Levy’s team was reacting to in the response. For the most part, the WWE made the claim that their contracts explicitly stated that each was an “independent contractor” and that “Plaintiffs cannot escape the clear language of the Booking Contracts…”

Except that the plaintiffs can. Already covered by the Journal in Issue #63:

One of the first arguments the WWE makes is that wrestlers knowingly and willingly sign a contract that states that they are “independent contractors” and not “employees”. That is where the lawyers made their first big play:

[T]he employment status of an individual… is not determined solely by the label used in the contract between parties.” Sharkey v. Ultramar Energy Ltd., 70 F.3D 226 (2d Cir. 1995).

In Issue #47, the Journal went into far greater detail into how one is determined to be an “employee”, despite whatever a contract says:

So how does one determine if they are an employee? While Mr. Bischoff tried to use the 17-step test from 1992, the IRS actually uses a 3-prong test nowadays. Should the employer/worker relationship fall into just one of these categories that worker can easily be called an “employee”. Those categories are, according to the IRS:

3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

After going through how the WWE has in many ways met these criteria, the argument of how a contract is written does not stand up. One of the commentators (JD) on the news blurb stated it quite well:

Why doesn’t WWE seem to realize that Levy is challenging the LEGALITY OF THE CONTRACTS?! If I draw up a contract that says I get to kill you if you don’t do a job, and you don’t do the job, I don’t actually get to kill you.

Ash also made some relevant points while responding to others less familiar with contract law:

The problem is the legality of the contract signed. The contract refers to them as independent contractors, but that doesn’t make them independent contractors under the law. Certain guidelines must be met in order for someone to actually qualify as an independent contractor as opposed to an employee, and vice versa. It’d be like if you signed a contract that referred to you as a monkey…would that make you a monkey? No. Would you be entitled to the same things other people, who aren’t considered monkeys, are entitled to UNDER FEDERAL LAW? Yes. Therefore, this is a contractual issue related to potentially misleading or inaccurate terms used within the contract to describe the wrestlers, which then prevent WWE from following certain federal guidelines. It isn’t SOLELY about money or benefits – it’s about principle and definition under law.

The WWE has been treating their wrestlers far more like employees than independent contractors for years. Sorry, Vince, but it’s what you got when you destroyed the territorial system.

The bottom line is that just because a contract states something it does not make it true. For instance, a contract promising sex is not legal in most of the country because that would amount to prostitution and slavery, both of which are against the law. Basic contract law states that any part of a contract that asks for illegal activity or misclassifies something is not valid. So while the three wrestlers and all who they made the lawsuit for may not see anything from the breach of contract perspective nor get an additional dime out of it, they can still get the ruling that they were misclassified and that they are owed those benefits guaranteed an “employee”.

The biggest thing going against them is the WWE’s other main point to dismiss that the statute of limitations to make this motion has passed. Connecticut state law is quite clear that it must be less than five years to file such a motion and it has been more than five years since the three wrestlers signed contracts. That said, the former WWE-talent have made several counterarguments to this already:

Most of the rest of the brief consisted of the WWE’s team taking swipes at the other law firm staying they did not understand the charges they were bringing, that the case was frivolous, and that the team is trying to tack on more charges that were not part of the original motion.

At the end of the year, this highly watched case will most likely not make another move for at least a month or two when a judge will decide how to proceed. Even after that, it will still be months of discovery and scheduling court time before anything will move forward. The WWE may offer a settlement out of court, but the IRS may get involved anyway in an effort to collect back taxes. Given the current economic environment, the IRS may be looking to gain revenue through any means necessary and will be glad to know that they have been denied certain withholdings.

The Journal will continue to follow this case all through 2009. The far-reaching effects for years to come in the wrestling industry will be impossible to ignore, no matter what the results may be.

WWE adds executive and new show

This past week, WWE Corporate made several announcements that will shape a lot of wrestling landscape in 2009. First up, Robert Zimmerman was hired as the new Vice President of Public Relations and Corporate Communications. According to the current public relations writing outlet:

In his new role, Zimmerman will be a strategic member of WWE’s management team, and oversee business, consumer, financial, and trade press relations and strategy.

The WWE has been sending out a large number of press releases in the past few months to try to protect their corporate image and bolster stock price, but thus far none have had a positive effect. Mr. Zimmerman will have an uphill battle in the high-stress environment of the WWE to try to give the company a positive image in the eyes of consumers, journalists, and investors. Still, Mr. Zimmerman is hardly a new kid on the block has been media relations type roles for 17 years.

No start date for Mr. Zimmerman has been announced, but that did not stop the WWE from sending out a press release of their own. Apparently, the WWE and WGN (a contender for SmackDown before the deal was linked with MyNetworkTV) will be launching a new version of “WWE Superstarts” that will start airing in April 2009. All that is known right now is the show will be a 1-hour format in prime-time. Most believe that this will be a magazine style show with the possibility of some original matches or classic content, but there is nothing to substantiate these thoughts.

WGN America (WGN’s national cable outlet) is mostly available outside of its home in Chicago through DirecTV and Dish Network, but is available on a number of cable outlets as well. They do not have the same reach as MyNetworkTV or the CW, but still reach a considerable percentage of American home (roughly 80-85%).

Newsbites

Some items of note in the rest of the wrestling business world:

MARKETPLACE

In the Marketplace we look at the trends in television ratings. This section is less for critical analysis by the Journal but more for the reader to see what is really going on and to draw their own conclusions.

* SmackDown! ratings may include fast overnight if final ratings are not posted. Also, SmackDown! ratings are for the prior week as overnights are not available before this article goes to print.

ECW
Close (This Week’s Rating): UNAV
Open (Last Week’s Rating): 1.3
Percentage Change: N/A
52-Week High: 1.5
52-Week Low: 1.0
All Time High: 2.3
All Time Low: 0.6

TNA iMPACT**
Close (This Week’s Rating): 1.0
Open (Last Week’s Rating): 1.2
Percentage Change: ▼ 16.7%
52-Week High: 1.2
52-Week Low: 0.9
All Time High: 1.2
All Time Low: 0.6

** TNA iMPACT’s are for the prior week as ratings may not be available at the time of the Journal’s posting

Analysis:

Coming in to end of the year, RAW managed to do much better than the same period 52 weeks ago when they were showing a recap show. That said, at press time ratings for ECW were not available (a clip show itself this year), so it remains to be seen how well that will do. iMPACT also dropped this week to a 1.0 after two weeks in a row of 1.2. Given the last episode of the year was on Christmas, it should be interesting next week to see how that came in. iMPACT had held up extremely well on Thanksgiving for the past few years, but Christmas is a beast of a whole different color. Also, TNA is following up with a mostly clip-show on New Years Day, so the company may have a few weeks of lower ratings to deal with before returning with new content.

Within the next few weeks, the Journal will once again revisit the ratings predictors and see how the end of the year came out.

MONEY AND INVESTING

We all know that wrestling is a business, but we don’t often pay attention to what sells and makes money. Money and Investing looks into the top selling items in the world of wrestling and any interesting figures that may have come out this week.

PERSONAL JOURNAL

Wrestling isn’t just about watching and reading. The best way to be a wrestling fan is to experience it live. Where is wrestling coming to in the next 2 weeks? The Personal Journal answers that question.

EDITORIALS

The Editorials section is designed for you, the readers, to respond to the views presented in the Journal, send an important news item, or talk about another overlooked business related item in wrestling. Just beware: the Journal reserves the right to respond back.