WWE filed a motion to dismiss the City of Warren Police and Fire Retirement System class action lawsuit against the company on June 26.
The lawsuit is centered around WWE's dealings with Saudi Arabia with the Firefighters Pension System of the City of Kansas City Missouri Trust claiming to have lost $121 million due to the WWE stock price dropping. The lawsuit alleges investors were misled in regards to WWE's business with Saudi Arabia, including talks of a television deal in the MENA region.
The lawsuit also touches on the reported tension between WWE and Saudi Crown Prince Mohammad Bin Salman Al Saud where it's been alleged that Vince McMahon cut the Saudi feed of Crown Jewel 2019 over a monetary dispute and WWE wrestlers were "held hostage" following the event.
In the motion to dismiss (h/t Wrestlenomics Radio), WWE denied the allegations and where they came from.
"The only sources cited in the CAC are two confidential witnesses (neither of whom interacted with the Individual Defendants, participated in negotiations over the MENA rights deal, or worked at WWE’s corporate offices), declarations provided by Defendants prior to filing the CAC, and a series of 'news reports' that consist almost exclusively of unsupported content cherry-picked from wrestling websites founded on multiple layers of hearsay and unverified statements from Twitter. The allegations are all based on 'speculation' from 'news reports,' such as 'a wrestling-focused website' that itself is based on statements by a 'WWE Spanish commentator' (who is not employed by WWE and who based his own story on another unnamed party)"
The "WWE Spanish commentator" is Hugo Savinovich, who was one of the first to allege issues between WWE and the Saudi Crown Prince.
The statement continues, "The so-called 'media reports' also include other unidentified 'wrestling-focused websites' that cite to 'an individual' who was supposedly 'in contact with sources in the WWE' that stated 'the [Saudis] come up short' by a couple million dollars every show (i.e., the three done so far)quotes in the CAC are from the Twitter page of a self-proclaimed wrestling journalist.
"Even if these websites and Twitter cites could be deemed 'news sources,' none of these unverified, non-particularized hearsay allegations supports that any payments breached a contract or indicates a relationship so tattered that no deal could be done.
"Finally, Plaintiff’s allegation that the WWE-Saudi Arabia relationship was strained by the activities surrounding the 2019 Crown Jewel event (i.e., the supposed “cut feed” and alleged incidents related to travel back to the United States) are also conclusory and do not establish any falsity or scienter. As Plaintiff acknowledges , WWE and the charter airline company released statements explaining the mechanical issues with the plane. Ex. 21 (Forbes, 11/01/19). In contrast, Plaintiff relies on the same speculative so-called “news outlets” and Twitter accounts described above, as well as a former wrestler (CW-2). The CAC also cites an article that acknowledges WWE’s description of the mechanical issues, while also citing a radio commentator who (without any explanation or sources) offered his own contrary opinion on his radio show and Twitter"
The motion to dismiss also claims approximately $2.4 million has not yet been paid for Crown Jewel 2019.
In an amendment to the lawsuit in June, a former WWE wrestler anonymously stepped forward to give his account of what happened following Crown Jewel 2019. The wrestler (referred to as CW-2 in the lawsuit) stated that he was told by Senior Director of Talent Relations Mark Carrano that Vince McMahon and Bin Salman got into an argument over late payments regarding WWE Super ShowDown, which took place in June 2019. Carrano also told CW-2 that McMahon did cut the Crown Jewel feed, which made the Crown Prince "very mad" and described the plane being held up as a "hostage situation."
WWE gave the following response to CW-2 in the motion to dismiss.
"As to CW-2, most of the allegations he raises are innocuous or completely irrelevant to issues of falsity or scienter, such as CW-2’s observation that persons boarding an airplane 'appear[ed] to be ‘in a hurry,' a flight attendant made a colloquial statement about not taking off, CW-2’s opinion that the pilot’s voice sounded “distressed,” and CW-2’s observation regarding the presence of armed security at an airport.
The most specific item CW-2 provides—the hearsay that a WWE Senior Director of Talent Relations informed him that Defendant McMahon cut the live feed and got into an argument with the Crown Prince as to late payments—is directly contradicted by Plaintiff’s own allegations and items Plaintiff relied upon. KSA made the $60 million payment before the Crown Jewel event began, as was publicly disclosed earlier that day on the earnings call. It thus does not make sense, logically, that this payment (even accepting the conclusory allegation that it was 'late') would have prompted Defendant McMahon to temporarily 'cut' and then shortly thereafter resume a live broadcast feed."
You can view the entire motion to dismiss by clicking here.
