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This story is part of a new Prospect series called Rollups, looking at obscure markets that have been rolled up by under-the-radar monopolies. If you know of a rollup like this, contact us at rollups(at)prospect.org.
The professional wrestling business today is synonymous with World Wrestling Entertainment (WWE). But that’s not the only fighter in town. Earlier this month, one of WWE’s competitors, Major League Wrestling (MLW), filed an antitrust complaint alleging that WWE torpedoed cable and streaming deals for MLW and attempted to poach fighters under exclusive contracts.
“WWE has been wrongfully depriving its competitors of critical opportunities for many years, but its latest conduct has been even more unconscionable,” said Court Bauer, the CEO of MLW, in a statement. “I think we speak for the rest of the professional wrestling world when we say that this anti-competitive behavior has to stop.”
The lawsuit is the stiffest challenge to the dominant company in wrestling, which achieved its position by poaching from and outlasting every competitor over a 30-year period.
In the 1970s, the “Territorial” era of professional wrestling, there were 32 wrestling promoters across North America who aired fights as far as local TV broadcasting permitted. Fighters often moved between territories seeking the best deals possible. André the Giant—the celebrated “eighth wonder of the world”—was working in the Canadian and Midwest territory circuits when Vince McMahon Sr. found and acquired him for the Northeast Territory (now WWE), which included New York and the rest of the Eastern Seaboard.
Today, the landscape has consolidated to the point that WWE controls 85 percent of the professional wrestling market. WWE began life as Titan Sports and gradually rose to the top of the industry, hiring the likes of André the Giant, Hulk Hogan, “Rowdy” Roddy Piper, Jesse Ventura, and numerous other performers away from rival wrestling outfits. It finally achieved dominance when it bought out its biggest competitor, World Championship Wrestling, in 2001.
The company is controlled by Vince McMahon and his family. Vince’s wife Linda McMahon, who lost two separate bids for the U.S. Senate in Connecticut, was Donald Trump’s head of the Small Business Administration from 2017 to 2019.
With such control over the market, one would think WWE’s ratings must be at an all-time high, but that’s not the case. Viewership for one of WWE’s flagship shows, Monday Night Raw, has dropped dramatically over the years. In 2005, the program had an average of almost four million viewers per episode. Last year, the average Monday Night Raw brought in 1.75 million viewers.
Bauer founded MLW in 2002, but the promoter entered hiatus in 2004. A year later, he joined WWE’s creative team and developed some of the most iconic characters of the “Ruthless Aggression” era, which included working on the notorious “Battle of the Billionaires” for WrestleMania 23: Vince McMahon vs. Donald Trump.
Although the professional wrestling landscape is different today, its largest rival in the 2000s, Impact!, hovered between one and two million viewers per episode, compared to Monday Night Raw’s four to five million viewers. Impact! nearly closed shop in 2016.
Among wrestling enthusiasts, the question of why Impact!’s viewership declined is contested. Some say it couldn’t convert its weekly viewership into pay-per-view buyers or ticket sales for live events. Others point to Impact!’s move to Monday nights, directly competing against WWE’s Monday Night Raw, or even lackluster story lines that used older wrestlers instead of fresh talent.
Either way, even as its cable viewership for the key demographic of 18- to 49-year-olds has precipitously dropped, WWE has erected higher barriers of entry in an industry that was already rare and difficult to find traction within.
Today, the landscape has consolidated to the point that WWE controls 85 percent of the professional wrestling market.
In May 2021, Vice TV agreed to air MLW archival footage, and shortly thereafter the two were in negotiations to broadcast new MLW programs for the cable network. But when details of the agreement reached WWE, one of their top executives, Susan Levison, called a Vice executive and told them that CEO Vince McMahon was “pissed” and wanted the deal to end. Vice told Levison that McMahon’s actions were “illegal” and probably an antitrust violation. Levison said she couldn’t control McMahon.
WWE had the ability to shut MLW’s deal down because Vice runs a documentary series, Dark Side of the Ring, in partnership with WWE. Additionally, A&E Networks owns a 20 percent stake in Vice and has full control over much of its production operations. A&E and WWE have a long-standing relationship where A&E broadcasts WWE programming. Moving forward, Vice aired only one MLW special and ceased future business negotiations with the up-and-coming wrestling promoter.
In July 2021, MLW moved on and struck a deal with Tubi, a streaming service owned by the Fox Corporation. The two arranged live events for September, and MLW ended negotiations with other potential partners. In anticipation of the live events, MLW signed contracts for new wrestlers, expanded its staff, increased pay, and secured venues.
But WWE’s disruption continued. In August, days before Tubi and MLW were set to publicly announce the partnership, WWE Chief Brand Officer Stephanie McMahon (Vince McMahon’s daughter) pressured Tubi to end its agreement with MLW, or else WWE would pull its content from Tubi’s parent company Fox. The day before the announcement, Tubi ended its deal with MLW.
In the lawsuit, MLW reported that its valuation steeply declined and ticket sales dropped 40 percent within weeks of the Tubi agreement being canceled. Because MLW ended negotiations with other potential partners, the company was further behind than when they first started.
In the era of ruthless monopolies, it’s hard to legally prove anti-competitive behavior before a judge. But a pending antitrust lawsuit from 2014, when a group of mixed martial arts (MMA) fighters filed a class action lawsuit against Ultimate Fighting Championship (UFC), provides insight as to how the MLW and WWE fiasco might play out.
It’s likely WWE will argue that there’s no way it could have a monopoly over the market because MLW could strike a deal with one of the 1,700 cable channels or roughly 200 streaming platforms available in the United States. The MLW complaint doesn’t detail venues, but if it did, WWE could say there are potential stadiums in just about every American city that the wrestling promoter could host events from. And the list goes on.
While the MMA fighters are waiting to see if the court rules in their favor, the crux of their arguments provides a potential framework for MLW’s case against WWE. Rather than focus on access to streaming services or cable channels, the UFC case instead centers around the MMA fighters themselves, arguing that UFC has monopsony power over the professional mixed martial arts labor market, meaning that fighters have nowhere else to employ their talents but with UFC and had to settle for artificially suppressed wages.
Adding monopsony power to MLW’s case could potentially circumvent whatever WWE plans to throw at MLW. In a statement, WWE said, “These [anticompetitive] claims have no merit and [WWE] intends to vigorously defend itself against them.” But in the UFC case, plaintiffs demonstrated that the monopsony power of Zuffa (UFC’s previous parent company) resulted in anti-competitive effects, which were only exacerbated by Zuffa’s monopoly power across the mixed martial arts fighting industry.
In the UFC antitrust case, according to a summary judgment, one of the plaintiff’s experts said, “An MMA promoter that is a pure monopolist in the market for promoting MMA events is, by definition, a monopsonist in the market for Fighters seeking to be paid to appear in MMA events: If there is only a single dominant MMA promoter, then there is only one place for an MMA fighter to work.”
The ongoing UFC case is relevant because MLW’s complaint also details how WWE sought to poach MLW fighters, and as part of its business model, MLW relies on hiring and maintaining relationships with fighters for its broadcasting content.
But WWE sabotaged MLW by airing footage of MLW fighters without permission, and by forcing MLW fighters to reveal trade secrets. WWE even attempted to sway MLW fighters to breach their contracts; one MLW wrestler demanded they be released from their contract, and thereafter went to work for WWE. The wrestling giant, through its monopsony power, blacklisted wrestlers who were not on the professional circuit yet, by refusing them future contracts if they worked with MLW.
Without fighters, MLW cannot exist, and since WWE controls 85 percent of the professional wrestling market, WWE’s strong-arm moves with “no legitimate business justification” directly imperil MLW’s ability to compete in the professional wrestling market. In other words, WWE’s entire business model for the past 40 years—stealing from its competitors—could be on the table in this legal action.
