Disclaimer #1: This article should NOT be taken as legal advice. The author is not licensed to practice law in the state of Connecticut nor in the United States of America. Furthermore, the author is not privy to any “insider” knowledge. There may be an innumerable number of unknown factors which would alter or negate any comments or opinions put forth in this article. The purpose of this article is a general introduction to issues in contract law as they may relate to professional wrestling, and resulting problems in the reporting regarding these issues.
Credit where credit is due: Chris Harrington (@mookieghana on Twitter) has done real yeoman’s work in gathering a database of the known pro wrestling contracts which have come fallen into the public domain. It can be found here and all contracts referred to in this article can be found there.
So why am I writing about the minutia of professional wrestling contracts?
The answer is mostly that I am a nerd on multiple fronts. But the answer is also because terms contained in those contracts continually make news for a variety of reasons. Often, when they do, they are being reported on erroneously, either through ignorance of what contract terms actually say, or just as often, ignorance of what an enforceable contract term may be.
My intention is to do these sorts of overviews on an as needed/as is relevant basis.
In that light, the impetus of this initial article is the recent reports regarding the contractual status of Daniel Bryan. As is well documented elsewhere, Bryan has not wrestled since April 2015, eventually being forced to retire due to the accumulation of concussions throughout his career.
Before we get to the main course of this issue, a little appetizer: It was reported that, just prior to announcing his retirement, Bryan requested his release. WWE denied this request, with several reports at the time suggesting that, due to his contract being “frozen”, he could not give notice. This is error #1 in the reporting around Bryan’s status.
Typical WWE contracts can be terminated at anytime on 90 days notice by WWE, but the contracted wrestler has no similar ability. Bryan was not disallowed from giving notice because he was injured and his contract was ‘frozen’; instead, he was not able to give notice because he had a signed and enforceable contract. Assuming all contracts are similar in their termination clauses, there is not a single wrestler under WWE contract who can just ‘give notice’ and end their time with WWE. This is precisely why you hear of wrestlers such as Cody Rhodes “asking for their release” rather than “giving notice.” And before you say, “But Del Rio just did!”, keep in mind that he had an option written into his contract where he could opt out (apparently also on 90 days notice) written into his contract; all indication is that this is the exception and not the rule.
Now that the appetizer is out of the way, let us move on to the main course today – the “freezing” of contracts.
Recently, as Bryan has returned to television as a commentator for the Cruiserweight Classic and as a general manager on the retooled SmackDown Live!, it has been reported that his contract has been ‘unfrozen’ and that “time is ticking” on it now. The interest in this goes back to the reports that, when Bryan attempted to give notice, it was with the intent to return to the ring with whoever would have him.
But was does it mean that his contract was ‘frozen’? In the February 15, 2016 Wrestling Observer Newsletter (subscription required and, limited problems with reporting notwithstanding, strongly suggested), Dave Meltzer reported the following:
“The WWE in its contracts has the right that if a wrestler is injured for a considerable length of time, that they can freeze the time frame of his or her contract. The time left on the contract doesn’t start rolling until they are ready to work in the ring and fulfill it as an active wrestler. The WWE was able to use that clause to keep Rey Mysterio from season one of Lucha Underground even though his contract time frame had expired, although they did eventually release Mysterio. Danielson’s time left on his contract was frozen until he could return. But, the ice age would never end, since he could never be cleared to return and fulfill that time left. He would get paid his downside guarantee until the company made the decision to fire him. The company wasn’t going to fire him as long as there was any residual value left from his 2014 big run and where he could help a potential competitor.”
This needs to be unpacked a little bit. We have three issues raised here which need to be examined in a little bit more detail.
The “Freezing” Clause
The first issue is the notion that there is a clause in WWE contracts which when a wrestler is injured allows them to “freeze the time frame on his or her contract”. In order to understand what is accurate and inaccurate about this comment, we have to first view the contract clause in question.
Luckily, through various lawsuits and filings required by WWE as a public company, a number of contracts have been released into the public domain. For the current purposes, I have reviewed Stephanie McMahon’s 2013 contract, Triple H’s 2012 contract (restated from a 2006 contract) and Chavo Guerrero’s 2010 contract. These are the three most recent WWE contracts readily and legally available for review, and therefore are the ones which were reviewed for this discussion. While there are some variations in wording and structure in each contract, these are for the most part minor and the general terms are the same. I will mostly refer to McMahon’s 2013 contract simply because it is the most recent, and was likely signed around the same time as Bryan’s most recent contract.
Time for another “CYA” disclaimer, and also a logical statement about the limitation of analysis of this type. Clearly, there is a possibility that Bryan has a significantly differently structured contract; without reviewing his actual contract there is no way of knowing. However, common and the fact that those contracts which are available all feature similar terms would suggest that Bryan’s contract is also similar.
The “freezing clause” can be found at paragraph 10.2 (b) of McMahon’s 2013 contract:
“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. Upon certification by WRESTLER or PROMOTER’s physician during any period of suspension that WRESTLER is fully recovered and capable of performing all services as required under this Agreement, PROMOTER shall have the right to reinstate this Agreement, and it will thereafter continue to be of full force and effect throughout the remainder of the Term.”
Just to break this down into more plain English, if a wrestler is out of action – for ANY reason – for at least six weeks in a row, the Promoter (WWE) has three options of which it can do none, any or all:
- terminate the agreement entirely (subject to termination clauses elsewhere in the contract),
- suspend the wrestler either with or without pay, or
- extend the term of the agreement “for a period of time equal to the entire period of inability to wrestle”.
The purpose of this clause is likely twofold – first, it guarantees WWE the opportunity to be fully assured of access to a wrestler for a given amount of time, even if that time is divided by an injury, and; secondly, it stops wrestlers from essentially saying “Screw you guys, I’M going home” and just waiting out the end of a contract term before heading to a competitor. Go back and read above what I mentioned about contracted wrestlers not being able to just “give notice”, and this makes sense.
Now, a plain reading of that would lead one to believe that WWE now has the option to “freeze” a contract term for the entire period that a wrestler is injured. For example, if a wrestler is injured and unable to wrestle for two years, WWE would be able to extend the term of the contract for up to two years. Or, if a wrestler is injured and unable to wrestle for six years, then WWE could extend the agreement for six years.
But these comments are on a ‘plain reading’. While that is reportedly how WWE is interpreting this clause, plain readings are not where an issue stops when it comes to legal and contractual issues. This clause most clearly contemplates a wrestler being injured for a period of time during a contract term and the overall term being extended for a period up to the amount of the term missed. It does not explicitly contemplate an instance where – as is the case with Bryan – a wrestler who retires and/or is indefinitely disabled from competing.
If the reporting at the time is to be believed, WWE intends to hold Bryan contractually in perpetuity without him having any option to terminate the agreement. According to the exact wording of the contract, where they have the option to suspend him without pay, they could do so without paying him. Think about that for a second.
While that issue is on your mind is a good time to point out something a lot of people do not realize about contracts – just because there is a term in a contract, and just because both sides sign the contract, that does not mean that a clause is actually enforceable. It might mean that one side may try to enforce it, but it does not mean that it is actually enforceable. It is highly unlikely that WWE would be able to successfully argue that it can hold a wrestler like Bryan indefinitely to a contract which originally had a definite term. We will discuss this a bit more later on.
The most likely definition which would be accepted by a court would be that WWE would have the ability to extend a contract up to the amount of time missed on the original term – now this is the important part – regardless of when a wrestler would be able to return to the ring. For example, if a wrestler was injured half way through a three year contract, the maximum amount of time that WWE might be able to extend the term would be eighteen months, regardless of whether the wrestler was able to return the ring during that period. This is if the unilateral extension would be upheld at all.
The Rey Mysterio Situation
That this is a live issue which WWE is aware of leads us into the second issue raised by Meltzer’s February 2016 report. A similar situation with Rey Mysterio played out throughout 2014. When Mysterio’s contract expired in April 2014, WWE exercised its option to extend the term due to Mysterio missing a considerable amount of time due to various injuries, supposedly for one full year. Eventually, Mysterio was released in February 2015.
What does this situation tell us about WWE’s confidence in the enforceability? Amid reports that Mysterio ceased cashing WWE cheques after the unilateral extension, it is clear that Mysterio was receiving legal advice throughout the situation. It is also clear that WWE eventually agreed to release Mysterio in advance of the one year extension it originally claimed it was entitled to. As Dave Meltzer reported in the March 9, 2015 Wrestling Observer:
“A lot had happened behind the scenes, but it was either November or December when the two sides reached a deal that they would release him at the end of February, provided both sides kept it confidential. WWE had threatened they would not release him if the story got out.
The agreement was believed to have been a 2/27 announced release. It is believed that both sides have agreed to not disparage the other publicly. WWE actually moved him and his profile to the inactive section of the web site on 2/26, and quietly responded to questions saying he was no longer with the company.”
Almost certainly, the negotiated February release was a settlement of the issues between Mysterio and WWE, and the suggestion is it included a typical non-disclosure agreement regarding the details. Mysterio would have received at least his salary up to the end of February, while WWE was successfully able to delay Mysterio’s debut with Lucha Underground an entire season.
However, that WWE was willing to settle this issue prior to the commencement of any litigation may be indicative of three issues: first, they were not entirely confident of their chances of success if litigation did arise; second, they did not want an adverse decision regarding this clause; and, third, they got most of what they wanted out of the situation. In this case, that would be delaying Mysterio from competing on TV for a new competitor in the marketplace trying to gain a foothold.
While Mysterio is the only other competitor WWE has attempted to unilaterally extend under this clause, that does not mean that he is the only competitor to have their contract expire in the near past that WWE may have had the option to try and extend. Both CM Punk and Ryback left with more than six weeks remaining on their contracts. Keep in mind that, while Ryback reportedly went home by mutual agreement, the clause in the available contracts states that the contract may be extended if the wrestler is unable to wrestle for any reason. Particularly with Punk, WWE may well have had the option to extend his contract indefinitely, either with or without pay. That they did not, and instead released him prior to the scheduled expiration of his contract may well be a result of not wishing to pay his high salary, but also a possible result of not wanting to face litigation related to an attempt to extend the term indefinitely.
Of course, this is entirely conjecture and based on no knowledge of the actual considerations which went into this decision.
The Indefinite Extension
Typically, contracts between parties have start dates and end dates. If the end dates are not defined, then both parties would have the ability to terminate the contract upon providing appropriate notice.
And this is exactly what it has been reported that WWE has the option to do when it comes to Bryan. Needless to say at this point if you have read this far, but the chances of WWE being successful in court making such a claim are minimal. This is perhaps the biggest error in the reporting of the situation – assuming WWE could just say you are now our employee for life.
Admittedly, this is not a situation which would arise very often. Most wrestlers want to work for WWE, and are unlikely to make similar money elsewhere. Let alone a situation such as Bryan’s where a wrestler has retired but WWE wants to keep paying them in perpetuity. Not only would this situation not come up often, this is the unique one where it is the wrestler trying to extricate himself from an employer who refuses to stop paying him longer than they contractually had to. Essentially, Bryan is the perfect storm.
None of this is to say that Bryan, by retiring, can get out of his contract early. Reportedly expiring in 2018, WWE has every right to hold him to that term, retirement or no. They may, as stated above, even have the right to extend the contract for a period of time (possibly equal to the term missed by Bryan post-injury). They do not, however, have the right to hold Bryan to essentially a lifelong contract merely because he has retired.
Another important consideration if this clause were to be challenged in this specific matter is that Bryan has been cleared by multiple doctors to return to the ring. The last portion of the ‘”freezing” clause states the following:
“Upon certification by WRESTLER or PROMOTER’s physician during any period of suspension that WRESTLER is fully recovered and capable of performing all services as required under this Agreement, PROMOTER shall have the right to reinstate this Agreement, and it will thereafter continue to be of full force and effect throughout the remainder of the Term.”
Once WWE was in receipt of physician clearance provided by Bryan’s doctors, they had the option to “unfreeze” the contract. They have chosen, for whatever reason, to not do so. Were Bryan to challenge a unilateral extension, this would be a factor a court would likely consider.
Conclusion (Daniel Bryan & WWE)
Bryan wants to wrestle. This seems to be a universally accepted fact, with no insiders reporting otherwise.
WWE does not want Bryan to wrestle. This fact is self evident.
Following his retirement, Bryan disappeared from TV and even cancelled several house show appearances marketed as his farewell tour.
But now Bryan is back and reports are that his contract has been “unfrozen”. Given that there was no way that he was going to be able to get out of the contract prior to 2018, this is perhaps not surprising. However, there were multiple reports of Bryan making continual efforts to get out of his contract during his post-retirement announcement absence.
It will be very interesting to see if any of those attempts led to an agreement that, when his original contract term concludes in 2018, he will be free to go without any unilateral extension.