WWE has entered a legal battle that could be worth over $5 million.
Sports Business Reporter Darren Rovell has reported that WWE has terminated its contract with trading card Panini alleging a breach of contract. Panini is still currently selling the company’s products – which WWE claims is a violation of their contract – so the sports entertainment giant is seeking an injunction to stop that. The belief is that the contract still had two years left to run.
Fanatics who have merchandise deals in place with WWE were due to take over from Panini in 2026 but are now expected to take over the trading card agreement immediately.
JUST IN: Two weeks ago, the WWE terminated Panini for breach of contract with 2+ years left.
The WWE says Panini, which is still selling product, is now in violation and will seek an injunction.
Fanatics, which had deal starting in ‘26, is expected to get rights immediately.
— Darren Rovell (@darrenrovell) September 20, 2023
How has Panini responded to WWE’s move?
Panini has now launched legal action against WWE in light of the contract termination with Brandon Thurston breaking down the key points that Panini has set out, including that WWE has allegedly demanded a payment from Panini for over $5 million:
WWE and Panini agreed to a deal on March 14, 2022, to produce trading cards and stickers using WWE IP.
– Panini claims it has performed and fulfilled obligations under the contract.
– “[W]ith no warning whatsoever” on August 28, 2023, Panini received a letter from WWE (dated August 25), purportedly terminating the deal.
– Panini claims this is a breach of contract and wants the termination declared invalid.
– The deal began with a term sheet on October 1, 2021, then they made a four-year agreement on March 14, 2022, making the deal retroactively effective January 1, 2022, and to end in 2025.
– Panini launched the “WWE Prizm” trading card set in April 2022 and stickers the next month. There were digital and physical trading cards. Panini used WWE cards for “Box Wars” or “Pack Wars” games played at conventions.
– Panini says WWE never raised any issues with Panini’s performance, accepted royalty payments, and “praised Panini for tripling the business.”
– WWE allegedly suddenly terminated the deal, purportedly under a provision of the contract giving WWE the right to terminate if Panini “did not engage in good faith efforts” to make WWE physical trading card games and digital trading cards.
– WWE allegedly demanded Panini immediately pay WWE $5,625,000, the minimum royalties due under the contract.
– Panini claims the window to terminate under the provision was between April 1 and June 1, 2022, which has passed.
– Panini wants declarations: that it hasn’t breached the contract, that WWE’s termination is invalid, that the contract remains in effect, and that it doesn’t have to pay the $5,625,000 WWE claims is immediately due.
WWE has had better news with the company announcing a new five-year deal with NBC Universal that will see SmackDown leave FOX and return to the USA Network.