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The most recent episode of Wrestling Observer Radio shed some light on why Mick Foley has not been used much on WWE programming, and it stems from an ongoing rift between Foley and the new Executive VP of Talent.
Paul Levesque (Triple H) has consistently lobbied to keep Foley off Raw and other WWE TV shows, stating Foley "doesn't look tough" and cannot be taken as a legitimate competitor. Levesque has gone so far as to say "No one cares about him [Foley] at all. Funaki puts more ases in seats than Foley does. He should pay us for coming on our shows."
This disagreement between Foley and Triple H is not entirely news. Foley had several disguised comments about Triple H is his book Hardcore Diaries and also had a big problem with Triple H's crack about Lilian Garcia during an episode of Raw in April of 2010, which Foley publicly criticized.