SBD/October 9, 2013/Marketing and Sponsorship

THQ Lawsuit Claims EA Shared Critical Financial Information With Zuffa

EA first expressed interest in acquiring the UFC video game franchise from Zuffa in '06
Bankrupt video game maker THQ is suing UFC parent company Zuffa and EA, "stating that EA had informed Zuffa of THQ’s shaky finances as EA and Zuffa worked together ... so that EA could acquire the license to UFC video games," according to court documents cited by Jason Cruz of MMAPAYOUT.com. The complaint was filed last Friday in U.S. District Court in Delaware. The issue goes back to '06 when EA "expressed interest in acquiring the UFC video game franchise from Zuffa." THQ in '09 developed "UFC 2009 Undisputed," which was "a success selling over 3.5 million units." But THQ’s finances "declined in 2011 and the company determined that it would be unable to support its projects including the next games in the UFC franchise." Court documents state, "THQ provided EA internal financial information including detailed sales and revenue figures for the UFC Franchise, and projected marketing expenditures on the next UFC Franchise game." THQ in '12 entered into a $10M settlement with Zuffa "in exchange for the termination of its license and all intellectual property rights to the UFC game brand." However, THQ now "claims that this was a fraudulent transfer as it believes that EA had contacted Zuffa and conveyed the internal financial information it was provided by THQ." THQ claims that it was "'hamstrung' in negotiations with Zuffa due to its knowledge of THQ’s finances and the actual value of the UFC video game franchise" was $20M (MMAPAYOUT.com, 10/7).

GLOBAL TAKEDOWN
: UFC co-Chair & CEO Lorenzo Fertitta said the promotion is the "largest pay-per-view provider in the world" at over "six million pay-per-view buys this year in North America alone and then we have other distribution deals around the world." Appearing on CNBC's "Worldwide Exchange," Fertitta noted UFC is "distributed in 148 countries and territories, broadcast in 28 languages in nearly a billion homes around the world." Fertitta: "Right now, the focus is that we've got the majority of our content being aired in primetime in North America and South America, which puts it at an odd time in places like Europe and Asia. ... So for 2014, what we're going to do is expand live events into major capitals around Europe in primetime, providing great content for the networks throughout Europe to help build the business here and do the same thing in Asia." When asked if the expansion could possibly diminish the market in the U.S., Fertitta said it would not because "we think we have a tremendous amount of growth here and there are a lot of athletes that are still training in these areas that need the opportunity and need the exposure" ("Worldwide Exchange," CNBC, 10/8).
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