THQ Sues EA, Zuffa, Over UFC License Deal

[Karloff]

THQ Sues EA, Zuffa, Over UFC License Deal

Was EA trying to cripple THQ's chances of survival?

When THQ's fortunes were in serious decline [http://www.escapistmagazine.com/news/view/121692-Bankruptcy-Court-Approves-THQ-Sale], but before anybody outside the company knew how bad things were, THQ started looking for alternate revenue streams. One possibility was to sell itself to EA, using its UFC licensing deal with Zuffa as a bargaining chip. EA was keen to get its hands on the UFC license, and THQ figured it was better off as an EA subsidiary than in bankruptcy. Except that never happened; EA claimed disinterest. Soon after the EA discussions Zuffa found out about THQ's perilous financial position, and threatened to pull the plug on the UFC deal. THQ's fortunes plummeted to the bottom, and bankruptcy became inevitable. How did Zuffa find out? EA told Zuffa, THQ alleges, and now THQ wants either the UFC rights or fair value for same, plus interest.

Yes, for those of you paying attention to the THQ saga, this is yet another round in the Zuffa vs THQ cage match; Zuffa's one of the companies claiming cash - $1.9 million in unpaid royalties [http://www.escapistmagazine.com/news/view/123551-Double-Fine-UFC-Among-Claimants-in-THQ-Bankruptcy-Case] - from THQ's corpse. THQ alleges that EA used its intimate knowledge of THQ's finances - "which derived from EA's confidential data room access during the search for a strategic acquirer," according to court documents - to engineer THQ's collapse, in order to snatch the UFC license out from the wreckage. The final sting in the tail came after the termination of the license and its transfer to EA. "THQ was required by the Settlement License to issue a press release congratulating EA on acquiring the UFC license from Zuffa," says the complaint.

Among the relief sought by THQ is a pointed riposte to that press release: THQ wants EA declared as the trustee of the UFC Franchise for the benefit of THQ, effectively giving THQ the benefit of EA's UFC deal.

Source: US District Court Complaint, THQ vs Zuffa LLC and Electronic Arts [http://cdn3.sbnation.com/assets/3362185/thq-v-zuffa-ea-complaint.pdf]


Permalink

 

[Mr.Mattress]

I would bet that's exactly what EA wanted to do: Get rid of the Competition and get the best franchise from said Competition, because that seems like something they'd do.

The only problem is proving that in court, which will probably be very hard.

And either way, THQ ain't coming back.

 

[LordMonty]

EA the bad guy... all of this can only lead to more comedy and stupidity. Don't go meekly into the night THQ - go screaming bloody murder.

 

[tdylan]

THQ's big mistake was to go crawling to EA in the first place. They were sure to get kicked in the face.

There are things worse than death. Being an EA subsidiary is one of them.

As a husband and father that's come home from work at the end of the day to find the utilities turned off due to non-payment on more than one occasion, and have their child say "I'm scared" as a result of something they took for granted no longer being readily available, I'd rather be drawing a paycheck from EA than not drawing one in bankruptcy.

 

[BrownGaijin]

How did Zuffa find out? EA told Zuffa...

Given EA's M.O. I can't help but feel the level of plausibility to this accusation.

My English teacher is going to kill me.

 

[JayRPG]

Alright, so, let's look at this from the outside in.

THQ is going down, they know they have something EA wants so to save themselves they offer themselves to EA with that thing they want oh so badly (the UFC license).

EA actually say, "nah, we don't want it, not interested" after presumably taking a look at all of THQ's inside info as part of this deal they were proposing.

Then Zuffa just finds out, out of the blue, that THQ are in peril, just after the negotiations with EA.

THQ goes down and the very second they do, EA is on that UFC licensing deal quicker than a reformed celibate priest's first time.

Yeah.. EA looks totally innocent in this situation...

 

[AzrealMaximillion]

EA's name was mentioned today. Let's see what people say.

THQ's big mistake was to go crawling to EA in the first place. They were sure to get kicked in the face.

There are things worse than death. Being an EA subsidiary is one of them.

Alright, so, let's look at this from the outside in.

THQ is going down, they know they have something EA wants so to save themselves they offer themselves to EA with that thing they want oh so badly (the UFC license).

EA actually say, "nah, we don't want it, not interested" after presumably taking a look at all of THQ's inside info as part of this deal they were proposing.

Then Zuffa just finds out, out of the blue, that THQ are in peril, just after the negotiations with EA.

THQ goes down and the very second they do, EA is on that UFC licensing deal quicker than a reformed celibate priest's first time.

Yeah.. EA looks totally innocent in this situation...

Did everyone totally forget that what killed THQ was the two failed Warhammer MMOs? I mean, I'm all good for some EA hate when they actually deserve it. That being said EA didn't kill THQ by not making them a subsidiary. What company in their right mind would want to make a subsidiary of that company comes with a massively large debt.

As the customer, why would you get mad at EA for that?

Because its EA and hating EA is the cool thing to do? Come on people. This lawsuit is THQ trying to get some money to pay off their debtors.

They were making UFC games right up until they closed, none of them sold very well. I'm honestly surprised that Zuffa didn't know that THQ was having massive financial trouble. Why is it bad that EA told them that before renewing their contract with them. Would you rather have seen a whole bunch more money and possibly jobs get lost just because you don't want EA to succeed?

Damn, gamers are some fickle people sometimes.

 

[JayRPG]

EA's name was mentioned today. Let's see what people say.

THQ's big mistake was to go crawling to EA in the first place. They were sure to get kicked in the face.

There are things worse than death. Being an EA subsidiary is one of them.

Alright, so, let's look at this from the outside in.

THQ is going down, they know they have something EA wants so to save themselves they offer themselves to EA with that thing they want oh so badly (the UFC license).

EA actually say, "nah, we don't want it, not interested" after presumably taking a look at all of THQ's inside info as part of this deal they were proposing.

Then Zuffa just finds out, out of the blue, that THQ are in peril, just after the negotiations with EA.

THQ goes down and the very second they do, EA is on that UFC licensing deal quicker than a reformed celibate priest's first time.

Yeah.. EA looks totally innocent in this situation...

Did everyone totally forget that what killed THQ was the two failed Warhammer MMOs? I mean, I'm all good for some EA hate when they actually deserve it. That being said EA didn't kill THQ by not making them a subsidiary. What company in their right mind would want to make a subsidiary of that company comes with a massively large debt.

As the customer, why would you get mad at EA for that?

Because its EA and hating EA is the cool thing to do? Come on people. This lawsuit is THQ trying to get some money to pay off their debtors.

They were making UFC games right up until they closed, none of them sold very well. I'm honestly surprised that Zuffa didn't know that THQ was having massive financial trouble. Why is it bad that EA told them that before renewing their contract with them. Would you rather have seen a whole bunch more money and possibly jobs get lost just because you don't want EA to succeed?

Damn, gamers are some fickle people sometimes.

Woah woah, I never said or inferred that EA was the one that killed THQ, THQ killed THQ but...

It is most definitely shady business practices to tell Zuffa about THQ's financial troubles, especially since the party telling Zuffa was more likely to gain something after telling them.

I would find it hard to believe that THQ simply said "Hey EA, we got UFC, wanna buy us?" and EA said "Nuh", there was likely talks, negotiations, deals put fourth and internal data shared before EA said "We aren't interested" - You then can't use the knowledge you gained from these negotiations to do what they have allegedly done.

If they did it at all that is, but it does seem 100% plausible - and not just because it's EA, I think most big companies would see this as an opportunity to get something they wanted easier and for cheaper than the 'above board' alternative.