Was EA trying to cripple THQ’s chances of survival?
When THQ’s fortunes were in serious decline, 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 – 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
