THQ Emerges From The Shadows To Sue EA & UFC
THQ claims that the amount paid by Zuffa, LLC to terminate the publisher’s UFC license was well under the market value. The dollar amount offered — $10 million instead of $20 million-plus that THQ claims the license was worth — was put on the table because EA informed Zuffa of THQ’s dire financial straits, using information that was not publicly available.
The insider information was obtained when, in November 2011, EA and THQ discussed the former buying the latter outright. After six weeks of talks, the deal fell through, but only after EA got a very intimate look at THQ’s financial situation. According to the lawsuit, EA shared this information with Zuffa, and the two companies conspired to terminate THQ’s UFC license on the cheap, to be followed by a lucrative EA-UFC partnership.
“Zuffa and EA each had an incentive to terminate THQ’s UFC license. Because the terms of the agreement dated to 2006, before the explosion of interest in UFC, Zuffa’s terms with THQ were much less favorable to Zuffa than Zuffa would have been able to achieve in the open market in 2012. For example, THQ had no guaranteed minimum payment to Zuffa, and had only a minimum $2 million marketing commitment, which was below the level that a game in the UFC franchise would actually require. EA, for its part, wanted to acquire only the choicest portions of THQ rather than commit to the company as a whole as a strategic acquirer.
The rest of the lawsuit can be read here, and it outlines a business love triangle that has tens of millions of dollars at stake.
Game Informer reached out to EA for comment, and was met with a boilerplate ”We believe these claims are without merit,” response.