WWE extends deadline for THQ license agreement renewal

THQ has been granted an extension by World Wrestling Entertainment for the deadline to renew the joint licensing agreement held with JAKKS Pacific. The new deadline is Dec. 31, 2009. If the agreement is renewed and extended it would be good until Dec. 31, 2014. Obviously THQ needs to continue to hold this license to make any more of its SmackDown vs. RAW video games.

THQ said in a brief statement today that the “WWE’s action provides the company with increased flexibility with respect to the renewal of the videogame license.”

No doubt the biggest hurdle for THQ is its tumultuous relationship with JAKKS Pacific, who it has taken legal action against in regards to its share of revenues from products based on the license. We watch and we wait.

THQ prevails in WWE licensing dispute

THQ announced this afternoon that it has prevailed in an arbitration hearings against JAKKS Pacific, the company’s partner in a joint venture meant to deal with the WWE license related to video games. The binding arbitration, which was in the terms of the operating agreement should both parties not agree, came to the conclusion that JAKKS Pacific should have been given a lower preferred return payment for WWE video games sold under a license granted by World Wrestling Entertainment to the joint venture, THQ/JAKKS Pacific LLC.

As a result, a new rate, which is 40 percent below the previous rate, reaches all the way back to July 1, 2006 and applies through December 31, 2009. Because of this, THQ will receive approximately $23 million during the fiscal 2010 second quarter ending September 30, 2009.

Under the terms of the HQ/JAKKS Pacific LLC. operating agreement, JAKKS Pacific was to be paid a preferred return from sales of the LLC’s WWE-licensed video games. The preferred return rate was to be reset for the period beginning July 1, 2006 through December 31, 2009 but both companies could not agree on a new preferred return rate. Because of this THQ filed a suit to compel arbitration pursuant to the terms of the operating agreement.

Naturally THQ is happy about this and will continue to reap the rewards from the SmackDown vs. RAW series as well as Legends of WrestleMania.

JAKKS, THQ brawl over WWE licensing issues

I hate when people fight, but that’s just what is happening this morning between THQ and JAKKS Pacific over the World Wrestling entertainment license. JAKKS announced this morning that it had given notice to the WWE that it would extend the license to the popular sports entertainment franchise. Meanwhile in a court across town, THQ went to court to dispute the license renewal. The legal wrangling, in the form of a short press release can be found below:

JAKKS Pacific, announced that it has notified World Wrestling Entertainment, Inc. (“WWE”) that the joint venture between THQ and JAKKS intended to exercise its option to renew the WWE videogame license, which would otherwise expire on December 31, 2009, for an additional five (5) year term ending December 31, 2014. Separately, THQ commenced a lawsuit in California Superior Court, Los Angeles County, claiming it was not ready to make a decision with respect to renewal of the WWE videogame license, and seeking a declaratory judgment that (i) JAKKS was not authorized under the parties’ joint venture agreement to unilaterally issue a renewal notice to WWE, (ii) THQ has no obligation to consent to a renewal of the WWE license, and (iii) the restrictive covenant in the joint venture agreement prohibiting THQ from publishing any videogames based on wrestling during the term of the joint venture agreement (expiring one year after termination of the WWE license) is unenforceable under California law. JAKKS and THQ have also initiated arbitration proceedings relating to these issues.