THQ, WWE, Jakks Settle Suit, THQ&WWE Sign New Deal

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I have to think that this is part of the reason why we saw so signed deal earlier than now.

THQ Inc., World Wrestling Entertainment, Inc and JAKKS Pacific, Inc. today announced that they have reached settlement agreements with respect to the WWE video game and toy licenses and the THQ/JAKKS Pacific LLC joint venture.

Under the three-party settlement, all claims are withdrawn and all litigation ended among the parties without any party admitting any wrongdoing.

As part of the resolution of these matters, THQ will pay WWE $13.2 million. In addition to its preferred return payment to JAKKS for the period ending December 31, 2009, THQ will pay JAKKS Pacific $20 million over the next four years, with payments of $6 million due June 2010 and June 2011, and payments of $4 million due June 2012 and June 2013, and the THQ/JAKKS Pacific LLC joint venture will terminate effective December 31, 2009.

After that THQ and WWE announced that they have entered into a new eight-year agreement granting THQ the exclusive worldwide rights to develop and publish video games based on WWE’s content effective January 1, 2010.

WWE grants THQ the exclusive worldwide rights to publish interactive games based on WWE properties across all major gaming platforms and distribution channels.

"This year’s highly rated WWE SmackDown vs. Raw 2010 video game demonstrates the innovation and creativity that THQ brings to WWE," said Vince McMahon, WWE Chairman and Chief Executive Officer. "This new licensing agreement will ensure that we continue our tremendous success in the video game industry in the years to come."

It seems to me like they just wanted to cut Jakks out of the loop but obviously had to pony up cash to get it done. Four years of payments doesn’t sound so bad for an 8-year deal. Especially when it’s $24M while through September 30, 2009, THQ has reported net sales of WWE video games in excess of $1.4 billion.

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