So it looks like my former employer, THQ, is still lingering around trying to scrape together whatever dollars they can in the wake of their bankruptcy. The latest news is that THQ is suing EA and Zuffa over the way that the UFC license acquisition went down last year.
According to court documents filed in the U.S. District Court in Delaware , Bankrupt video game maker THQ is suing Zuffa and Electronic Arts, Inc. (EA) stating that EA had informed Zuffa of THQ’s shaky finances as EA and Zuffa worked together to so that EA could acquire the license to UFC video games. The Complaint was filed last Friday.
The issue goes back to 2006 when EA expressed interest in acquiring the UFC video game franchise from Zuffa. However, court documents stated that, “EA made what Zuffa considered to be an insultingly low offer for the UFC video game rights and was rejected.”
In 2009, THQ developed “UFC 2009 Undisputed” and it was a success selling over 3.5 million units. Despite the success two years prior, THQ’s finances declined in 2011 and the company determined that it would be unable to support its projects including the next games in the UFC franchise.
In 2011, THQ and EA discussed a potential sale of THQ as a whole to EA. According to court documents, “THQ provided EA internal financial information including detailed sales and revenue figures for the UFC Franchise, and projected marketing expenditures on the next UFC Franchise game.” Despite initial interests, EA broke off negotiations with THQ in December 2013 2011 citing disinterest.
Two weeks later, Zuffa criticized THQ about its expenditures and threatened to terminate its relationship with THQ based on its insolvency. There had been no prior evidence of dissatisfaction with THQ.
THQ entered into a $10 million settlement with Zuffa in exchange for the termination of its license and all intellectual property rights to the UFC game brand in 2012. However, THQ now claims that this was a fraudulent transfer as it believes that EA had contacted Zuffa and conveyed the internal financial information it was provided by THQ during the potential sale of THQ. THQ claims that it was “hamstrung” in negotiations with Zuffa due to its knowledge of THQ’s finances and the actual value of the UFC video game franchise was $20 million.
As a former member of the UFC Undisputed Production Team all this does is make me angry. At the time of the acquisition I was all kinds of butthurt, and I still harbor a slight resentment for the way things went down, but I don’t think I can side with THQ on this one. While it was a d**k move by EA to disclose private financial information with Zuffa behind THQ’s back, upper management at THQ was wasting money on all sorts of stupid ideas. The way money was thrown around at mediocre projects was a real bummer to watch, especially when working on a title that generated profit with each release but couldn’t receive the budget to hire on contract employees who had worked on UFC Undisputed for over a year.
Legally, THQ might have a case here, but I hope that they fail miserably at their attempt to sue the folks at EA and Zuffa. I don’t want to see the EA UFC guys or the Zuffa guys involved with making the next UFC game getting distracted over pointless BS like this.