Harmonix wins additional $383 million from Viacom

Arbitration court concludes Rock Band creator owed massive bonus on top of $150 million already paid; media company appeals.

Viacom's split with Harmonix is proving to be one of the more costly in rock-and-roll history. As reported by the Los Angeles Times, Viacom has revealed through a Securities and Exchange Commission filing that a private arbitrator has ordered the multinational media company to pay the Rock Band creator an additional $383 million, on top of an already paid $150 million in bonuses.

Harmonix shareholders will now have no problem keeping the Cristal flowing.

The multimillion dollar payout is the latest development in Viacom's turbulent relationship with its former subsidiary, which began with its acquisition in 2006. In early 2010, Viacom moved to reclaim a $131 million of the $150 million in performance bonuses that it paid to Harmonix shareholders following the release of the original Rock Band.

Harmonix countered Viacom later that year, claiming that the media company actually owed it $700 million. The basis for that claim was that Viacom had "diverted opportunities from Harmonix for its own benefit."

In particular, Harmonix said that instead of allowing it to renegotiate fees with Electronic Arts, Viacom arranged for EA to buy millions of dollars' worth of ads on Viacom's various networks in 2008. The suit contends that the EA/Viacom deal would then reduce EA's distribution fees in 2009, after Harmonix's earn-out period had expired.

In late 2010, Viacom unloaded Harmonix to a private holding company for a nominal $50, but in the process, it also received a $50 million tax benefit.

The company said in last month's regulatory filing that it has filed suit in the Delaware Court of Chancery challenging the resolution accountants judgment. Viacom claims that certain arguments and evidence were "improperly excluded" and that the payout obligation should be dismissed "on the grounds of manifest error."

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Discussion

31 comments
X_Colbert_X
X_Colbert_X

Harmonix is one of the few developers out there that actually manages to consistently reinvent the genre they work in with every new release. They deserve all the money they can get from this case.

Unveiled_3_16
Unveiled_3_16

@smoke_dog_4ever You obviously don't know anything about Harmonix as a company. Guitar Hero was at its finest when made by Harmonix, before Activision screwed it up.

X-RS
X-RS

HAHA! Take that, underdog one. *Reads* *Realizes worl will be doomed with shovelware rythm games* /watch?v=YKss2uYpih8

redskinStu
redskinStu

Good lesson about selling out to the corporation for money.

dlCHIEF58
dlCHIEF58

@InnerSenses and Viacom has had absolutely nothing to do with Guitar Hero EVER.

dlCHIEF58
dlCHIEF58

@smoke_dog_4ever Check your facts Jack, as you are more wrong than you can imagine. Harmonix developed the original Guitar Hero for Red Octane. The also developed Guitar Hero 2 and Rock the '80s. After that they split off from Activision to make Rock Band.

smoke_dog_4ever
smoke_dog_4ever

I wish everyday citizens could get these kind of tax write-offs. The write-offs do nothing but put free money into the pockets of CEOs, not the individuals further down the chain of command.

smoke_dog_4ever
smoke_dog_4ever

@InnerSenses Harmonix has had nothing to do with Guitar Hero ever. Harmonix has never worked on the Guitar Hero franchise.

Miroku_of_Nite1
Miroku_of_Nite1

Grats to Harmonix, I've always supported you from the very start. (Frequency)

InnerSenses
InnerSenses

@heroesfan261 Viacom and Harmonix have had nothing to do with Guitar Hero since 2007.

MrHatnClogs
MrHatnClogs

THAT'S WHAT YOU GET VIACOM FOR PULLING DOWN OUR YOUTUBE VIDEOS!

brigader
brigader

and the people have spoken, viacom got caught doing some dirty dirt. who the hell lets a company go for 50 bucks??? thats obviously to avoid other major costs and make more feasible the 50 million in tax write offs. DIRTY!!!

PixelAddict
PixelAddict

Viacom was sneaky. Glad they got caught.

XanderZane
XanderZane

Pay them Viacom. Not sure what Harmonix will do next. They just finished Dance Central 2. The music game genre is just about dead thanks to EA and Activision. The dance genre is still pretty hot though. We'll see how much longer that lasts.

LeviHarris
LeviHarris

I wonder how much of that money is going to the shareholders and not the hardworking developers and ground level people.

poordude1089
poordude1089

@Frequenxy it will never happen, and that is very sad. Surprising to see. When HMX became independent again, people were worried that without big brother Viacom they would have a hard time putting songs into the game at the pace they have now. Turns out it may be the other way around.

Frequenxy
Frequenxy

Please use this extra money to create a sequel to AMPLITUDE!!!!!

shakensparco
shakensparco

Just another example of how the videogame industry is just as slimy as other big business industries. Banks? Walmart? EA? Viacom? Activision? All the same. Money grabbing scum.

heroesfan261
heroesfan261

as much as I hate viacom for being sleazy. This probably means more guitar hero games.

starfox15
starfox15

Good. I hope Harmonix gets every single cent it deserves. F@#%ing pricks at viacom and EA...

soulless4now
soulless4now

I hope Viacom learned a lesson from this.

decoy1978
decoy1978

Good for Harmonix. Sucks that Viacom thought they could make easy money and then dump em when the market slows down. I hope that Harmonix comes back big and rubs it all over Viacom's greedy face.

MJ12-Conspiracy
MJ12-Conspiracy

Making the world a sleazier place.......This is the Viacom way.

FallenOneX
FallenOneX

And Viacom thought they were slick with their $50 sale......