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Viacom ordered to pay $299 million to Harmonix

Media company disputes performance-based bonuses stipulated in original purchase of Guitar Hero developer, may challenge ruling further.

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Though media conglomerate Viacom sold off Rock Band developer Harmonix in 2010, it's still paying a contested sticker price. The two companies have disputed payments owed to Harmonix's stockholders for several years, and a Delaware court last week reiterated an arbitrator's decision that Viacom must pay $299 million.

Nothing is more metal than contract disputes.
Nothing is more metal than contract disputes.

The suit stemmed from performance-based "earn-outs," which were set to be paid to Harmonix's former owners as part of its 2006 purchase, according to The Hollywood Reporter. Viacom initially purchased the developer behind Guitar Hero for $175 million in 2006, and paid out $150 million in earn-outs in 2007. Harmonix found significant success with its peripheral-based music games, but as the market began to show signs of overcrowding, Viacom reversed course. The company did not pay out in 2008 and demanded a refund for previous payments.

An independent arbitrator decided in December 2011 that Viacom owed Harmonix's shareholders a total of $383 million in unpaid earn-outs, and Viacom proceeded to challenge the decision in its home state of Delaware's Court of Chancery. While Viacom agreed in a previous settlement to pay out $84 million (the amount set for unpaid 2007 earn-outs), the $299 million calculated for 2008 earn-outs remained.

With the court's decision to dismiss Viacom's claims, the media conglomerate must either pay out the remaining money decided on through arbitration or appeal to a higher court. "We are disappointed in the court's decision, and are evaluating our options for the next steps of this process," Viacom said in a statement to The Hollywood Reporter.

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