Viacom ordered to pay $299 million to Harmonix

Delaware Supreme Court upholds previous decisions, forcing Viacom to pay $299 million to Harmonix shareholders.

A Delaware Supreme Court judge has ruled against Viacom, forcing the media conglomerate to pay $299 million in outstanding bonuses to Harmonix shareholders.

The court's decision, as reported by the Hollywood Reporter, upholds past judgments from an arbitrator in December 2011 and a Delaware circuit judge in August 2012.

Barring a reconsideration of the case or its going before the U.S. Supreme Court, Viacom will be forced to pay the $299 million.

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. 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.

A Harmonix representative declined to comment.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

59 comments
jon2435
jon2435

Classic case of not knowing the business, then wanting someone else to pay for the mistake.

ominous_prime
ominous_prime

Viacom, owner of these assets: Paramount Motion Pictures Group, MTV Motion Pictures Group, Nickelodeon, BET Networks, Showtime, The Movie Channel, Spike, Comedy Central, Gametrailers.com, Bellator MMA, and Teenage Mutant Ninja Turtles. They're backing away from paying what they owe? Horrible!

blackothh
blackothh

I dont care for harmonix games but im glad they eventually got their money

bmart970
bmart970

I like Harmonix. This is good to hear because I've been somewhat worried that they were going to go broke because of this Fantasia game.

FallenOneX
FallenOneX

Bet they wished they hadn't sold Harmonix for $50 just to save $50 million in taxes.......

GreggD
GreggD

YES! Love Harmonix, those guys deserve this.

mischiefmeerkat
mischiefmeerkat

300 mil is probably pocket change to both of those companies..

Glad to see Viacom get their comeuppance though. =>

jinzo9988
jinzo9988

Any strike against Viacom is a good strike.

edpeterson
edpeterson

Awesome, I can't stand the criminals at Viacom!

loopy_101
loopy_101

All them feels against Viacom, I'm glad Harmonix showed them who's boss.

con47
con47

That's for removing my favorite youtube poops! Karma sucks doesn't it!

KingTrax999
KingTrax999

Tie the case in courts as long as you can, squeeze as much interest out of it while you still have it, so by the time you have to write the big fat checks you'll have made some more money out of it.  GREAT PLAN VIACOM!  It worked!

Kashmiro
Kashmiro

That is some tasty justice that just got served up. Looking forward to whatever Harmonix do next. 

ziproy
ziproy

Wtf? You agree to pay $299,000,000 to a company and then you don't and ask for all the money you already paid  them back? Any 5 year old can tell that is a bad thing to do, and yet they bothered to go through arbitration and then appeal the results??

Probably should just make it and even $300 just so it's easier for Harmonix to count lol

MJ12-Conspiracy
MJ12-Conspiracy

Viacom is a shit company, glad they're felling some hurt.....

Bgrngod
Bgrngod

Just think about that for a second.. we live in a world where a company can just up and decide to ignore a contract and withhold nearly $400 million for half a decade...

Glad they lost.  Hope it hurts them dramatically, because that's just straight up bull shit.

adjsaint
adjsaint

Court of Chancery?  Yeah I'd trust that

MrHatnClogs
MrHatnClogs

Good, that's what Viacom deserves for not letting us watch great childhood shows on youtube.

PlatinumWolfe
PlatinumWolfe

Great...now make a sequel to Amplitude dammit

starfox15
starfox15

Turn that money into another rhythm game. I'm ready for more. Go Harmonix. 

immortality20
immortality20

Awesome, I bought and loved all 3 Rockband games (and dozens and dozens of DLC tracks) so any win for Harmonix is a win for the industry. Very intrigued by Fantasia as well, hope for the best for these original devs. I hope this means more publishers will pay the damn bonuses they promise (looking at you every publisher ever)

uewswsmz9r
uewswsmz9r

Am I honestly the only person that doesn't really care..?

CriticalCritic
CriticalCritic

Lol fuck you, Viacom. This is for the copyright strikes on my old YouTube videos.

PixelAddict
PixelAddict

Good.  Buyer beware. Viacom made the deal, then got all whiny when the market turned.

Glad they were made to pay.

korvus
korvus

Who the hell is Harmonix?

Hurvl
Hurvl

@mischiefmeerkat I wouldn't call 299 million dollars pocket change, but either way, the prestige of winning a court case is also of considerable weight (and schadenfreude :P!).

Kashmiro
Kashmiro

@PlatinumWolfe I had such high hopes for the controller based Arcade Rock Band game they created like a year ago. Then it disappointed me by not being like Amplitude. 

Yomigaeru
Yomigaeru

@HonorOfGod In celebration...I'm gonna go upload a bunch of their copyrighted material to Youtube.

bahamutdragons
bahamutdragons

@Korvus85 The developers of Guitar Hero 1 and 2, followed by the Rock Band franchise and now Dance Central.  Also Frequency and Amplitude.

jd7904
jd7904

@highlanderjimd And it's gonna be a rhythm based peripheral game. SWEEEEET!! XD

HonorOfGod
HonorOfGod

@Damnation_6 @HonorOfGod I dont watch Tv.

korvus
korvus

@bahamutdragons Strange, played lots of GH and don't remember seeing Harmonix logo in there. Maybe I just always skip it...

ziproy
ziproy

@jd7904 Finally the Half-Life game us fans deserve

korvus
korvus

@tjkraz That was very thorough and helpful. Thank you!

tjkraz
tjkraz

@Korvus85 @bahamutdragons Someone else may have a more complete history but here's the gist.  Harmonix developed Guitar Hero and sold it to Activision.  They remained the developer through approx GH2. 

Even after Harmonix' development deal was up, Activision still owned GH.  They farmed-out development of GH3 and others to the likes of Neversoft.  

Meanwhile Harmonix was acquired by Viacom and developed the Rock Band series.  

Harmonix founded both the Guitar Hero and Rock Band franchises, but it's fair to say that mis-management by the Activision and Viacom overlords killed the genre.  (Rock Band: Green Day, GH: Van Halen, Band Hero, etc.)