Viacom seeking Harmonix bonus refund

Media conglomerate wants back a "substantial portion" of $150 million in performance-related payouts to former Rock Band developer shareholders.

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In 2006, MTV Games parent company Viacom bought its way into the then-burgeoning rhythm-game franchise by picking up Guitar Hero creator Harmonix for $175 million. As part of the deal, Viacom agreed to gild the agreement with additional payouts to Harmonix shareholders, should the studio top "specific contractual targets against a defined gross profit metric" for 2007 and 2008.

As The Beatles might say, "Money (That's What I Want)."

Those payments commenced in 2008, when Viacom revealed through a Securities and Exchange Commission filing that it had set aside up to $208.7 million to pay out incrementally to former Harmonix shareholders through 2009. With the decade now closed, it appears as if Viacom wants a "substantial" portion of the $150 million it ultimately paid out as part of the Harmonix purchase agreement back.

"In 2008, we paid $150 million, subject to adjustment, under this earn-out agreement related to 2007 performance," the media conglomerate said as part of its full-year financial earnings report today. "At December 31, 2009, we believe that we are entitled to a refund of a substantial portion of amounts previously paid, but the final amount of the earn-out has not yet been determined."

Viacom did not indicate the specific reason it believes it overpaid former Harmonix shareholders, and MTV Games had not responded to requests for comment as of press time. However, the media conglomerate did say today that its 6 percent revenue slip for its Media Networks division, of which MTV Games and Harmonix are members, "was driven primarily by lower sales of Rock Band bundles."

Still, Harmonix has continued to see success from its flagship rhythm game franchise. In March 2009, MTV Games announced that the series had earned $1 billion in North America alone. In December, the publisher announced that The Beatles: Rock Band had sold more than 1 million units worldwide, though it also noted that 39 Harmonix employees had been laid off.

Discussion

19 comments
green_dominator
green_dominator

I'm not a big law buff, I know a few things but I'm no expert but reading the bit above if I was judging this matter I'd tell Viacom to shove it. They paid for the franchise, it did well for a time and now that the tide has changed they want out and their cash back..... Bull! You don't just buy a car and after a year return it for full price, They made a choice and now they need to live with it, case closed.

Phoenix2Raven
Phoenix2Raven

This is the reason why the gaming industry is in trouble or going to be quite soon. The profit margins that are expected are insane. They make a profit but if it's not the crazy out of this world profit they fire people and say that their losing money. What happen to realistic profits. The gaming industry grew too fast and now these greedy SOBs insist on it growing at the same rate always or they feel they have lost money. It is just ridiculous that they can make so much money but still fire people and close studios. Exactly how can they expect to sustain this kind of growth rate and profit without basically bottoming out completely like what happen in the 80s. If they only would adjust their expectations to something more reasonable this industry would be okay but no they will continue to do things so they can ride the consumers for as much money as humanly possible until consumers become angry and stop buying which is what is happening with the rhythm game industry.

Tezerel
Tezerel

Plus, is it just me, or have Gamestops articles been getting kinda boring lately... Idk they either say omg we heard an analist say this, or something kinda dorky like this.

Tezerel
Tezerel

Wait they didnt even pay Harmonix, but theyre SHAREHOLDERS? OH REALLY? What power do they have over them? They payed them extra for really no reason, theyn said hey we want it back. Kinda weird, considering everyone would drop their shares in a heartbeat if anyone actually said that. Not like its going up in price anyways...

Valacan
Valacan

This article says nothing. They want money back but we don't know why? What kind of article is that.

Rottenwood
Rottenwood

Tough luck, kiddos. The games Harmonix made were very well-reviewed, so you can't blame them. The market is oversaturated. Good on you, Harmonix. Go zip around on a yacht with Swedish bikini models. Viacom will learn a valuable lesson about jumping on a bandwagon a few years too late.

SDBusDriver1979
SDBusDriver1979

I guess Viacom finally heard they were doing a Green Day Rock Band and didn't want their money to be tainted on emo music so they want their money back. am I right?

Roger_Smith
Roger_Smith

I'm sure this has nothing to do with the fact that the rhythm genre is no longer as profitable as it was.

tyco_ex
tyco_ex

LMAO. Basically they made a poor business decision and now want their money back? The judge should take one look at this and laugh as he throws it out.

mietha
mietha

Notice: it's not lower GAME sales they are citing, but lower BUNDLE sales... Exactly how many bundles to they expect each consumer to buy?

acer_062
acer_062

Go tell some who cares!!!

wiiplay1
wiiplay1

[This message was deleted at the request of the original poster]

Ohaidere
Ohaidere

@gnbfd "More proof that capitalism fails." You're not serious, right?

gnbfd
gnbfd

WTF They can't do that! That's actually horrible. More proof that capitalism fails. Even if Rock Band 2 wasn't one of my favorite games I'd still be on their side.

Narutofan30
Narutofan30

More Beatles DLC (Thats What I Want!)

wiiplay1
wiiplay1

They should've thought about that before buying Harmonix.

DAMSOG
DAMSOG

Maybe they should have covered ABBA's song instead....MONEY MONEY MONEY...its a rich mans world. This squabbling by corporate giants only gives creedence to the theory that the gaming industry is being taken over by money hungry corporations who's only goal is to line their pockets with cash, forgetting who makes them all this money just makes them sound even greedier. Since when did this type of news-article become interesting to the average gamer? Because we all suffer as a result..you have been warned.