$18 million windfall for Rockstar's rock stars

Take-Two issuing more than 2.8 million shares to Housers, key studio members following GTAIV's 13-million-unit shipment.


As part of its post-earnings conference call yesterday, Take-Two Interactive said that a full 40 percent of its business during the November-January corner came from its subsidiary, Rockstar Games. Namely, the publisher announced that Rockstar's Grand Theft Auto IV has now shipped more than 13 million units since the top-rated action adventure game launched on the Xbox 360 and PlayStation 3 last April. (The game was also released for the PC in December.)

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GTAIV's sucess bodes well for top Rockstar management, including studio cofounders Sam and Dan Houser and the game's producer, Leslie Benzies. As part of their contract renegotiations announced in December, the Housers and other top Rockstar personnel were offered a stock-based profit-sharing arrangement in order to retain their services until January 31, 2012.

Related to that deal, Take-Two revealed yesterday that it plans to remunerate "certain employees of Rockstar Games" with 2,849,003 restricted shares in the company during its current fiscal year, which ends October 31, 2009. Take-Two notes that the stock issuance is not yet final, as stockholders will be required to approve the compensation at the company's annual meeting on April 23.

Highly volatile since EA walked away from its $26-per-share buyout offer in September, Take-Two's stock was trading at $6.36 a share as of press time. Therefore, if and when the stock issuance is approved, Rockstar employees covered under the agreement stand to gain roughly $18 million total in stock-based compensation.

The profit-sharing deal is likely to continue lining Rockstar brass's personal coffers for some time. In February, Rockstar released the first Xbox 360-exclusive expansion pack for GTAIV, setting a one-day Xbox Live sales record in the process. While Take-Two declined to comment on The Lost and Damned's exact sales figures, prolific Wedbush Morgan Securities analyst Michael Pachter expects the DLC to sell 2 million by the end of October. Rockstar plans to release Grand Theft Auto: Chinatown Wars for the DS later this month, and the game maker is also prepping a second Xbox 360-only DLC for GTAIV.

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