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.
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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