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.
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.
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.
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