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THQ is suing EA for “at least $10 million” in damages over allegations that the publisher provided UFC parent company Zuffa with “internal financial information”, causing Zuffa to threaten THQ with the termination of the UFC License.
The legal documentation, which also reveals that EA considered purchasing THQ outright back in 2011, accuses EA of informing Zuffa of “THQ’s perilous financial condition” with the intention to “terminate THQ’s UFC License”.
“Only two weeks after the negotiations with EA broke down, Zuffa, through outside counsel, sent THQ a letter dated December 20, 2011 (the ‘Demand Letter’),” reads the lawsuit. “Zuffa had given no prior indication of any dissatisfaction with THQ’s operation of the UFC Franchise. The Demand Letter criticized THQ’s marketing expenditures on the UFC Franchise, and threatened to terminate the UFC license based on THQ’s insolvency. On information and belief, EA communicated THQ’s internal financial information and projections to Zuffa.”
It continued: “On information and belief, prior to the Demand Letter, EA contacted Zuffa, informed Zuffa of THQ’s perilous financial condition, and expressed interest in acquiring the UFC Franchise directly from Zuffa, causing Zuffa to threaten termination of the UFC License.”
THQ released four titles based on the UFC license between May 2009 and March 2012. In the meantime, EA launched a competitor, EA Sports MMA in October 2010, before acquiring the UFC license in June 2012. The lawsuit reveals that Zuffa paid $10 million to THQ to back out of its contract.
“THQ negotiated a termination of the UFC License with Zuffa and EA,” the documentation continues. “THQ was hamstrung in these negotiations by EA’s intimate knowledge of THQ’s finances, which derived from EA’s confidential data room access during the search for a strategic acquirer. THQ was further hindered in its attempt to get an equitable price for its rights in the UFC Franchise by the leak of the news that it planned to close the San Diego office responsible for developing the UFC Franchise.”
As a result, THQ believes that it was “damaged by EA in an amount to be determined at trial, but consisting of at least $10 million”, and that EA “wrongfully detained the UFC Franchise”.
A court date for the trial has yet to be set.
EA is currently developing EA Sports UFC, due for release on Xbox One and PlayStation 4 in 2014.
Source: polygon.com, cdn3.sbnation.com
