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WWE to Sue THQ/Jakks


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The following is from GameSpot.com:

World Wrestling Entertainment today announced that the company has filed suit against video game publisher and WWE license holder THQ, toy manufacturer Jakks Pacific, and related defendants. The WWE alleges that the video game license held by THQ and Jakks, which is currently in effect through December 2009, was obtained via a far-reaching "commercial bribery scheme." The WWE has asked the New York District Court to declare the license void and unenforceable.


In total, the papers filed today in the United States District Court for the Southern District of New York comprise 14 different counts of racketeering, bribery, money-laundering, and other such charges. Defendants named in the suit are Jakks Pacific, Inc.; THQ, Inc.; former WWE licensing agent Stanley Shenker & Associates, Inc. (SSAI); Bell Licensing, LLC; highest-ranking Jakks executives Jack Friedman, Stephen Berman, and Joel Bennett; Stanley Shenker; and former WWE senior vice president of licensing and merchandising James Bell.


“WWE’s intellectual property is a valuable asset of the Company, and we believe the actions taken today are necessary to preserve the integrity of our licensing process and essential to ensure that WWE receives appropriate and fair compensation for the grant of a license to use our intellectual property,” WWE chief executive officer Linda McMahon said in a statement released today.


THQ responded to GameSpot's inquiries this afternoon with a "no comment."


The bare-bones version of the scheme alleged in the suit is as follows: In 1998, Bell conspired with SSAI to accept and split over $100,000 worth of bribes from Jakks, then use Bell's position as director of licensing and SSAI's position as WWE's licensing agent to convince the WWE to give its lucrative video game license to Jakks when the terms of its earlier agreement with Acclaim expired.


At this time, the WWE says, other game publishers like THQ and Activision submitted proposals for the license. Both deals were "clearly superior" to the Jakks proposal, but were turned down. The WWE alleges that Bell and SSAI hid the proposals from WWE management, and then advised Jakks to create a superior offer. According to the allegations in the suit, Jakks, not having any video game division, then proposed a joint venture with THQ to obtain the license. THQ agreed to the proposal, and has produced WWE video games ever since.


The WWE seeks the nullification of the video game license as well as all damages arising from the alleged bribery scheme. The entire court filing can be found on WWE's corporate Web site. GameSpot will update this story as it develops.

My comment; SDvsRAW looks to be the last game from THQ sadly, its too far through production to be pulled now.

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The following is from GameSpot:

Late last night, THQ Inc. and Jakks Pacific, Inc. issued separate responses to the lawsuit filed in district court by World Wrestling Entertainment against the two companies, among others. The suit alleges that Jakks Pacific bribed a WWE vice president and licensing agent to secure the video game license that is currently held by a joint venture of Jakks Pacific and THQ. WWE seeks damages and hopes to have the license nullified.


"[Jakks Pacific] denies any allegations of wrongdoing and believes that it will be completely vindicated in the litigation, and looks forward to having the claims against it dismissed," the company revealed in its statement.


A THQ statement disclosed last night that the company was "unaware" of any wrongdoing on the part of Jakks Pacific. "As THQ is not directly accused of any wrongdoing in the complaint--rather the complaint alleges wrongdoing on the part of JAKKS Pacific and others of which THQ was and is unaware--THQ is not in a position to comment on these allegations."


THQ's statement further read, "In any event, either there is no basis for terminating the video game license, or THQ expects to be made whole by those whose conduct is eventually found to be unlawful."


Indeed, it is clear that the company hopes to keep its relationship with WWE. "THQ is committed to preserving its rights under the videogame license with the WWE. THQ believes the WWE is pleased with the manner in which THQ has managed their brand in the video game category. [...] THQ intends to vigorously protect and pursue its rights, if necessary."


Share prices for both THQ and Jakks Pacific dropped after the WWE's announcement. In trading today, before the bell, Jakks shares dropped from $24 down to $13, while THQ saw a comparatively lesser dip, from about $18.50 to $17. WWE stock rose about 30 cents following the announcement Tuesday afternoon.


The World Wrestling Entertainment license is not the only major property that could be in play at THQ. Last month, GameSpot reported that publisher Midway would seem to be the next home for the Nickelodeon properties currently held by THQ, because Sumner Redstone, CEO of Nick's parent company Viacom, owns 73.8 percent of Midway stock and is even toying with the idea of a takeover.


According to the allegations in the lawsuit, former WWE senior vice president of merchandising and licensing James Bell first conspired with Jakks Pacific to steer THQ away from pursuing video game rights to the WWE franchise. He then offered THQ partnership in a joint venture. The court filings did not indicate any belief on the part of WWE that THQ had any knowledge of the alleged bribery scheme.


Under the current terms of the agreement, THQ and Jakks' license to produce video games based on WWE properties is valid until December 2009, with a five-year right of renewal favoring Jakks. WWE alleges that the unorthodox length of the agreement was also a result of the backstage bribery deal.


WWE declined further comment on the matter, noting that the "court filing and news release clearly outline our position." GameSpot will continue to follow this story and will provide updates regarding any new or additional information gathered.

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Just wanted to add on this note Gamesradar are reporting that should WWE get out of their deal with Jakks/THQ they will look to sell the rights to EA. Cynics are saying that the WWE are intentionally trying to get out of their toy and games deals so they can auction them off to the highest bidders.
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Of course EA have a deal with No mercy maker AKI so all in all that could be pretty good if this deal they find in favour of WWE. Of course then that leaves the SD makers with a lot of time on their hands and a TNA video game liscence floating about lalalala TAKE IT
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