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Friday, May 27, 2022

Wrestling Product Dispute Settled

THQ Inc. and JAKKS Pacific Inc. said they will end their joint venture to produce toys and video games based on World Wrestling Entertainment Inc. characters, with THQ entering into a separate agreement with WWE.

Analysts estimate THQ of Agoura Hills and Jakks of Malibu have made about $20 million each from the WWE deal annually, but the two partners have squabbled in recent years over whether each was being paid fairly. Under the three-party settlement announced late Tuesday, all claims are withdrawn and all litigation ended without any party admitting wrongdoing. The joint venture was launched in 1999.

THQ will let the joint venture with Jakks expire on Dec. 31. THQ will pay WWE $13.2 million, with the two companies signing an eight-year video game license that begins Jan. 1. THQ will also pay $20 million over the next four years to Jakks.

The eight-year licensing deal gives THQ exclusive rights to make video games based on WWE content, such as the recently released “WWE Smackdown vs. Raw.

“This agreement ensures that WWE games will continue to be an important cornerstone of THQ’s annual release schedule for the long term,” THQ Chief Executive Brian Farrell said in a statement.

In midday trading on the Nasdaq, THQ shares were up 17 cents, or 3.5 percent, to $4.98, and Jakks’ shares were up 14 cents, or 1 percent, to $12.45.

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