Defunct publisher THQ claims that their previously owned license to UFC video games and its allegedly fraudulent sale to EA was also a result of a breach of contract between THQ and UFC parent company Zuffa.
THQ is suing Electronic Arts and Ultimate Fighting Championship (UFC) parent company Zuffa over the UFC license. The video game license was previously owned by THQ but now belongs to EA.
Filed on October 4 in the U.S. District Court in Delaware, the complaint by THQ alleges that EA and Zuffa conspired to end the licensing agreement between THQ and Zuffa in order to transfer the license to EA.
THQ released three UFC titles from when it originally signed an agreement with Zuffa in January 2007. UFC Undisputed 2009, UFC Undisputed 2010 and UFC Undisputed 3 all received positive reviews but in 2011, when THQ started having financial issues, it began to consider selling the license to another company.
According to THQ, it had “several discussions” with EA in December 2011 regarding the sale of the license. However, before EA stopped speaking with THQ within the same month, THQ showed “internal financial information, including detailed sales revenue figures for the UFC franchise, and projected marketing expenditures on the next UFC franchise game,” to EA.
At the end of December 2011, Zuffa sent THQ a letter stating its intent to terminate the licensing agreement due to their financial problems. THQ alleges that Zuffa’s threat to terminate the agreement was a result of EA providing it with confidential information about THQ’s finances.
“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 fromn Zuffa, causing Zuffa to threaten termination of the UFC license.”
In June 2012, THQ transferred the license to EA less than half a year before it declared bankruptcy. THQ was paid $10 million by Zuffa for agreement termination and for the transaction, according to the complaint. THQ added that the UFC franchise was worth at least $20 million at the time and perhaps more than that to EA.
THQ wants the license transfer revoked, the recovery of the IP or its monetary equivalent and at least $10 million in damages. The publisher also wants EA to “turnover [sic] the profits of the UFC franchise” as well as to disallow bankruptcy claims made by Zuffa against THQ, all of which amount to $1.96 million.
EA is currently producing EA Sports UFC which is due to launch next spring on next-gen consoles.