Viacom said it has sued in Delaware court to overturn the arbitrator’s ruling.
Viacom had previously paid $150 million in bonus funds, but sued shareholders for a refund on the grounds that it overpaid. However, the arbitrator concluded that Rock Band sold so well that the contract requires a much higher payout to shareholders.
“The idea that they entered into it with us and then they don’t want to pay it, that’s what the beef is about,’’ said Walter Winshall, a former Boston software executive and an early investor in Harmonix.
Winshall and other investors, meanwhile, recently lost a separate legal fight with Viacom in Delaware court. That suit accused Viacom of failing to negotiate a better deal with game distributor Electronic Arts Inc., which might have increased the payouts to former shareholders. A third lawsuit, also from Harmonix investors, seeks to force Viacom to release $13 million held in an escrow account. Viacom has said the money may be needed to settle patent infringement lawsuits related to Harmonix games.
Viacom said it would not comment further.
Viacom, which owns Paramount Pictures and the MTV, BET, and Nickelodeon cable television networks, paid $175 million for Harmonix in 2006 and agreed to additional payments based on Rock Band sales. By early 2009, sales of the Rock Band games had passed the $1 billion mark.
But shortly thereafter, sales collapsed and never recovered. Last year, Viacom sold Harmonix for just $50, to a group of investors that included company cofounder Alex Rigopulos. The new owners also assumed $100 million in debt.
Harmonix continues to sell Rock Band games and software updates. The company’s current flagship is Dance Central, which is not nearly as popular as Rock Band was in its prime. The latest title, Dance Central 2, has sold about a million units, according to the sales tracking website VGChartz, compared with the nearly 7 million copies sold of the original Rock Band game; its sequel sold 4.4 million.
Harmonix has recently entered the mobile gaming market. Its VidRhythm game lets users of some Apple devices create their own music videos.
A Harmonix spokesman said that the current dispute involves former shareholders and not the company itself. However, Rigopulos and other current Harmonix staffers are among the shareholders who stand to gain from any additional Viacom payouts.
