The big bust up between publisher THQ and Jakks Pacific has caused some pain for World Wrestling Entertainment, but the license renewal is expected to proceed soon enough.
Analyst Michael Pachter points out that both THQ and WWE want Jakks Pacific out of the way, as both no longer enjoy a relationship with them. Beyond the renewal, THQ "cannot comment."
The original renewal deadline was for November 1st but that has now moved to December 21st, 2009. Once the deal is signed then THQ and Jakks Pacific, as it currently stands, would hold rights to produce from the WWE license.
"JAKKS and THQ have been suing one another for a bunch of different reasons, but the relevant one is that THQ is trying to terminate the joint venture, so that it can enter into a license deal with WWE on its own," notes Wedbush Morgan analyst Michael Pachter, reports .
"JAKKS said in a counterclaim that a) THQ cannot terminate the JV unilaterally (I'm not sure that I agree, but that's what they said) and b) even if the JV terminates, THQ signed a contract that said it would not produce WWE games for 12 months after the termination."
"THQ counterclaimed that a) it can terminate unilaterally (I think this is the right interpretation, but I don't have the contract) and b) it doesn't have to honor the 12-month non-compete upon termination (I think THQ has a very weak argument for this one, but again, I don't have the contract)."
"The likely outcome is that the JV gets terminated and that JAKKS stops getting money from the deal in 2010. If JAKKS enforces its non-compete clause with THQ, both THQ and WWE get hurt, since there won't be any games produced," continued Pachter.
"JAKKS doesn't gain anything but the good feeling it might derive from being spiteful. However, THQ and WWE lose something..." Corporate marriage is just as bitchy as people marriage it seems, except there's just more money involved... and press releases.
THQ wants to renew with WWE, sound good to you?
Deadline extended for WWE license renewal, THQ intends to sign
29 October 2009 | By Simon Priest