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UPDATE: Viacom Responds To Latest Harmonix Lawsuit

by Matthew Kato on Dec 22, 2010 at 03:15 AM

UPDATE: Viacom has responded to the lawsuit from ex-Harmonix shareholders (including its founders) regarding alleged non-payment of performance-based royalties.

Gamasutra has the response from Viacom, which basically blames the lawyer representing the ex-Harmonix shareholders, Walter Winshall, saying that he declined Viacom's early proposals, and charges that Mr. Winshall is trying to now cover his butt (not a legal term – ed.).

"Mr. Winshall made a decision to spurn our early proposals," says an unidentified representative for Viacom, "which were highly favorable to the stockholders he represented. He failed to get the unjustified windfall he hoped for and as a result damaged those shareholders, who are obligated to repay amounts already received. Having failed in his game, he is attempting to rewrite the contract and history with false and irrelevant claims, no doubt to protect himself from the very unhappy stockholders he represents.”

 

ORIGINAL STORY: Some of Harmonix's former shareholders – including its founders – are suing soon-to-be-former parent company Viacom, accusing it of trying to duck out of paying some performance-based royalty payments.

Gamasutra has a detailed account of the complaint, which in essence charges that Viacom has not only failed to payout previously agreed-upon performance royalties (specifically for 2008), but has also deliberately manipulated its handling of the Rock Band franchise – including the Viacom/EA distribution deal – to avoid having to do so. The pair have already sparred over royalties in the past, with Viacom claiming that Harmonix owed it a partial refund on a $150 million royalty payment to the developer in 2007.

Viacom is currently trying to sell Harmonix (which it purchased in 2006). Viacom has stated that it wants higher sales numbers from the franchise and balks at the music licensing cost of the entire endeavor. When you add it all up, it seems clear that Viacom bit off more than it could chew, and its alleged behavior leads to easy speculation that throughout its relationship with Harmonix Viacom has been trying to squeeze whatever savings it could from the deal. Whether it has been doing so legally or not, is another matter.