Specifically, Viacom's acquisition deal stated that Harmonix shareholders would be awarded with 3.5 times any gross profit of the Rock Band franchise over $32 million in 2007, a deal that Gamasutra states had "no cap." A similar deal applied to 2008 for profits over $45 million. To put things in perspective, the Rock Band franchise surpassed $1 billion in sales by March of 2009, and that was just in North America.
The shareholder suit alleges that Viacom attempted to manipulate Harmonix's earn-out payments by negotiating a deal with EA that benefitted Viacom instead of Harmonix. Specifically, the shareholder group claims that Viacom ignored the opportunity to lower EA's distribution cost -- in effect raising potential Rock Band profits -- as part of a deal to continue distribution. Instead, the company allegedly made a deal that would see EA purchase millions in advertising from MTV, thus benefitting its parent company, Viacom.
It's evidently a pretty hairy situation, especially in light of Viacom's recent decision to sell Harmonix entirely. We've reached out to Harmonix for comment.
