AGOURA HILLS, Calif., Jul 27, 2009 (BUSINESS WIRE) -- THQ Inc. (NASDAQ:THQI) today announced that it has prevailed in its
binding arbitration with JAKKS Pacific, Inc. The arbitrator has
established a significantly lower preferred return payment rate to JAKKS
Pacific for WWE video games sold under a license granted by World
Wrestling Entertainment, Inc. to THQ/JAKKS Pacific LLC. The new rate,
which is 40% below the previous rate, is effective as of July 1, 2006
and applies through December 31, 2009.
As a result, the company expects to report a one-time benefit of
approximately $23 million during the fiscal 2010 second quarter ending
September 30, 2009, and to reduce its accrued venture partner expense on
its balance sheet by the same amount.
Under the THQ/JAKKS Pacific LLC. operating agreement, JAKKS Pacific is
to be paid a preferred return from sales of the LLC's WWE-licensed video
games. The preferred return rate was to be reset for the period
beginning July 1, 2006 through December 31, 2009. When the parties were
unable to agree on a new preferred return rate, THQ filed suit to compel
arbitration pursuant to the terms of the operating agreement.
"As we expected, we have prevailed in this matter. We are gratified the
arbitrator agreed the preferred return rate to JAKKS Pacific on WWE
video games will be significantly lower," said James M. Kennedy, THQ's
executive vice president, business and legal affairs.
THQ Inc. (NASDAQ:THQI) is a leading worldwide developer and publisher of
interactive entertainment software. The company develops its products
for all popular game systems, personal computers and wireless devices.
Headquartered in Los Angeles County, California, THQ sells product
through its global network of offices located throughout North America,
Europe and Asia Pacific. More information about THQ and its products may
be found at www.thq.com
THQ, THQ Wireless, and their respective logos are trademarks and/or
registered trademarks of THQ Inc.
This press release contains statements that are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited to, the
company's expectations that its arbitration with JAKKS Pacific, Inc. has
been concluded and the arbitrator's decision is final; and future WWE
video game sales expectations. These forward-looking statements
are based on current expectations, estimates and projections about the
business of THQ Inc. and its subsidiaries (collectively referred to as
"THQ") and are based upon management's beliefs and certain assumptions
made by management. Such forward-looking statements are subject
to risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, including, but not limited to, economic, competitive and
technological factors affecting the operations, markets, products,
services and pricing of THQ. Unless otherwise required by law,
THQ disclaims any obligation to update its view on any such risks or
uncertainties or to revise or publicly release the results of any
revision to these forward-looking statements. Readers should
carefully review the risk factors and the information that could
materially affect THQ's financial results, described in other documents
that THQ files from time to time with the Securities and Exchange
Commission, including its Quarterly Reports on Form 10-Q and its Annual
Report on Form 10-K for the fiscal period ended March 31, 2009, and
particularly the discussion of risk factors that may affect results of
operations set forth therein. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date of this press release.
SOURCE: THQ Inc.
Julie MacMedan, 818-871-5125 (Investor Relations)