The music industry has seen its share of unusual lawsuits but a recent filing by media conglomerate Viacom Inc. ranks up there. According to the Hollywood Reporter, the corporation went ahead with plans to sue stockholders of its former subsidiary, Harmonix Music Systems, demanding to be repaid in excess of $131 million.
The source of all this strife? Rock Band, the video game created by Harmonix which saw an explosive growth towards the end of last decade. Famously, sales dropped off rapidly and the musician simulation gaming industry went dry. Viacom acquired Harmonix in 2006 for $175 million but then sold the company at the end of 2010 at a huge loss. While financial details were never officially disclosed, the LA Times reported that the sale was for a mere $50 – no, that’s not missing any zeroes – to a private investment firm in New York. The last-minute sale created a $50 million 2010 tax benefit for Viacom, who had invested an additional $150 million in Harmonix in 2007.
Ever since the sale, former Harmonix stockholders and Viacom have not been friends. The original Harmonix owners sued Viacom for $13 million, claiming unfair business practices. Viacom has now answered by suing stockholders in hopes of being able to recoup more than $131 million on the claim that their initial earn-out payments were miscalculated. Harmonix shareholders, meanwhile, have not agreed to a refund and, in fact, maintain that they’re actually owed even more than the initial earn-out. Free Rock Band consoles don’t count.