Add another round to the three-way grudge match between Jakks Pacific Inc. (NASDAQ:JAKK), THQ Inc. (NASDAQ:THQI) and World Wrestling Entertainment.
At issue is a WWE video game license owned by a joint venture operated by toymaker Jakks and video game publisher THQ.
Jakks on Wednesday said it intended to exercise an option to extend the license, set to expire on Dec. 31, for five years. THQ responded with a lawsuit claiming under terms of the JV it has the right to approve any extension. The companies have agreed to arbitration in hopes of avoiding a lengthy court fight.
So what's the back story? The professional wrestling Web site
PWTorch.com has the details, but essentially Jakks will no longer make WWE toys after 2009, after the wrestling giant decided to go with Mattel Inc. (NYSE:MAT). To keep its hat in the WWE ring, Jakks wants to extend the video game license. THQ, meanwhile, is reportedly ready to end its relationship with WWE over "certain decisions regarding video game content."
It was just over six months ago that Jakks and THQ tag-teamed to defeat WWE in a four-year-old licensing bribery dispute. WWE claimed that JV management bribed WWE executives to receive licenses. The lawsuit also charged that THQ was ultimately forced into its partnership with Jakks after its own licensing request was denied.
This battle has the makings of a perfect WWE setup: three angry players with a long history of disputes. It also shows just how tricky JVs can be to manage when the objectives of its parents change over time. Anyway, if arbitration fails, perhaps this match can be resolved in the ring. - Suzanne Stevens
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