Viacom is disputing a decision by court-appointed arbitrators that it pay $383 million to the former shareholders of Harmonix Music Systems, the video game studio behind Rock Band and Guitar Hero.
According to a regulatory filing on Tuesday, Viacom was ordered to make the payment to conclude a long-simmering dispute over bonus payments for Rock Band. as part of its deal to buy the studio in 2006, Viacom paid $175 million up front and agreed to make later bonus payments tied to sales of that game, which was in development at the time.
At the time, the acquisition was seen as a way to link Viacom’s MTV brand to popular music games like Guitar Hero, with Rock Band arriving the next year.
Viacom made $150 million in bonus payments in 2007, but as sales of the game fell, it made no further payments, and eventually sought a substantial refund on what it had already paid. Despite the popularity of Rock Band, Viacom has said the game never made a profit because of its high production costs.
Late last year, just as Viacom was looking to unload the studio, the original owners of Harmonix filed suit to recover the unpaid bonuses. Viacom sold the studio in late 2010 to the investment firm Columbus Nova.
According to Tuesday’s filing, arbitrators determined on Dec. 19 that Viacom owed the $383 million in addition to what it had already paid, which would bring its total payments to $533 million; the original Harmonix shareholders had sought $700 million.
But Viacom said it had filed suit in a Delaware court to compel the arbitrators to consider evidence that the company says had been “improperly excluded” from the procedure.
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