UPDATE - Ailing publisher Atari has managed to maintain the rights to its popular Dragon Ball Z games, while announcing the completion of restructuring initiatives aimed at stabilizing the company's operations.
Update: Added statements on further restructuring measures.
Atari will pay Dragon Ball Z license holder FUNimation $3.5 million, comprised of a $2.7 million cash payment and an $800,000 reduction in the amount of a recoupable royalty advance made to FUNimation.
In 2004, Atari paid $10 million to FUNimation for the exclusive US interactive entertainment rights to the Dragon Ball Z franchise through January 2010.
"With this dispute behind Atari, Inc. we look forward to continuing our relationship with FUNimation and continuing to deliver to our consumers exciting products from the Dragon Ball Z franchise," said recently appointed chief restructuring officer Curtis G. Solsvig III.
On October 18 this year, FUNimation had issued a notice to Atari threatening to terminate the licensing agreement based on alleged breaches of the contract.
Atari said at the time that it disputed the validity of the complaint.
The Dragon Ball Z franchise has been a solid seller for Atari. November 2006’s Dragon Ball Z: Budokai Tenkaichi 2 for PS2 and Wii together sold 460,000 units in 2006, according to NPD Group. Dragon Ball Z: Budokai Tenkaichi 3 for PS2 and Wii is currently on store shelves.
New York-based Atari is the US arm of Lyon, France-based parent Infogrames. Atari announced in November its complete withdrawal from game production as it moved into publishing and distribution only. Former CEO David Pierce had resigned around the time of the change in strategy.
The firm also announced Monday new restructuring initiatives, including an amendment to a $10 million credit facility with major Infogrames investor BlueBay.
Atari said in a statement that it has “entered into an amendment to the Senior Secured Credit Facility with BlueBay High Yield Investments (Luxembourg) S.A.R.L. that will increase its borrowing capacity under the facility from $10 million to $14 million.”
Another measure Atari is taking as part of restructuring includes the termination of existing distribution agreements with Infogrames. Atari said that it has entered into a new three-year agreement with its parent that will have Atari distributing Infogrames games in North America.
As part of the agreement, Atari will license back to Infogrames use of the “Atari” trademark in North America “in connection with the URL www.atari.com for the purposes of a global online initiative to be lead by Infogrames.”
Atari added that further corporate streamlining measures have taken effect with the termination of existing corporate management and service contracts with Infogrames.
“As part of the termination of the corporate management service contracts and the reduction of production and development activities at Atari, Inc., Atari, Inc. agreed to the transfer of certain employees, with such employees' acceptance, from the production and development businesses of Atari, Inc. to Infogrames,” the firm revealed.
Atari, which announced further workforce reductions in November, said that it expects to save around $5.3 million per year on current payroll, with $1.3 million of that amount relating to the transfer of Atari employees to Infogrames.
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In 2004, Atari paid $10 million to FUNimation for the exclusive US interactive entertainment rights to the Dragon Ball Z franchise through January 2010.
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