As a pro baseball player, Curt Schilling made his mark as a starting pitcher.  Though there were a few transitional years early in his career spent as a reliever, over twenty years, the majority of time he entered a game, it was from the beginning.  Schilling started 436 out of 569 games. In his second career as a gaming entrepreneur, he doesn’t appear to have any qualms about coming in off the bench.

With financial troubles (see sidebar below) pushing THQ to cut more staff and studios, Schilling’s upstart game company 38 Studios was more than happy to acquire THQ’s online role playing studio, Big Huge Games.

Big Huge Games (BHG) was founded in 2000 by a veteran group of PC game developers.  The Maryland based studio’s early works were published by Microsoft Game Studios.

(more…)

Confirming rumors that first began to circulate late last week, Facebook announced this morning that it secured a substantial new private equity investment from Russian based investor, Digital Sky Technologies (DST). (release)

DST, whose portfolio companies are estimated to account for more than 70% of all Russian language page views on the Internet, will buy preferred stock equal to a 1.96% stake in the company for $200m.   No details have been disclosed regarding the rights associated with the preferred class. 

The transaction sets Facebook’s valuation at about $10b.

In a teleconference, Facebook characterized the incoming capital as a cushion and not a necessity.  The new money, Facebook suggested, will offer added flexibility. Whether true, or a bit of spin, it is certain (more…)

It was a case of now you see it, now you don’t.  Last fall, Real Network’s then newly launched DVD copying software platform, RealDVD, went from controversial to contained in the blink of an eye.  Just days following the program’s launch, with litigation already filed by both sides,  U.S. District Judge Marilyn Patel issued a temporary restraining order blocking all sales of the program pending a broader review of the software’s legality.  The program has yet to resurface and now the ongoing copyright litigation is poised to expand.

Designed to enable consumers to create digital to digital archival copies of DVDs, the program was intended to allow owners to store DVDs on a computer for viewing, or backup, without the need to have the disc in the drive.

(more…)

Bankruptcies are rarely a lender’s friend. They’re a worst case scenario that often means a best outcome of pennies returned on the dollars of investment.  Midway Games ongoing bankruptcy process has been a demonstration in point.  Triggered by debt covenants and a sketchy transaction, the proceedings have been riddled with confrontational debate.   The rancor’s even spilled over into a counter suit.

Monday, creditors filed suit against the company’s board members, former majority owner, Sumner Redstone, and the buyer of Redstone’s shares, Mark Thomas. The creditors are charging Redstone with fraudulent transfer, and accusing him and others of breaching their fiduciary duties.

Everything stems from Redstone’s firesale giveaway of his Midway holdings in November.  Parting with 87% of the company for merely $100k gave Redstone and his affiliated holdings more than $700m in tax losses which created a massive tax write off.  That write off, Redstone’s gain, creditors argue, helped shore up the finances at Redstone’s National Amusements but put Midway into a tailspin.  

“The transaction caused Midway irretrievably to lose the ability to take advantage of its valuable accumulated net operating losses and other tax assets,” creditors say.

(more…)

Leading a busy week of entertainment industry earnings reports that also includes News Corp and CBS, both Marvel Entertainment and Disney reported today. The quick facts, by the numbers:

(more…)

The print media’s struggle to adapt to the drastic changes wrought by the Internet is far from over but today the New York Times Co. managed to at least partially defer the immediacy of one of its pressing problems:  Boston Globe union negotiations.  After more than a month of contentious talks, a settlement was reached with most participants.

The Boston Globe paper lost $50m in 2008 and was poised to lose another $85m this year if it continued on the same path.  Looking to slow the bleeding, the Times Co. wanted at least $20m in concessionary cutbacks, and other contractual concessions (including the elimination of some lifetime job guarantees).

(more…)

In October, Google announced the settlement of a three year copyright battle over its practices of scanning and displaying books at Google Book Search. 

With high level soundbytes, the deal was billed as an achievement.  Richard Sarnoff, Chairman of the Association of American Publishers, characterized it as a “win for everyone.”  All that was necessary to go forward was court approval and that was considered a formality scheduled for May 5th.   Turns out, that timetable was a little optimistic.

On Tuesday, responding to objections made by a number of authors, Judge Denny Chin of the U.S. District Court for the Southern District of New York extended the settlement’s review period until September 4th and scheduled a final fairness hearing for October 7th, 2009.

The authors had expressed concern that the original schedule didn’t provide enough time to review the complex settlement’s terms.  They requested six more months.   Google and the Author’s Guild, the core parties of the settlement, thought a sixty day extension should be enough.  The judge split the difference.

(more…)