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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: shotz who wrote (8554)	11/13/1998 5:05:00 PM
From: Sigmund	Read Replies (1) \| Respond to of 14266

<<<< why BF would make such an arrangement. <<< Jakks won the license and then later cut THQI in. Does that help answer your question?

To: shotz who wrote (8554)	11/13/1998 5:53:00 PM
From: Kory	Read Replies (2) \| Respond to of 14266

shotz, You have a few things incorrect. First, I guess it must be typos when you say that: > 20 million, of which THQ will record their $100 million (1/20) ...> I would assume you mean $10 million (1/2)... Am I correct or am I missing something in your question? As for equitable and risk/reward, the gains and losses for the joint venture are split evenly. Therefore gains and losses are split regardless of who spent the original money. For example, someone is going to have to pay Nintendo for manufacturing a cartridge. It doesn't really matter who cuts the check as the joint venture costs and revenues are shared equally. In your example, if the game is a stinker, assume it sells $0, THQ paid out $50M and JAKKs $30M. In this case, JAKKS would be liable to THQ for $10M. In other words, each of them loses $40M. I guess what your real concern probably is "What if THQ provides over 50% of the EFFORT?". Now we are down to the #1 reason partnerships get into trouble. One partner feels they are doing more than the other. Could happen with this joint venture as well. THQ may feel that designing the game and supervising the development team is the key ingredient for success. JAKKS may feel that the marketing and managing key relationships at Titan are more important. Bottom line is that THQ made the deal. I don't know for a fact that THQ got in after JAKKS already had the license. I don't think anything like that was ever published. However, I'm sure that JAKKS had contacts/relationships with Titan which had to help. Sometimes you have to pay the salesperson even if you think he just eats dinner and plays golf all day long. Kory