A former executive of Take-Two Interactive filed a $50 million lawsuit against the Grand Theft Auto publisher in a federal court in Nevada last week.
Robert Alexander alleges that Take-Two breached an oral employment contract when, in 2004, former Take-Two CEO Paul Eibeler terminated a distribution deal with Alexander and his company, Game Ballers. Eibeler had taken over the reigns of T2 when CEO and company founder Ryan Brant ran afoul of the Securities and Exchange Commission. Prior to being forced out, Brant and Alexander apparently enjoyed a cooperative working arrangement.
The complaint is an interesting read, and provides insight into what appears to be the very big bucks business of video game distribution.
In his suit Alexander claims that he has been in the game biz since he was 16. He says that he built up a distribution company called Jack of All Games which he sold to Take-Two in 1998. After closing that deal he spent some time as a member of the T2 Board of Directors, leaving in 1999.
In 2003 Alexander formed a new distribution company, Game Ballers, and began negotiating with Ryan Brant and other execs to partner with T2 and Jack of All Games. Although Alexander began working with T2, his deal was never finalized before legal troubles forced Brant to leave the company in March, 2004. When Eibeler assumed the CEO post later in the year, Alexander apparently fell out of favor and alleges that he was not paid what he was owed.
If Alexander’s complaint is accurate, the numbers involved are staggering. The distributor claims that Brant agreed to pay him $240,000 in annual salary with 20% annual raises, a $25,000 monthly expense allowance, 50,000 shares of T2 stock plus options and $.50 per game handled by his distribution company.
We have a request in to Take-Two for comment.
UPDATE: Take-Two has declined to comment. In fairness, I should point out that Strauss Zelnick’s current management team had no involvement with T2 during the time frame about which Alexander is making his claim.