EB UK v. EB US

Royalty payments at stake

Electronics Boutique UK is going to the High Court to see if it can overturn a royalty agreement with Electronics Boutique.

EBUK, the UK's biggest games software retailer, currently pays one per cent of turnover to EB Inc., of America, in accordance with a services agreement struck between the two firms in 1995. This amounted to £4m last year.

EBUK has taken legal advice to the effect that the agreement is no longer valid, as the recent fall in the Kim family's EBI shareholding to 46 per cent means an effective change of ownership.

It has issued a declaratory action to see if its interpretation is correct. A judgment is expected to take several months.

EBUK and EBI were once allies: now they are looking like competitors, with the two companies racing to gobble up games retailers across continental Europe. ®