Sesame Street looks to get out of its SeaWorld deal
The owner of Sesame Street wants out of its license agreement with United Parks & Resorts.
Sesame Workshop filed a lawsuit in U.S. federal court yesterday asking for a judge to terminate its 2017 license deal with SeaWorld Parks & Entertainment, which is now operating as United Parks. The case is Sesame Workshop v. Seaworld Parks & Entertainment, Inc. - Case No. 1:26-cv-02047 in the Southern District of New York.
A federal judge in Florida in 2024 ordered United Parks to pay Sesame Workshop $11.4 million in a dispute over unpaid license fees. [See Sesame Street wins legal battle against SeaWorld.] Sesame Workshop said in yesterday's filing that United Parks made that payment late last year, but now again has stopped paying royalties for licensing the Sesame Street characters in its theme parks.
This is not the first party to accuse United Parks of stiffing its partners. The City of San Diego has been in court with SeaWorld San Diego, as well, over unpaid lease fees. [See San Diego, SeaWorld settle rent dispute.]
Sesame Workshop also cited United Parks' decision to close its Sesame Place San Diego park with little notice last September, converting it from year-round to seasonal operation. [Sesame Place San Diego drops holiday events for early closure] That park is set to reopen March 27.
Sesame Workshop is asking the court to terminate its license agreement with United Parks and for unspecified damages and legal fees.
A United Parks spokesperson issued a statement to the press: "We are aware of the lawsuit filed by Sesame Workshop and look forward to setting the record straight in court."
Update: Click over to the Discussion Forum, where we are talking about what the next step for Sesame Workshop might be: Which theme parks could get the U.S. license for Sesame Street?.
Replies (7)
I visited SeaWorld Orlando again last year and continue to believe their Sesame land is very well done. This lawsuit is an embarrassment to the chain and I hope it gets straightened out. If Sesame gets what they want, we're not just talking about some rethemed children's areas. I would think whole parks close at that point. The kerfuffle makes even less sense when you remember Sesame Place San Diego only opened under that name in 2022. A lot of money was spent to retool the entire property around one IP.
United parks is such a joke. Can't even pay for any IP licensing. I know they're making money - where is it going?
How does this even happen? The incompetence is staggering.
From what I've heard, there's been increasing friction in this relationship since the late 2010s, and based on the timing of when payments seem to have stopped, it seems the San Diego park may have been the linchpin in causing this to happen. Apparently Sesame was pushing for that over the other sites being considered, but I've heard from people in the know it didn't really increase revenue at the property during the waterpark season and has operated at a significant loss outside of that period (which is probably why they tried to switch back to a seasonal schedule). That doesn't give United the right to just stop paying what they're contractually obligated to pay, of course, but it does mean the situation isn't quite as one-sided as Sesame is making it out to be in their filing.
Even if that's true, these types of business deals, which are negotiated and drafted by people who have done many of these types of deals before, are normally cut and dry what happens and who pays what if the investment loses money.
Based off the way United runs its parks and treats its customers/employees they have pretty much no credibility to me. Sesame isn't just looking to get paid, they're looking to terminate the whole deal with United which is insane when you think about it (especially since its one of the biggest draws at Sea World's most profitable park).
Outside of Howl-O-Scream, I don't think United has much going for it by way of merchandising revenue outside of Sesame Street, so this would be pretty devastating for them if it goes through. But it's also not surprising from the current management style as of late, which is following the Six Flags model by bleeding the parks dry to prioritize short-term gains at the expense of customer experience and healthy partnerships. Sad to see a once-great chain fall into such a mess.
I would expect to see the Rudolph deal go through similar fallout.
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As Disney quickly learned from the Chapek debacle, this is exactly what happens when you let accountants run your business. I guess when their CEO talks about increasing efforts to work on the cost side of the equation, paying (or not paying) certain obligations is what they're talking about. United Parks needs to take a serious look in the mirror and figure out what they are and what they aspire to be, because their prideful assessment that "at least were not Six Flags" is laughable coming from a company that might be looking up at the oft-criticized chain before long and even today might be like the pot calling the kettle black.