Sesame Street Producer Sues SeaWorld Over Licensing Revenues (1)

The producer of Sesame Street claims SeaWorld Parks & Entertainment Inc. failed to fulfill their most recent licensing agreement by stiffing the iconic children’s television show out of millions of dollars in unpaid royalties.

SeaWorld’s “rogue, retaliatory actions pose an imminent threat” to Sesame Workshop’s brand, the nonprofit says in its lawsuit filed Thursday with the US District Court for the Southern District of New York. Sesame alleges SeaWorld and its parent, United Parks & Resorts Inc., breached their contract and engaged in unfair competition under New York law.

The groups’ business relationship began in 1980, when Sesame Workshop and SeaWorld’s predecessor collaborated to open the first ever standalone Sesame Street theme park, called Sesame Place Langhorne Park, near Philadelphia. The parties subsequently entered into licensing agreements in 1983, 2006, and 2017, according to the complaint.

Despite repeated collaborations over the last 45 years to open new Sesame-themed parks and attractions, the relationship began disintegrating in 2022, when SeaWorld refused to pay Sesame Workshop millions of dollars in royalties for the Langhorne Park operation, Sesame alleges.

In May 2023, an arbitration panel agreed that SeaWorld was in breach of the most recent agreement, and awarded Sesame Workshop the full amount owed. But SeaWorld didn’t pay the outstanding royalties, forcing Sesame to file a federal suit, Sesame alleges.

Though the court ordered SeaWorld in 2024 to pay the arbitration award, the company “dragged its feet in finally making payment” until Sesame filed a motion for the court to issue writs of garnishment in September of last year. But SeaWorld still has refused to pay royalties it owes to Sesame, including for the Sesame-themed Langhorne and San Diego parks, as well as Sesame Lands licensed products and licensing fees, Sesame claims.

SeaWorld also allegedly failed to pay for ending plans to open a third standalone park in violation of the 2017 agreement. It also violated that pact through its “sudden closure” of Sesame Place San Diego, Sesame says.

SeaWorld’s conduct also violates Sesame Workshop’s right to approve the use of its own intellectual property, and to SeaWorld’s “obligations to maintain the quality of its offerings,” Sesame alleges.

Sesame Workshop also takes issue with SeaWorld’s “audacious” claims that Sesame had breached the agreement, and that SeaWorld “had cause to terminate.” According to Sesame, SeaWorld claims that because the workshop’s distribution agreement with Warner Bros. to release new episodes of Sesame Street on HBO Max wasn’t renewed, it “failed to invest in its brand and its exposure and reputation had weakened.”

But “there was no consumer impact on access to Sesame Street,” the nonprofit claims.

Sesame seeks a declaratory judgment finding it didn’t breach the agreement, that SeaWorld did, and that Sesame may end the 2017 agreement.

Sesame also seeks the termination fees it says it’s owed, punitive damages, pre-judgment and post-judgment interest on all damages, and attorneys’ fees.

“We are aware of the lawsuit filed by Sesame Workshop and look forward to setting the record straight in court,” said a United Parks spokesperson in a statement provided to Bloomberg Law.

The spokesperson added that United Parks is preparing to welcome guests to its Sesame Place parks in Langhorne and San Diego this month, and that the company is looking forward to a “great year” at the facilities.

Kirkland & Ellis LLP represents Sesame Workshop.

The case is Sesame Workshop v. SeaWorld Parks & Entertainment Inc., S.D.N.Y., No. 1:26-cv-02047, complaint filed 3/12/26.