SeaWorld sued for mishandling 'Sesame Street' brand

By Jonathan Stempel

NEW YORK, March 12 (Reuters) - Sesame Workshop, known for the iconic children's TV show "Sesame Street," sued SeaWorld on Thursday to end their decades-long relationship, accusing the theme park operator of withholding royalties and undermining the "Sesame Street" brand.

In a complaint filed in Manhattan federal court, Sesame Workshop said SeaWorld, a unit of United Parks & Resorts PRKS.N, has been its exclusive U.S. theme park licensee for 45 years, opening several "Sesame Street"-themed parks and attractions featuring characters including Big Bird, Cookie Monster and Elmo.

Sesame Workshop, however, said SeaWorld has for a few years ignored the most recent licensing agreement, which dates from 2017, including by withholding royalties and closing sites, including the temporary closure of Sesame Place San Diego.

According to the complaint, matters worsened in September when SeaWorld stopped paying royalties to Sesame Workshop altogether, and as a pretext to end the relationship made the "preposterous" accusation that the New York-based nonprofit failed to invest in its own brand.

"SeaWorld’s rogue, retaliatory actions pose an imminent threat" to Sesame Workshop by tarnishing its reputation, using its intellectual property without permission and "disappointing children and families" who hoped to visit the closed sites, the complaint said.

“United Parks & Resorts has repeatedly failed to honor its contractual obligations, leaving Sesame Workshop no choice but to pursue litigation to protect our brand and the trust that families place in it," a Sesame Workshop spokesperson said in an emailed statement.

United Parks and SeaWorld, both based in Orlando, Florida, did not immediately respond to requests for comment after market hours.

The lawsuit also seeks unspecified compensatory and punitive damages.

In September 2024, a federal judge in Orlando upheld an arbitration ruling that required SeaWorld to pay Sesame Workshop more than $11 million, including interest for breaching their licensing agreement. SeaWorld didn't pay until October 2025, Sesame Workshop said.