As soon as the news popped up in our inbox, we shot out a couple of queries to industry observers to get their take on the deal. First up was the ubiquitous, loquacious and perspicacious Wedbush Morgan analyst Michael Pachter. Here's what his initial reaction was to the press release, published with his permission:

It's a great deal, at any price.

They had the rights to the ancillary books (ghost written and co-created with Clancy), but didn't have rights to Clancy-authored titles or to movie titles. They now have the rights to both, and the term is expanded to perpetuity instead of 15 years (was going to expire at end of 2013). This means that if Clancy comes up with anything that works, they have the rights. Also, they were paying a small royalty (I think it was 1-2 percent of sales) on the games, and that is going away, so they should have incremental profits going forward. The press release says operating profit contribution of 5 million Euros per year, and Clancy sales were likely around 250 million Euros annually [$386 million U.S. dollars], so the 2 percent royalty figure is probably closer to the mark.

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My guess is that they used the overvalued Euro to buy these rights for around $100 million.

Recalling that Ubisoft had previously announced plans to open a digital animation studio in Montreal, we followed up with Pachter to see if he thought there were any similarities between the Ubisoft-Clancy deal and how comic book companies like Marvel, DC Comics and Dark Horse Comics were approaching Hollywood. He replied:

I suppose ultimately it will be the same. I doubt that they will produce films at the outset. Instead expect them to license the way Marvel did in the past, then maybe migrate to production many years from now.

After Ubisoft's conference call, wherein CEO Yves Guillemot added some further color to the deal, Pachter wrote us back with some additional thoughts:

It looks like the total purchase price is around 60 million Euros cash [$93 million U.S. dollars] over three years, 20 million Euros earn-out [$31 million U.S. dollars], so total is around $128 million at current exchange rates. The immediate benefit is 5 million Euros [$7.7 million U.S. dollars] in operating profit enhancement, and I would guess that royalties from books and other merchandise are around 1-2 million Euros [$1.6-$3.2 million U.S. dollars] a year now. They have the opportunity to exploit this and grow it into a real business, and that’s where the upside lies. The initial purchase price is therefore around 10x what they will see in immediate profits, so it’s a reasonable price to pay.

We also exchanged a couple of emails with videogame agent Keith Boesky, whose acerbic observations about the videogame industry can be found at his A Tree Falling In the Forest blog. His reaction was as follows:

Ubi has done an amazing job building the brand and they are clearly cementing the future. The expanded rights allow them to ensure to ensure consistency of timing and quality across all media. Definitely a great investment.

Since his Boesky & Company represents the Ludlum estate, which holds the rights to Robert Ludlum's various novels and intellectual property, including the Jason Bourne series of books, we asked Boesky whether he saw any similarities between Ubisoft's deal with Tom Clancy and what the Ludlum estate has done. He answered:

I am the videogame agent for the estate.  Henry Morrison represents the literary rights and ICM represents film and television.

Vivendi only has rights to games.