A new lawsuit could mean major changes to the popular Sesame Place theme park in Middletown Township.
Last week, Sesame Workshop, the nonprofit organization behind “Sesame Street,” filed a federal lawsuit against SeaWorld Parks and Entertainment that alleges the theme park operator has engaged in a “unilateral retaliation campaign” and refused to pay millions of dollars in royalties.
The complaint was filed in the U.S. District Court for the Southern District of New York and seeks to terminate the 45-year licensing partnership that has seen the opening of standalone Sesame Place theme parks and various “Sesame Street” attractions across the country.
According to the filing, the relationship began to deteriorate in 2022 when SeaWorld, which is now operating as United Parks and Resorts Inc., allegedly failed to pay millions in royalties for Sesame Place in Middletown Township.
After an arbitration award in favor of Sesame Workshop, the nonprofit alleges it was forced to seek federal court intervention and eventually writs of garnishment to obtain the owed money, which was finally paid in October 2025, according to the lawsuit.
The lawsuit characterizes SeaWorld’s actions as “rogue” and “retaliatory.” It adds that the dispute will “pose an imminent threat to Sesame Workshop’s brand.”
“SeaWorld stopped fulfilling its obligations under the Agreement, and ignored the Agreement in a manifestly high-handed way,” the complaint stated.
The nonprofit alleges that since last September, SeaWorld has stopped paying royalties for its standalone parks and themed lands, including Sesame Place San Diego.
Sesame Workshop said SeaWorld earns “significant revenue” from the Sesame Place parks and related attractions.
The lawsuit also claims SeaWorld abruptly closed Sesame Place San Diego in September 2025 with only one week’s notice to the public and no prior notification to Sesame Workshop.
The nonprofit said the for-profit theme park operator reneged on a contractual promise to open a third standalone Sesame Place theme park.
(Credit: Sesame Place)SeaWorld allegedly distributed “dozens” of marketing materials using Sesame Workshop’s intellectual property without required approvals.
In addition, Sesame Workshop claims SeaWorld staff locked their team out of shared social media approval documents and project trackers.
SeaWorld attempted to justify its actions in a September 2025 letter, claiming Sesame Workshop breached their agreement by failing to invest in the brand after a distribution deal with HBO Max ended.
Sesame Workshop called that claim “preposterous,” noting it recently secured a global distribution deal with Netflix that reaches over 325 million subscribers.
The lawsuit came after a mediation attempt last Thursday, which failed to reach a resolution.
Sesame Workshop is seeking a judicial declaration that the agreement is terminated, as well as monetary damages for unpaid royalties, termination fees, and punitive damages under New York state unfair competition law.
“We are aware of the lawsuit filed by Sesame Workshop and look forward to setting the record straight in court. In the meantime, we welcomed guests to the opening of our Sesame Place park in Langhorne, Pennsylvania on Saturday, March 14, and will welcome guests to the opening of Sesame Place San Diego in Chula Vista, California, on Friday, March 27,” said United Parks and Resorts Vice President of Communications AnneMarie Iturrizaga.
“United Parks and Resorts (formerly SeaWorld) 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. SeaWorld’s actions have harmed Sesame Workshop, wrongfully withholding royalty payments that are vital to supporting our charitable mission and undermining our ability to oversee SeaWorld’s use of our beloved characters and brand. While we did not want to end a partnership that has spanned 45 years, we have regrettably determined that the termination of our agreement is the only path forward,” a Sesame Workshop spokesperson said.
Sesame Place opened in Middletown Township in summer 1980. It has operated over the decades since and often packs its 14-acre site with customers in the warmer months and during the holidays.
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