Sesame Place Lawsuit Over Royalties and the Park’s Future

Sesame Workshop, the nonprofit behind Sesame Street, filed a federal lawsuit on March 12, 2026 seeking to end its 45-year licensing partnership with SeaWorld’s parent company, United Parks & Resorts. The Sesame Place lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses SeaWorld of withholding millions in royalties, using Sesame Street characters in marketing without approval, and damaging the brand through abrupt park closures.¹² The Bucks County, Pennsylvania park opened its 2026 season on March 14 and remains operating for now, but a court order terminating the license would strip it of the right to use Sesame Street characters and theming.³

What Sesame Workshop Is Alleging

The 30-page complaint, filed as Sesame Workshop v. SeaWorld Parks & Entertainment, Inc., Case No. 1:26-cv-02047, lays out several categories of alleged contract breaches.¹

Failure to pay millions in required royalties and licensing fees, withholding royalty reports, and refusing to pay amounts owed for canceled or closed attractions.
Distribution of dozens of marketing materials using Sesame Street characters without obtaining the required approvals.
Cutting Sesame Workshop off from shared project trackers and social media approval documents, undermining the nonprofit’s ability to manage its own brand.
Abruptly shifting Sesame Place San Diego to seasonal operations with six days’ notice in September 2025, removing a Sesame Street-branded area at SeaWorld San Antonio, and abandoning plans for a third standalone Sesame Place.
Retaliation for Sesame Workshop’s decision to pursue earlier royalty arbitration.

Sesame Workshop is asking the court to declare that SeaWorld breached the agreement, permit termination of the deal, and award unpaid royalties, termination fees, punitive damages under New York’s unfair competition law, plus interest and attorneys’ fees. The two sides exchanged breach notices in November 2025, held discussions in January 2026, and entered mediation on March 12, 2026. When mediation failed, Sesame Workshop filed suit the same day.⁴

The Earlier Royalty Fight

The 2026 lawsuit is the second round of legal fighting between the two organizations. SeaWorld has been the exclusive U.S. theme park licensee for Sesame Street since the early 1980s, with a 2017 deal extending the partnership through at least December 31, 2031.²⁵

According to court records, SeaWorld stopped paying royalties owed for the Sesame Place Langhorne park beginning in 2022.² Sesame Workshop took the dispute to arbitration and won in 2023. When SeaWorld declined to pay, Sesame Workshop went to federal court, and in September 2024 U.S. District Judge Paul G. Byron ordered SeaWorld to pay approximately $9.7 million in base licensing fees, $60,000 in arbitration costs, and roughly $1.7 million in prejudgment interest at 9 percent annually dating back to January 2022. The total came to over $11 million. SeaWorld argued Sesame Workshop had tried to exploit the pandemic to extract concessions; the court rejected that argument.⁶

Even after the ruling, collection took another year. Sesame Workshop filed for writs of garnishment in September 2025, and payment did not arrive until October 2025.⁷ Sesame Workshop says SeaWorld then resumed withholding royalties, which set the stage for the current case.¹

What SeaWorld Says

United Parks & Resorts denies the allegations. In September 2025, SeaWorld accused Sesame Workshop of breaching the licensing agreement itself by “failing to invest in the brand’s exposure,” pointing to the end of the deal that put new Sesame Street episodes on HBO Max. Sesame Workshop called that accusation “a thinly veiled pretext” designed to justify SeaWorld’s own refusal to pay.⁸ The HBO contract, which had paid Sesame Workshop between $30 million and $35 million annually since 2015, was ended by Warner Bros. Discovery as the company pulled back from children’s content. Sesame Workshop signed a lower-value deal with Netflix in May 2025 and returned new episodes to PBS.⁹

SeaWorld has not filed a formal counterclaim in the new case. A United Parks spokesperson, AnneMarie Iturrizaga, said the company is “aware of the lawsuit filed by Sesame Workshop and look forward to setting the record straight in court.”²

What This Means for Sesame Place in Bucks County

The 14-acre park in Middletown Township has operated since the summer of 1980. Its 2026 season opened on March 14 and continues on schedule.³¹⁰

The risk is downstream. If a judge grants Sesame Workshop’s request to terminate the licensing agreement, the park would lose the right to use Sesame Street characters, branding, and theming. Sesame Workshop itself acknowledged in the complaint that losing the park would “tarnish its reputation” and “disappoint children and families.”¹⁰ Sesame Workshop has said “termination of our agreement is the only path forward.”³ The case is still in its early stages in Manhattan federal court, so any change to the park’s operations would be well down the road.

The Other Sesame-Branded Parks

Sesame Place San Diego, which opened in March 2022 in Chula Vista after being converted from the former Aquatica water park, is at the center of one of the lawsuit’s key allegations.¹¹ On September 15, 2025, the park announced it was switching to seasonal operations effective immediately, with its final day of the year set for September 21. That gave visitors and season passholders six days’ notice, and the park’s Halloween and Christmas events were canceled outright.¹² Season passholders were offered complimentary admission to SeaWorld San Diego as compensation.¹³ Reports indicated the park had been losing money outside the water park season. The San Diego park is scheduled to reopen on its seasonal calendar on March 27, 2026.¹

SeaWorld Orlando’s Sesame Street Land and daily parade are unaffected so far. A park spokesperson confirmed in March 2026 there are “no changes to the guest experience.”¹⁴

A Note on the 2022 Discrimination Case

Searches for “Sesame Place lawsuit” also surface a separate case that is not part of the current royalty dispute. After a viral July 2022 video appeared to show a costumed Rosita performer waving off two young Black girls at the Bucks County park, a class-action suit was filed alleging racial discrimination in violation of Section 1981 of the Civil Rights Act.¹⁵¹⁶ A federal jury in Philadelphia unanimously found SeaWorld not liable on September 18, 2024, answering “no” to all 20 questions on whether the defendants had engaged in racial discrimination.¹⁷ The case is closed, unrelated to the current licensing lawsuit, and has no bearing on whether the park continues operating under the Sesame Street brand.

1
Theme Park Insider. Sesame Workshop Sues To End SeaWorld Agreement
2
WESH. SeaWorld Refused To Pay Sesame Workshop Millions In Royalties, Lawsuit Says
3
Levittown Now. Future Of Sesame Place In Doubt After Lawsuit
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WGAL. Sesame Workshop Lawsuit Could Threaten Future Of Sesame Place In PA
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Sesame Workshop. SeaWorld Entertainment and Sesame Workshop Announce Expanded Partnership
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Florida Politics. Judge Orders SeaWorld To Pay Sesame Workshop Millions Of Dollars
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ClickOrlando. Lawsuit Seeks To End Sesame Street-SeaWorld Agreement Over Brazen Contract Breaches
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Philadelphia Inquirer. The Future Of Sesame Place Near Philadelphia Is In Doubt After A Lawsuit
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New York Times. Sesame Street Is Moving To Netflix And Returning To PBS
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Phillyburbs. Is Sesame Place Closing? What To Know About The SeaWorld Lawsuit
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Theme Park Insider. Sesame Place San Diego Opens
12
Attractions Magazine. Sesame Place San Diego Switches To Seasonal Operations
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Theme Park Insider. Sesame Place San Diego Closes Early
14
Fox 35 Orlando. SeaWorld Sesame Street Lawsuit
15
NBC News. Sesame Place Found Not Liable In Racism Allegations
16
Civil Rights Litigation Clearinghouse. Burns v. SeaWorld Parks & Entertainment, Inc.
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6ABC. Jury Finds Sesame Place Not Liable In Discrimination Lawsuit