EA To Get Exclusive NFL Player Rights?
Thanks to GameSpot for its news story reporting that EA may be on the verge of an exclusive contract for NFL football player likenesses. According to the piece, which quotes a Sports Business Journal article: "Electronic Arts is in final negotiations with Players Inc., the NFL Players' Association marketing arm, to exclusively license all NFL player rights for the next four years. The Journal set the price tag of the deal at $250 million each year, which EA would pay Players Inc.; in other words, a literal billion-dollar contract." The story goes on to note: "If that turns out to be the case, no non-EA Sports game could license NFL player likenesses--an almost certainly fatal blow to the Madden series' rivals." Update: 05/19 21:07 GMT by S : It seems the linked article has been retracted: "When contacted by GameSpot, NFLPA executives said that not only was the story false, but The Sports Business Journal has since run a retraction."
Can this really be profitable?
Madden is already the biggest selling NFL title. Even assuming that this manages to persuade every single current purchaser of a non-EA NFL game to switch, and furthermore that none of those customers currently buy the EA game as well, that can't be close to $250M a year.
The top selling PS2 game of an average month (from NPD released stats, not including the big December) seems to only take in about $20M, and both EB and EA will want at least some slice of that too.
"I Know You Are But What Am I?"
I don't think this is true. If exclusive rights, such as these, were going to be made available, it would be in the NFL's greatest interest to entertain all possible bids. With their Disney roots, the ESPN line of football games certainly could afford it.
If the deal is legit and EA is awarded exclusive rights, without competitive bidding, I imagine EA's rivals will come together and file a class-action lawsuit against the NFL. Awarded damages could be huge (revenues for the games and costs of production). As I see it, EA's rivals could sit on their hands and wait for it to happen and recoup their annual earnings without doing any work.
I don't think you do something like this for profitability. If EA is pursuing this, they are doing it to force everyone else out of the football game market. Four years is enough time for everyone else to watch their sales decline and decide that the 2008 version of ESPN Football or whatnot aren't worth it, and give EA the total market. As for Disney jumping into a bidding war for the rights, I would think that with all the troubles with Eisner they could care less about the sales of a football video game. They might have the money, but they've got so much other stuff to worry about (and stuff that's more critical to their bottom line), I can't see them believing this warrants attention. EA on the other hand, is solely a game company, and to that extent, it makes sense they would shell out that kind of money for something like this.
The only thing I hate more than hypocrites are people who hate hypocrites.
EA's competitors will go after the NFL and the player's association on the basis of the NFL unfairly using its Monopoloy. Have you ever heard at the end of a televised NFL game that "this broadcast is copyrighted by the NFL. Pictures, vidoes, and descriptions of this game my not be rebroadcast blah blah blah without written permission from the NFL". As far as I understand it, this applies even to the evening news stations. Imagine if FOX got an exclusive deal with the NFL to be the only broadcaster to be able to show video clips from the game. Every other televised news program and sports program would be in serious jeapordy with a segment of their customers. Here is where it gets interesting: The NFL (and NBA and Major League Baseball by the way) are given limited monopolies in the US by Congress. That monopoly power is powerful good for making money, but it also gives the leagues special responsibilities. If anyone or any other company thinks the NFL is abusing its monopoly power, then they can sue. Everytime the league gets sued it risks earning the ire and scrutinty of Congress which could revoke its monopoly license - imagine each team owener actually having to compete in the market place instead of being able to work closely together to set prices blah blah blah; the players union would run prices through the sky. Anyhow, for an example of the monopoly being tested in court read about the Maurice Clarett case. In a nut, if this deal goes through the other game manufacturers can sue that the NFL's monopoloy is unfairly hurting their businesses.
[[See Your Ad Here. Cheap]]
I remember that 5-10 years ago, almost no games used licenses from any of the major sports associations. Somethimes they had completely fictious names, sometimes they just changed them around enough to avoid legal trouble. You don't need an official license to make a sports game, the license only covers the names and looks, not the game rules. Therefore the competition would have to fall back on the old way of making up names. That would not mean they couldn't develop the gameplay mechanics and once EA's license expires they can get their licenses back and continue using the real names.
I don't know how the casual gamer will react to that, whether they play the games just because they have the official names or whether they care about gameplay instead. Also, I'm not sure they'll figure out that those games don't use a license until they bought it and play it and at that point they can start appreciating the gameplay.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
From what I googled:
Madden 2k3 was the #4 best selling console game in 2003 -- selling 2.6m units for the PS2 alone. (~$130m USD)
Madden 2k2 was the #6 best selling game in 2003 -- selling 1.99m units (~$97m USD)
Madden 2k1 was the #33 best selling console game -- selling a respectable 900k units (~$46m USD)
Madden 2k3 for the XBoX is way down at #76 with 490k units (~$22m USD)
Madden 2k2 for the XBox is clinging to #96 with 411k units (~$19m USD)
So the Madden franchise brought in ~$314m USD in 2003 on the consoles alone. EA also has the NFL Blitz and NFL Street franchises which also require likeness rights' licensing.
Also keep in mind retailers don't typically make much profit (if any) off video game sales. (the publisher/distribution/storefront business is more hackneyed and assinine than film distribution) -- So nearly all of the revenue goes right back to EA, who as we all know, puts very little development money back into its minute incremental gameplay updates for each season. However, it's marketing budget is likely quite sizeable for the industry.
The shocking part of this is that EA can afford this contract. But will it be worth squeezing out their competitors?
Sega NFL 2k3 sold only 600k units (~$16m), and MS Fever 2k2 sold only 500k units (~$25m)
Is a potential increase of $40m worth spending $250m to get?
(granted we don't know what the current fees are for non-exclusive likeness rights -- but I have to assume exclusivity adds more than $40m to the price)
// "Can't clowns and pirates just -try- to get along?"
Well, I can't blame EA for trying to get this deal, since anybody in their position would do the same thing. However, I'd be extremely pissed off with the Players' Association for going through. In fact, I'm pissed off at the fact that they're even in talks of an exclusivity deal for multiple reasons.
The first, and biggest reason for me, is consumer choice. That's pretty obvious; with this deal nobody really gets to keep Madden on its toes. With this deal, they'd get to take a bit of a breather and not have to improve their product nearly as much. No competition, no worries.
The second reason is that an exclusive deal might knock out a player to license themselves out to another game. If this does turn out to be a part of the deal, then you'd really have to wonder how much the NFLPA is really representing the players. Remember, they also really kissed up to Congress during the steroid hearings as well; telling them that they were fully supportive of mandatory testing, including testing being made mandatory by law. Even though I wouldn't mind mandatory testing from the league and not by law, I'm hard pressed to find how the NFLPA could really be representing their players when something like being pro-steroid testing is far from being general consensus amongst the players; considering the privacy concerms (smaller factor) and the number of players on the juice (larger factor). Anyways, I also wonder how much of this deal is going to the union bosses and better players. This could very well be a case where the smaller players end up getting stiffed from within the union that's supposedly representing them.
Another thing to point out is that not everybody is necessarily represented through collective bargaining. Generally this isn't much of a problem considering that NFL players don't reach the level of stardom as, say, an NBA player. However, you still could see a situation similar to ones that have happened with Shaquille O'Neal and Michael Jordan; where their likenesses weren't allowed to be in certain games. If there was such an exclusivity deal, you might see a few stars pull out of the collective bargaining agreement to have their own game.
Until Slashdot fixes the funny modifier, use insightful or interesting. The poster knows your intentions.
Now all of the other sports games will have to switch from the NFL...to something better.
I can't wait for "XFL 2005 - He Hate Me" to appear on the Gamecube.
If moderation could change anything, it would be illegal.
"If that turns out to be the case, no non-EA Sports game could license NFL player likenesses--an almost certainly fatal blow to the Madden series' rivals."
This is an interesting move by EA. It makes sense for them to put their rivals out of the NFL simulation game business. With Madden 2004, in my opinion EA took a step back by making the game more realistic yet less fun. The story as I heard it goes, John Madden was watching his son play Madden Football on the Playstation and his Son converted a 4th and 28. When he told his son "hey that was nice" he Son replied back, "Uhh no I do it all the time". To which John Madden replied, "Well that isn't right". He complained about it, and in Madden 2004 they hard coded in the percentages that a play should fail based on the NFL percentages from the year before (ie, 4th down tries only succeed about 21% of the time). While this makes for a fun football simulation, it's not really dependant on the players skill so to me it's not fun knowing I'm winning or losing based on a virtual coin toss rather than my own skill.
The point of this story was this, while EA may lock up the players rights to fight off it's competitors, there is still money to be made with sports games. There were plenty of games that were very good that weren't licenced by the NBA or NFL players associations. They can often licence one players name for the game such as Joe Montana's football for Sega way back when. Joe Montana's football was great for it's time, and had no basis in reality (games would end with Arena football scores like 71-68) yet many gamers I know look back at it fondly. Another example of a game without a licence succeeding is hoops for the original NES. Blades of Steel didn't have a licence but more people remember that game than the old NHL hockey games.
Overall this could be a big winner for EA, but it could also lead to more innovative games for the sports genre as rival companies try to find a different solution.
Hopefully this will lead someone, anyone to bring back the MUTANT LEAGUE series of sports games, or a knock of of said games. Those were the best sports games ever in my opinion.
From Gamespot:
After a well-respected sports-industry magazine reports the sports-licensing deal of the century is in the works, NFLPA reps say the story has been retracted.
Two weeks ago, The Sports Business Journal, one of the most respected trade journals of the athletic entertainment business, revealed the identity of Madden NFL 2005 cover athlete Ray Lewis several days before EA Sports announced it.
Now it appears they may have broken one of the biggest rumors in the game industry's history.
The May 3 issue of the Journal contained a story with the headline "EA set to pay Players Inc. $1 billion." According to the article, Electronic Arts is in final negotiations with Players Inc., the NFL Players' Association marketing arm, to exclusively license all NFL player rights for the next four years. The Journal set the price tag of the deal at $250 million each year, which EA would pay Players Inc.; in other words, a literal billion-dollar contract.
Given the large sums reportedly at stake, the exclusivity of the EA/NLFPA deal would have been almost certainly strict. If such a deal were ever done, no non-EA Sports game could license NFL player likenesses--an almost certainly fatal blow to the Madden series' rivals, such as ESPN NFL Football.
When provided with excerpts from the article by GameSpot, EA Sports representatives promised to pass them along to "someone who can answer your questions." As of press time, no official confirmation or denial of the EA/NLFPA negotiations had been given by EA. However, off the record, one source close to the company called the story "way off."
While the The Sports Business Journal broke the story, it was, ironically, reprinted in the magazine ESPN. This prompted a moderator at ESPNvideogames.com to call the NFLPA. According to the moderator, NFLPA reps denied that anything other than "normal" licensing deals were in play.
When contacted by GameSpot, NFLPA executives said that not only was the story false, but that The Sports Business Journal has since run a retraction--something that will undoubtedly make fans of the ESPN NFL franchise breathe much easier.
By Tor Thorsen -- GameSpot
Link
http://www.gamespot.com/gba/sports/maddennfl2005/n ews_6098784.html
Great! The Madden franchise will be the Microsoft Office of sports games.
No more variety. No competition to make the games any better than they already are. Just updated stadiums and rosters.
Most people aren't balking about it now because the majority like Madden. Let's see what happens in 3 years.
Alas, NFL 2Kx / ESPN Football I knew and loved thee well.
Political correctness is the newest form of slavery.
Yes, in the heady days of 10 yard fight, and baseball simulator 1000, there were no team names, or player names, and it was fine.
But graphics then were terrible. You had no expectation that sprite A would look or behave like Jerry Rice.
Now however, when we can watch the Wide receivers eyes track the ball before he catches it on an instant replay, things like getting accurate names/team names matter greatly.
I've always been a fan of the game competing with madden, most recently ESPN/NFL2x, but if this deal goes through, the only other football games we'll see will be akin to NFL blitz. No company will invest the resources in a simulation without naming rights.
This is anti-competitive, but that's been EA's style all along. Can't compete with Command and conquer? Buy Westwood.
At least EA realizes that their utter marketplace ownership of video-football is not due to a superior product, and they need to somehow bolster their stance. Improve the game? Nah, why not just put sega/microsoft/989 out of the sports business.
"Inattention makes clowns of us all" -Bean
This sounds like the "boardwalk" of the sports games monopolies to me. Is it coicidence that in the span of two months, the smaller sports video games franchises - Microsoft's and Sony's - are canned for a year? Was that "Park Place"? Then, in the same two months, EA's trying to get exclusive on the likenesses? I doubt that Sega or Midway or Microsoft and Sony's sports games ever posed any kind of challenge singularly, but collectively formed a competitor that took a considerable chunk out of EA's potential profits. Sounds to me like EA is trying to exterminate the swarm of small annoying bugs at the same time.
If I were any other video game publisher besides EA I would be up in arms, even if they were little insect-y fly arms, and I'm including the first party publishers. EA is, perhaps, more powerful than Microsoft, Nintendo, and even Sony.
Of course, the ones with the real power here are consumers. Frankly, as gamers we should perhaps be more worried about this than the publishers who are probably in no position financially to challenge EA, or politically if it's the console makers. This won't happen, because we lack a cohesive voice. The gaming media is as much a part of the machine as the publishing houses themselves. So, I imagine Madden 200X will be the only football game on the shelves for the next twenty years until EA gets lazy and careless.
Of course, they are just games. -shrug-
How ea always manges to get rid of the competition by the quality of their products! :-(
This story broke two weeks before E3, and it was almost immediately proved to be a hoax. The guy that submitted the story said something along the lines of "I jumped the gun a bit", and at E3, the NBA was in talks with all the other companies, business as usual, nothing to see here....
The gaming media is almost as bad as the general media.
I don't think it would be a death blow for Sega to not have player likenesses. I love the NCAA college football games and there everyone is referred to by number. I know that David Greene is 14, I know that Fred Gibson is 82, and I know that big badass David Pollack is 47.
Also in Madden's own games, the historic teams have numbers instead of names. I know that if I pick the 1979 Cowboys, I'm handing tha ball off to 33 (Tony) whenever possible and I like to blitz with 56 (Hollywood Henderson). I would like to see that guy in the hat every now and then on the sidelines, but I guess you can't get everything you want. At least 70's Cowboys are wearing their powder blues as of 2001.
Even if it is a death blow to Sega's NFL line, if Sega keeps concentrating on the college game they can still make a competitive NFL game in 2008 based off of their college engine. EA won't be able to afford that exclusive contract forever.
The only other NFL line I'm aware of who isn't halting production (Microsoft and 989 are halting) is Midway and I wouldn't go so far as to call Blitz an NFL game. It's an Arena Football game with NFL rosters. Midway could embrace what their game really is and use Arena players. I'd love to fill the shoes of Danny White or get to sack Tony Grazziani when I'm playing defense.
Most, if not all, of the games now allow you to create your own player...so I'd give it about...oh...4.5 minutes before someone with too much time on their hands would have used that utility to build the "New England Patriots Roster", which would be available for download on one of the 40,000,000 fan sites out there.
Yeah, you wouldn't get to hear Pat Summerall and John Madden saying "Adam Vinitieri kicks the Field Goal", but really, doesn't everyone turn off those comments after about 20 times through anyhow?
I'd like to see a game that used a decent phonetic text to speech algorythym so that instead of having to hear "Number 10, up the middle" after I create my fantasy running back, I could hear "Gorm, up the middle". Now *that* would be worth buying.
The Sports Business Journal, the magazine that originally broke the story has issued a retraction for the story saying that it is not true. Gamespot.com spoke with a representative from the NFL Players Association (NFLPA) and they confirmed that the story was false and no such talks have ever taken place. Go to the gamespot link in the original post again to read the update.
-Over 50% of the population is below average.
http://www.gamespot.com/xbox/driving/nascar2004/ne ws_6075962.html
I wouldn't be surprised if EA did try this; they already have an exclusive deal with NASCAR. It's unfortunate, as the Papyrus NASCAR Racing series has generally been rated better than EA's offerings.