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 Update: 05/19 21:07 GMT by S : It seems the linked article has been retracted: "When contacted by GameSpot, NFLPA executives said that not only was the story false, but The Sports Business Journal has since run a retraction."

Comments

Thats a real Shedload of cash.

[iainl]

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.

Re:Thats a real Shedload of cash.

[Divide By Zero]

$250M/year for four years will effectively shut down every other NFL game for four years, but that's not the kicker. The kicker is after those four years, if EA chooses not to keep their agreement "exclusive", any other football game (ESPN NFL Football, etc.) will be four years behind, at a minimum. I would guess that the more likely scenario would be that the project teams would be dissolved, and that EA would snap up any talent laid off by Sega, Microsoft, and whomever else. That -really- puts Madden in the driver's seat, with a four-year jump on everyone else from a software/technology standpoint, and any potential competitor having to start from scratch from a personnel standpoint.

It's almost anticompetitive in nature. EA (the 800-kg gorilla) is getting exclusive rights to a commodity (NFLPA licensing rights) that's almost necessary to compete in the market, and has been available to all competing parties until now. What'd happen if GM were to get exclusive rights to anti-lock braking or airbags? What if Nokia were the only company offering car chargers or customizable ringtones?

They drop a billion short-term in exchange for a major leg-up on the competition long-term, with the hopes of driving said competition out of business. No competition means they can cut costs and turn a bigger per-unit profit. Not only that, they can basically ditch their promotions and advertising. Tell me that being the only game in town when it comes to football games in the US isn't worth big money.

Re:Thats a real Shedload of cash.

[musikit]

And why exactly do we care if they get the likeness?

how will this ruin the market for football games?

i see this as a bad maneuver for EA. frankly i stopped playing sports games cause the action was too slow and there was a 2-3 minute gap between plays where you watch the models hit each other and dance. now that EA is buying the likeness they are telling their purchasers that they are concentrating on this part of the game. hello what about UI? game play? is it fun to play? i see this as an opening for the other games to get back more into football strategy and controls of the game/players/plays.

frankly when i'm looking at the overhead view of a football game/play i don't really care what the models look like as long as i know what each player is responsible for. sh*t they could be Xs and Os for all i care with numbers over their head.

so the end result of the football gaming will be.

EA = slow/boring game where you watch models dance.
Madden = stategic football simulation.

frankly i don't see madden losing out.

Possible Lawsuit on the Horizon

[humpTdance]

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.

Going for the kill

[EddieBurkett]

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.

You don't need a license.

[KDR_11k]

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.

Shitty, Yet Doable

[illuminata]

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.