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The Almighty Buck Entertainment Games

EA To Get Exclusive NFL Player Rights? 57

Posted by simoniker from the wonder-borg dept.
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 Update: 05/19 21:07 GMT by S : It seems the linked article has been retracted: "When contacted by GameSpot, NFLPA executives said that not only was the story false, but The Sports Business Journal has since run a retraction."
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EA To Get Exclusive NFL Player Rights? More

EA To Get Exclusive NFL Player Rights?

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  • Thats a real Shedload of cash. (Score:5, Interesting)

    by iainl ( 136759 ) on Wednesday May 19, 2004 @07:31AM (#9194152)
    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. (Score:5, Interesting)

      by Divide By Zero ( 70303 ) on Wednesday May 19, 2004 @07:57AM (#9194373)
      $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.

      • You don't need a license. (Score:4, Interesting)

        by KDR_11k ( 778916 ) on Wednesday May 19, 2004 @08:10AM (#9194502)
        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.

        • 7-10 years ago football games sucked (Score:4, Insightful)

          by Syncdata ( 596941 ) on Wednesday May 19, 2004 @10:37AM (#9195669) Journal
          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.
        • The reason I play football games is so I can be the Steelers, not teamA with a bunch of unknowns. In fact, I can start a Madden game, and immediately know the strengths and weaknesses of my own team, along with my opponent, because I watch real football. I know players by name, who to double team, when the best time to blitz, etc... If you don't have that, you are creating a game with a HUUUGE learning curve. That will kill any competitor game.

          EA is trying to go for the monopoly in the gaming industry
        • For the purposes of comparison only

          I represent the other end of the sports game spectrum. I do not follow football, as I do not enjoy watching it in the least. I don't know who is what on which team, I couldn't tell Jerry Rice from Uncle Ben's rice. When I play a sports simulation, the first thing that I look for is the ability to make my own team, with my own created players. It could be the RPG gamer in me that refuses to die despite the fact that I really don't care for most of the highest acclaimed RPG
        • I know the article has been retracted, but the debate is still an interesting one...

          In the UK there are two main football (soccer) games - EA's and Pro-Evolution Soccer. EA's has much more extensive licenses to use real players/ grounds/ etc; and while EVERY review says Pro-Ev has better gameplay, guess which one sells more?
      • The thing is, it doesn't really.

        Firstly, there is non-NFL licensed Gridiron to be developed; college football, or just games without a license. I know no-one who would even consider buying the EA FIFA-licensed 'soccer' (as you Americans so quaintly refer to it) game when the unlicensed ISS Pro Evolution is ten times better.

        But more generally, good game coding is good game coding. I don't think, even if all non-EA Gridiron games are cancelled for the next four years, that the teams are incapable of working
      • 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

        You vastly underestimate the popularity and importance of college football.

    • Scary part is that they can afford it (Score:5, Informative)

      by *weasel ( 174362 ) on Wednesday May 19, 2004 @08:16AM (#9194535)
      From what I googled [dkvine.com]:

      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)
      • Minor nitpick: NFL Street is an EA Big title, but NFL blitz is produced by Midway. And don't forget the GC and PC Madden versions - that would bump the total up even higher.

      • Re:Scary part is that they can afford it (Score:4, Informative)

        by WebGangsta ( 717475 ) on Wednesday May 19, 2004 @09:05AM (#9194875)
        First, EA doesn't own NFL Blitz. That would be the good folks over at Midway.

        Also, to clarify a point. Let's use the Madden 2003 version as an example. According to NPD, the PS2 version of Madden 2003 was the #1 selling video game for all of 2003, yet the game was released in August 2003 (giving it just a scant 4+ months of sales compared to other titles on the list). Pretty significant for a single title on a single platform (add to it what the XB/GC/PC/etc versions pulled in as well).

        Let's backtrack a little bit: From the day it was released through the end of September, Madden NFL 2003 moved approximately 1.7 million units in the U.S. at $50 each. That would be $85m in sales just for that timeframe.

        Digging further, GameDaily said that Madden sold "3.8 million to date" [gamedaily.com], which would be around the time that Sega pulled out of the sports market a few weeks ago -- still not looking at a full year yet. 3.8m games @ $50 comes out to $190m. Extrapolate these numbers over the course of a year and I can definitely see where EA can afford to spend $250m per year on this title alone.

        disclaimer: i hope i carried the one when calculating those figures. i was never the best at math

      • FYI - MS announced they are canceling most of their sports, including Fever.

  • Possible Lawsuit on the Horizon (Score:5, Interesting)

    by humpTdance ( 666118 ) on Wednesday May 19, 2004 @07:44AM (#9194272)
    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 honestly doubt ESPN Football would be able to compete with EA's bid, don't forget that it's still published by Sega. Now that Sammy is buying Sega, I don't have much hope for their line of sports games.

      Furthermore, ESPN doesn't give a shit about their games. During football season last year, SportsCenter would use a game to demonstrate certain plays and matchups. Did they use ESPN Football? No, they used Madden.

      Also don't forget that Madden is employed by Monday Night Football, which is owned by ABC, wh

  • Going for the kill (Score:3, Interesting)

    by EddieBurkett ( 614927 ) on Wednesday May 19, 2004 @07:51AM (#9194328)
    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.

    • 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.

      Tru

  • Monopoly (Score:4, Insightful)

    by Mr_Blank ( 172031 ) on Wednesday May 19, 2004 @07:59AM (#9194391) Journal
    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]]
    • It's not the NFL - its the NFLPA, which is just a group of people. My guess would that the NFL would be against this sort of deal, as it would probably limit their ability to license team names and logos to other companies, who would stop making football games.
      • Or conversely, one of the other companies would get an exclusive deal with the NFL, and Madden would have all the player names, but different team names, and Sony would have the team names, and made up player names. Sigh, its like its the NES days all over again, when the NFL and the NFLPA (and for the rest of the major league sports as well) made separate deals with the video game companies.
    • Actually, only baseball has an antitrust exemption [wikipedia.org] from Congress. The other sports leagues don't.

  • Shitty, Yet Doable (Score:3, Interesting)

    by illuminata ( 668963 ) on Wednesday May 19, 2004 @08:18AM (#9194547) Journal
    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.
    • So is that the official word? That players lose the right to license their likeness when they join the NFLPA? Do they have to ask the association whenever they get thier photo taken? Sounds pretty restrictive to me and if so, you may be right that the association doesn't really represent the players.
      • Well...sorta...

        You join the Union (NFLPA in this case) and you automatically cede rights to your football related image to them.

        I believe (and I know for certain you can in baseball) an individual player can refuse to cede his image rights to the Union...however...he then no longer gets *any* share of the promotional money that comes from "authentic NFL products", which can be a pretty penny.

        It came up a couple of years ago when one of the "scab" football players who had played during the last strike

  • This is awesome. (Score:3, Funny)

    by Bluesman ( 104513 ) on Wednesday May 19, 2004 @08:20AM (#9194569) Homepage
    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.

    • Well, "He Hate Me" (aka Rod Smart) plays for the Carolina Panthers, so this game would be barred by the agreement also! :)
      • He might not be able to use the Rod Smart name (assuming he's covered by collective bargaining), but it's my understanding that he holds the He Hate Me trademark.

        But other than small time marketing deals, and the fact that the XFL is defunct. That won't matter.

        But, hey, f he ends up in the CFL or AFL he might be able to do something with it!
        • Let's just have a CFL game anyway, isn't it about time, it would make for a much better video game with inherent pass-first mentality of the teams... Ok Ok, I'm canadaian and just want to be able to play as my home team in a video game for once.
        • Well, if they could dig up the rights to an XFL game, 'He Hate Me' would be able to sell his likeness for such a title. The NFL Player's Union collectively bargains for likeness rights, but only as pertains to depictions within the game of NFL football.

          For example, consider that EA would have to pay seperately for, say, Bo Jackson's likeness for an MLB game, and Bo Jackson's likeness for an NFL game. Yes, likeness' rights are bargained collectively now, but i'm just trying to make a point: holding the lik

  • Interesting... (Score:3, Insightful)

    by JavaLord ( 680960 ) on Wednesday May 19, 2004 @09:19AM (#9194997) Journal
    "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.
    • The greatest hockey game ever was for the NES ... who remembers Ninentendo Hockey? Fat guys, medium guys and skinny guys ... BOOYAH! Let's bring that shit back ;)

      "My fat guy just whooped your skinny bitch ass!"
  • 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.

  • The story is bogus (Score:3, Informative)

    by Anonymous Coward on Wednesday May 19, 2004 @09:51AM (#9195243)
    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 [gamespot.com]

  • Gamespot reports the article has been retracted (Score:5, Informative)

    by yoDon ( 123073 ) on Wednesday May 19, 2004 @09:53AM (#9195266)
    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.
  • 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 poten
  • How ea always manges to get rid of the competition by the quality of their products! :-(
  • 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
    • EA won't be able to afford that exclusive contract forever.

      Yes, they can. Madden's sales alone are right now just about enough, even with Sega/Sony/MS/et al. eating away at it. If and when the exclusivity deal goes through, Madden's sales go through the roof, EA saves even more money by cutting back on engine development, and they'll have far more than enough in the coffers after three years to extend the deal for as long as they care to.

      We all assume that EA will use this as an excuse for cutting back
  • So Madden couldn't give you the default likenesses of your favorite team with the cartridge...big deal.

    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 kic

    • I'll presume you didn't actually read the article, as EA is the company that makes Madden. So, er, you WOULD be hearing John Madden saying that. Sorry.

      If EA could add Sega's commentary to Madden's games, they would be instoppable. Sigh.
      • Uhh...I presume you've never played the game...

        If you "create" a player, as opposed to just using the stock ones that they supply voiceovers of the names for, you don't get " runs up the middle", you get "Number runs up the middle".

        And since, in my scenario, EA or whoever wouldn't be supplying the player file, but it would be an independantly created thing, you wouldn't get player names.

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