Video Games

Why the NCAA Cut Ties with EA Sports


A screen shot from the 2014 NCAA Football demo trailer

Courtesy EA Sports via Youtube

A screen shot from the 2014 NCAA Football demo trailer

The NCAA announced on July 17 that it will not renew its long-running licensing contract with video game maker Electronic Arts (EA). The decision arrived as the organization faces a raft of lawsuits, including one brought by former University of California at Los Angeles player Ed O’Bannon, who’s accusing the NCAA and two co-defendants, Collegiate Licensing Co. (CLC) and Electronic Arts, of profiting from his likeness. (The case awaits class action status before trial.) “We are confident in our legal position regarding the use of our trademarks in video games,” the NCAA said in a statement. “But given the current business climate and costs of litigation, we determined participating in this game is not in the best interests of the NCAA.” So EA Sports NCAA Football 14, the current iteration of the partnership, will be the last game to bear the NCAA’s name and logo.

We spoke to Gabe Feldman, director of the sports law program at Tulane University Law School, for some perspective.

So what signal is the NCAA sending by pulling out of the game?
The signals are unclear. But the practical implication is that the EA Sports game cannot use the NCAA’s name or logo. It doesn’t change anything beyond that unless Collegiate Licensing, which is essentially the licensing arm of the universities, or any of the individual schools, or EA Sports, decides to change the game. There is no indication yet that they will. The signal may simply be a recognition of the stakes of the litigation. When you have an antitrust lawsuit, the stakes are higher. It may just be that the NCAA will wait out the litigation and sacrifice the short-term revenue.

Does the decision affect its legal position, or that of Collegiate Licensing or Electronic Arts, the co-defendants in the O’Bannon lawsuit?
It likely doesn’t change their exposure. Remember, the NCAA all along only licensed the rights to its name and logo. The NCAA didn’t have the ability to give them access to athlete likenesses. CLC would also add that it does not license the athlete’s name and likeness and makes no claims to that. The NCAA’s dropping out just reduces their exposure going forward. But this is also the NCAA, at least in theory, severing its ties from this game to remove any future liability.

Aside from the obvious, what are the implications for the game itself?
The CLC certainly still has the right to license the names and marks of the schools [and Electronic Arts announced it's moving forward for College Football 15 with real teams and conferences]. The legal exposure is with the athletes’ likenesses and images. It may be, depending on how the case proceeds down the road, that EA decides to eliminate the use of realistic players from the game, and they can do that in many ways. There’s no indication they’re headed down that path. They certainly could genericize the players in the game and return to the old-school video game and play with anonymous players and real teams.

So what’s the takeaway?
I think the takeaway is that the NCAA does recognize there’s some risk. And it’s likely they’re saying they’re willing to sacrifice short-term revenue from the game to avoid long-term damages and risks from the litigation. I think the overarching issue and the reason this may be a watershed case is not because former student-athletes may be entitled to a share of revenue from the NCAA video games. It’s more about whether this case can hammer away at the NCAA’s amateurism shield. We’re a long way from that, but it has the potential to do that.

You’re talking about paying college players.
Right. If they can get payments for the use of their images for television, that will serve as a form of compensation.

So in the grand scheme, where do you put yesterday’s move on the part of the NCAA?
If this were a game of chess, this is the movement of a pawn. This is certainly not checkmate.

Mayo is an associate editor for Bloomberg Businessweek.

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