Madden 12 News Post

EA/NFL Extend NFL Exclusive License by One Year to 2013

07:10 PM - February 14, 2011 by RaychelSnr

The Sports Business Journal is reporting that the NFL and EA have come to terms on extending the current exclusive deal one more year with the uncertainty surrounding the 2011 NFL Season.

Quote:


	"The NFL has restructured its lucrative licensing and sponsorship contract with Electronic Arts to account for the sport�s uncertain future, significantly reducing the video game maker�s contractual obligations next season but adding a year to the deal, according to several well-placed sources. The contract now runs through 2013. The league is believed to have so far rebuffed pleas for fee reductions from other licensees and sponsors, many of which, like EA, find it difficult planning for the next season under the threat of a work stoppage. The league�s collective-bargaining agreement with the players expires March 4, and the two sides are far apart on reaching a deal. EA, however, is a special case, with its iconic �Madden� video game title. The licensing deal it agreed to with the league in early 2008 is believed to be worth well into nine figures in guarantees and royalties over its original five-year term. That stands as one of the most, if not the most lucrative non-TV contract the NFL enjoys. The NFL Players Association, which signed a companion EA deal for rights to the players, reaps regularly between $30 million and $40 million annually, according to the union�s annual filings with the Labor Department. The league deal allows EA to use team colors, names and logos."

This basically means that EA has exclusive rights to Madden now until after Madden NFL 14 -- or roughly right about the time the next generation of consoles are set to hit.

This just shows how strong of business partners the NFL and EA Sports are at this point. The NFL is giving EA a break on payments this year and has basically given them an additional year as a make-up of sorts to make right. Also, if you read my 2011 Predictions Post back in January, you saw this was my first prediction, that the deal would be extended in some way this year.

So in that respect, this news is not unexpected -- and with the deal stretching into the next console generation, I have serious doubts any other company is going to be in a position enter the market anytime soon due to the extreme cost of entry into quality sports game development that will be present at that time.

Thanks to Pasta Padre for the news tip.

Game: Madden NFL 12Reader Score: 6.5/10 - Vote Now
Platform: PS3 / Wii / Xbox 360Votes for game: 44 - View All

Madden NFL 12 Videos

Member Comments

# 241 coogrfan @ 02/16/11 10:51 AM

Quote:

Originally Posted by LiquorLogic


	If you look at most sports titles, there's only really two popular titles at best. If EA walked away from the NFL, another publisher, or publishers, would take their place. It's inevitable. The licensing cost would drop because EA, the only company capable of paying that hefty fee, is no longer in the picture. The NFL isn't going to turn down money. If no company wants to pay for an exclusive license, but companies were willing to pay for a non-exclusive license, than the NFL will award multiple licenses like they did before. This is economics 101, supply and demand. The exclusive license is sky high right now because EA is willing to pay that price, and any company who wants that license has to outbid EA when the current deal expires. If EA decides not to pay that price anymore, the NFL isn't going to say " fine, if no one wants to pay this price, then no more NFL video game football period !" The NFL will simply lower the costs, and make it non-exclusive to make up some of the difference, which is what we all want.

A compelling argument, but I must point out that we have been without a college hoops game for a couple of years now largely because the NCAA refused to come down on it's licensing fees. It can happen.

# 242 Jackdog @ 02/16/11 10:52 AM

Quote:

Originally Posted by blackscorpion11


	excellent point, these bastards WILL go after ALL sports if left unchecked.. They are the ESPN of video gaming

It's called free market. Business 101. 2K has participated. They bastards as well? Posts like this always crack me up.

# 243 roadman @ 02/16/11 10:58 AM

Quote:

Originally Posted by LiquorLogic


	The NFL will simply lower the costs, and make it non-exclusive to make up some of the difference, which is what we all want.

This is what we want, is this what the NFL wants, though? The NFL wants a brand that everyone is familiar with. Madden fits that category.

You are putting some if's out there, that's all they are right now, if, if, if that does seem like wishful thinking.

I don't see the NFL and EA breaking up the license for a long time. Goodell and Madden are also friends, he serves as special counsel to the the NFL.

# 244 roadman @ 02/16/11 11:18 AM

Quote:

Originally Posted by EddieV


	Maybe the courts will do us a favor then in some of these lawsuits and bust it up.

That's another if and maybe in my book.

Just don't see it happening.

# 245 Jackdog @ 02/16/11 11:20 AM

Quote:

Originally Posted by EddieV


	Maybe the courts will do us a favor then in some of these lawsuits and bust it up.

I don't think it will happen GT.

# 246 Jackdog @ 02/16/11 11:22 AM

Quote:

Originally Posted by EddieV


	A certified class calls it a monopoly. We'll see who's right on that soon enough. "The class-action lawsuit against Electronic Arts, makers of the popular Madden video game franchise, may continue, ruled US District Court Judge Vaughn Walker when he certified the class-action lawsuit late in December 2010. The lawsuit alleges EA established agreements with the National Football League (NFL), The NFL Players Union, Arena Football League and the National Collegiate Athletic Association (NCAA), that drove competition out of the market and prevented new competitors from entering." http://www.suite101.com/content/madd...#ixzz1E8Nlos3u

Certified class?? LOL....OK. I wish them luck.

# 247 inc.mpire @ 02/16/11 11:28 AM

I will never ever support this move... I'm a fan of both EAsports and 2KSports but I can't respect that anyone could be ok with the fact that we can not choose between multiple Football games when there is nothing to compare to. This **** is just like wrestling which is why these companys will fold one day due to the fact that there's no competition. There can never be any improvements to this Madden game due to the fact that there is no one breathing on there necks. For us real gamers this really blows man.

# 248 ryan36 @ 02/16/11 11:34 AM

Quote:

Originally Posted by Jackdog


	Certified class?? LOL....OK. I wish them luck.

The only person I see around here who is certifiable is Jackdog.

# 249 Hendrick4life @ 02/16/11 11:36 AM

This is ridiculous. .Cant believe they are extending this contract. Other than a stupid Business move. It means they certainly cant care about their fanbase.

EA is just going to get complacent and all of asuddent release year after year of BS. OH LIKE THEY ARE DOING ALREADY!

# 250 ryan36 @ 02/16/11 11:37 AM

Quote:

Originally Posted by LiquorLogic


	Why do people keep saying this ? The NFL wants as much money as possible, and the deal with EA guarantees this regardless of Madden's sales. If the NFL could make more money with multiple licenses, they would award multiple licenses.

Exactly. The NFL has set a price point at whatever the EA license costs. For another company to get involved, it'd break them

# 251 roadman @ 02/16/11 11:40 AM

Quote:

Originally Posted by LiquorLogic


	Why do people keep saying this ? The NFL wants as much money as possible, and the deal with EA guarantees this regardless of Madden's sales. If the NFL could make more money with multiple licenses, they would award multiple licenses.

They already tried that in 2005 and it wasn't working.

An ex-EA employee was already quoted in this thread. The NFL was making less money with multiple licenses vs giving a company with exclusivity.

The NFL will opt to take the more money deal vs multiple licenses.

# 252 bkrich83 @ 02/16/11 11:44 AM

Quote:

Originally Posted by EddieV


	A certified class calls it a monopoly. We'll see who's right on that soon enough. "The class-action lawsuit against Electronic Arts, makers of the popular Madden video game franchise, may continue, ruled US District Court Judge Vaughn Walker when he certified the class-action lawsuit late in December 2010. The lawsuit alleges EA established agreements with the National Football League (NFL), The NFL Players Union, Arena Football League and the National Collegiate Athletic Association (NCAA), that drove competition out of the market and prevented new competitors from entering." http://www.suite101.com/content/madd...#ixzz1E8Nlos3u

It's not a monopoly.

While I am all for competition. Telling people who they can or can't sell their intellectual property to is a dangerous precedent IMO. If I own a company I sure don't want the government telling me how to do business or who to do business with. I am sure you wouldn't either.

That class action lawsuit has like zero traction. I would be shocked if anything comes of it.

# 253 ryan36 @ 02/16/11 11:47 AM

Quote:

Originally Posted by EddieV


	My guess is the legal uncertainties had at least something to do with the 1 year term of the extension. No reason for the NFL and EA not to do a 4 or 5 year extension otherwise. A year from now we should have a better idea of where the EA-NFL deal stands from a legal standpoint.

No you're wrong the 1 year extension has to do with a potential lockout and a lackluster year for sales.

# 254 CaptainZombie @ 02/16/11 11:49 AM

Quote:

Originally Posted by roadman


	They already tried that in 2005 and it wasn't working. An ex-EA employee was already quoted in this thread. The NFL was making less money with multiple licenses vs giving a company with exclusivity. The NFL will opt to take the more money deal vs multiple licenses.

Plus I think when 2K sold NFL2K5 for $19.99 out of the gate, didn't that really piss off the NFL? I could be wrong, but I thought they did get upset since it came off as their brand was being cheapened at $20.

# 255 coogrfan @ 02/16/11 11:49 AM

Quote:

Originally Posted by LiquorLogic


	Why wouldn't the NFL award a non-exclusive license if their were no other options ? If EA decided that they didn't want to pay for it anymore, and no one else did, then the NFL either generates no revenue from video games, awards a cheaper exclusive license, which wouldn't make any sense, or awards multiple licenses ( at a cheaper price) to make up the difference.

It's my understanding that EA is currently paying approx twice as much per year as the league used to earn from all of it's videogame licensees combined. Imo that alone pretty much rules out the NFL ever returning to a multiple licensee setup. If EA were to decide at some point in the future that 200% is simply too much, it's likely that the league would counter by offering exclusivity at a reduced rate.

# 256 bkrich83 @ 02/16/11 11:50 AM

Quote:

Originally Posted by EddieV


	My guess is the legal uncertainties had at least something to do with the 1 year term of the extension. No reason for the NFL and EA not to do a 4 or 5 year extension otherwise. A year from now we should have a better idea of where the EA-NFL deal stands from a legal standpoint.

The one year deal was basically a compromise in the face of a potential NFL work stoppage.

# 257 jjsmitty34 @ 02/16/11 11:52 AM

I would just like them to make madden for the PC again. Thats all, come on EA make it happen.

# 258 bkrich83 @ 02/16/11 11:52 AM

Quote:

Originally Posted by EddieV


	Actually, if you call surviving EA's motion to dismiss, and defeating EA's attempt to prevent a class from being certified, a success -- then I'd say it does have traction. Our courts are just slow moving...give it a bit more time and it will be in the news again.

That really means little. Is their precedent for this?

I get the desire for people to want this to happen. But believing in these lawsuits amounts to little more than wishful thinking.

# 259 coogrfan @ 02/16/11 11:55 AM

Quote:

Originally Posted by CaptainZombie


	Plus I think when 2K sold NFL2K5 for $19.99 out of the gate, didn't that really piss off the NFL? I could be wrong, but I thought they did get upset since it came off as their brand was being cheapened at $20.

That, and the fact that it cut into the amount the league earned in licensing fees:

Quote:

Originally Posted by DrJones


	In the "olden days", the 3 companies paid the NFL/PA a royalty per unit sold, at roughly 10%. Let's say the total football market is about 6 million units. 6 million x $60 x 10% = $36M annually to the NFL. The current EA deal with the NFL pays them between $60M-$70M per year, regardless of units sold.

The old deals were based on sales figures, the current deal is a flat fee up front.

# 260 ryan36 @ 02/16/11 11:56 AM

Quote:

Originally Posted by EddieV


	I understand that's the perception. Why do you think EA has refused to comment or answer any questions about the extension? And, if the deal is working out so great for both sides, why didn't they re-up it for 3 or 4 years like last time? It's just my guess, but I think the uncertainties of all the pending litigation had at least something to do with it. Again, we should have some more answers on that stuff in another year.

Nah, I think the uncertainty is whether or not EA wants to re-up. A competitor would have to wait a year or two to produce a playable game. EA probably thinks they can get the license for cheaper or that they can squeak buy a couple years without it and save 140 million dollars.

« Previous 1 2…10 11 121314 15 16…21 22 Next »

More Links

EA/NFL Extend NFL Exclusive License by One Year to 2013