Madden NFL 13 News Post

$27 Million Settlement Announced in EA Madden Price-Fixing Lawsuit

09:18 PM - July 20, 2012 by Steve_OS

A proposed settlement was filed this evening in the lawsuit filed by consumers against EA regarding its exclusive license agreements with the NFL, NCAA and AFL.

Owen Good, over at Kotaku has been following along and explains it very well, right here.

The full details on the proposed settlement below. You can also download a copy of the proposed settlement, right here.

$27 Million Settlement Announced in EA Madden Price-fixing Lawsuit

SAN FRANCISCO � Attorneys representing purchasers of Electronic Arts, Inc. (NASDAQ: ERTS) (�EA�) football video games have reached a proposed settlement over claims that the gaming giant violated antitrust and consumer protection laws and overcharged consumers for the games.

The case, originally filed June 5, 2008, in the United States District Court for the Northern District of California, alleges that EA violated antitrust and consumer protection laws by establishing exclusive license agreements with the National Football League (NFL), National Collegiate Athletic Association (NCAA), and the Arena Football League (AFL). The agreements gave EA the exclusive right to produce football video games with the teams, players and other assets of the NFL, AFL and NCAA, the lawsuit states.

The proposed settlement, filed with the court on July 19, 2012, would establish a $27 million fund for consumers who purchased Madden NFL, NCAA Football or AFL games published by EA. If the settlement is approved by the court, consumers who purchased a sixth generation title (GameCube, PlayStation 2, and Xbox) may receive up to $6.79 per game. Those who purchased a seventh generation title (Wii, Xbox 360 and PlayStation 3) may be entitled to as much as $1.95 per game under the terms of the proposed settlement.

It also stipulates that EA will not sign an exclusive license arrangement with the AFL for five years and will not renew its current agreement with the NCAA, which expires in 2014, for at least five years.

�After more than four years of hard-fought litigation, we have reached a settlement that we strongly believe is fair to consumers,� said attorney Steve Berman, managing partner of Hagens Berman, the law firm representing consumers. �We look forward to moving this process forward and asking the court to approve this settlement, which we think is in the best interests of the class.�

On April 6, 2011, the court certified a class of consumers in the case, including all persons who purchased Madden NFL, NCAA Football or AFL games published by EA between January 1, 2005, and the present.

The proposed settlement must be approved by the court before it is final.

Consumers can learn more about this case by visiting www.hbsslaw.com/maddennfl. You can also contact Hagens Berman, lead-counsel in the action, by emailing [email protected].

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Member Comments

# 81 speedy9386 @ 07/21/12 02:12 PM

It's bull that the nfl wasn't included in this.

# 82 chi_hawks @ 07/21/12 04:20 PM

EA's stock has been tanking. The company is hurting. Losing another 30 mil, in addition to the investment they made in UFC (which I think will flop) could spell the end for these guys.

# 83 shaunlmason @ 07/21/12 04:22 PM

Quote:

Originally Posted by Big FN Deal


	Be of good cheer my friend, there was no need to include the NFL exclusive because EA ain't renewing that one anyway. #http://www.operationsports.com/forums/madden-nfl-football/530621-beware-ides-march-nfl-exclusive-license.html

I think you are wrong my friend. I know nothing you don't but I would think that EA wouldn't have settled if they were not going to renew the NFL license. If they weren't going to renew, they wouldn't have given up exclusive rights to everything else and settled, they would have just let the court declare it a monopoly and moved on.

# 84 jWILL253 @ 07/21/12 05:47 PM

Quote:

Originally Posted by SLVRBLCKATTACK


	were so doomed as a country, I have no idea how to even respond to this statement EA posted $83 million in net income (PROFIT!!!) last quarter (ONE 3 MONTH PERIOD), I am sorry for insulting you, but two minutes of work could of kept you from looking like an idiot.

Calm down, bro. Every major corporation promotes a net profit, as well as a loss, for every quarter...

# 85 DeuceDouglas @ 07/21/12 05:50 PM

Quote:

Originally Posted by chi_hawks


	EA's stock has been tanking. The company is hurting. Losing another 30 mil, in addition to the investment they made in UFC (which I think will flop) could spell the end for these guys.

I saw a tweet that said this settlement is worth about half of what EA made off Madden Ultimate Team last year alone. EA's not going anywhere.

# 86 chi_hawks @ 07/21/12 06:41 PM

Quote:

Originally Posted by SLVRBLCKATTACK


	were so doomed as a country, I have no idea how to even respond to this statement EA posted $83 million in net income (PROFIT!!!) last quarter (ONE 3 MONTH PERIOD). Which include only these console games, Mass Effect 3, FIFA Street 4, SSX, and Kingdoms of Amalur: Reckoning I am sorry for insulting you, but two minutes of work could of kept you from looking like an idiot.

Funny thing you mention looking things up before posting - because thats exactly what I did. Its nice being able to read through SEC documents on all companies.

Long story short, here is the net income after tax (which is what matters) for EA over the last 3 quarters:

Q3 2011: -340 million
Q4 2011: -205 million
Q1 2012: 400 million

I don't have Q2 for this year, but regardless, the companies income after taxes, over 9 of the last 12 months, is -145 million.

Now, they have another 30 million plus lawyer fees to pay.

Also, read my post better next time chief. It didn't say that this alone was going to bankrupt them. I said that this, in addition to the money they spent on UFC license (which I think will fail) may signal the end for EA.

There is a reason this companies stock is at its lowest levels in almost 20 years and was rated as the most hated company in America. Maybe they can turn it around - idk? Paying 30 mil in penalties isn't a good start though.

In case anyone wants to see more info on the trainwreck that is EA:

http://www.google.com/finance?q=NASDAQ:EA

http://investor.ea.com/sec.cfm

# 87 chi_hawks @ 07/21/12 06:55 PM

Quote:

Originally Posted by SLVRBLCKATTACK


	I am not mad, but damn the guy believes this company losing maybe 40 mil is going to break them, that is just sad Now Star Wars crashing that is going to hurt them

Could spell the end <> bankrupt. Perhaps I could have worded this a little better....EA is in trouble, has been in trouble, and this doesn't help.

It is funny how pissed this appears to have gotten you, though. Almost like your a hedge fund manager and you have some portfolios heavy leveraged in EA stock. Regardless, its kind of amusing.

Also, welcome to OS (I see you just recently joined).

# 88 scoonie05 @ 07/21/12 06:57 PM

bankrupt?? Lol....

# 89 mestevo @ 07/21/12 07:05 PM

Quote:

Originally Posted by chi_hawks


	Could spell the end <> bankrupt. Perhaps I could have worded this a little better....EA is in trouble, has been in trouble, and this doesn't help. It is funny how pissed this appears to have gotten you, though. Almost like your a hedge fund manager and you have a lot of your clients heavily invested in EA stock. Regardless, its kind of amusing. Also, welcome to OS (I see you just recently joined).

Are you really surprised someone called you on predictions EA would fail because they settled a lawsuit for $27m with none of the context you decided to add after the fact? Context that shows that quarterly they are trending very favorably in the black so pardon us if it doesn't do a whole lot to convince many who bother to read it.

EA lists $5.4b in assets on it's balance sheet, $1.8b of that in cash and short term investments. UFC could get cancelled and this lawsuit could be for 10x this amount and EA wouldn't be going anywhere.

Could they be better positioned? Certainly, but the entire industry is pretty depressed, an industry in which they're a pretty big player, their stock reflects that volatility.

Bankrupt? In trouble? Hardly.

# 90 scoonie05 @ 07/21/12 07:08 PM

If he consider EA in trouble, what does he consider TAKE two aka 2k which is hurting more then EA??

http://www.google.com/finance?q=NASDAQ:TTWO

# 91 chi_hawks @ 07/21/12 07:26 PM

Quote:

Originally Posted by mestevo


	Are you really surprised someone called you on predictions EA would fail because they settled a lawsuit for $27m with none of the context you decided to add after the fact? Context that shows that quarterly they are trending very favorably in the black so pardon us if it doesn't do a whole lot to convince many who bother to read it. EA lists $5.4b in assets on it's balance sheet, $1.8b of that in cash and short term investments. UFC could get cancelled and this lawsuit could be for 10x this amount and EA wouldn't be going anywhere. Could they be better positioned? Certainly, but the entire industry is pretty depressed, an industry in which they're a pretty big player, their stock reflects that volatility. Bankrupt? In trouble? Hardly.

No, not surprised. Could have worded it more appropriately (notice hes banned now).

Anyway, regarding EA's cash reserves as a backup for no quarterly income, if a company has to dig into its cash reserves to pay its bills, employees and dividends, its generally frowned up. Look at Sony. They have what, 21 bn in cash reserves, and it doesn't matter. They have been losing, their stock is at early 90's levels (much like EA). The market and investors are concerned - which directly coorelates to their market value and what folks are willing to pay for a share of their stock. Same applies for EA.

Will Sony continue to be able to pay dividends and get by? Sure. For a long time, I suppose. But if I had to make a roadmap from here to the end for Sony, it would look a lot like what is going on with them right now. Same with EA. It is a good sign for them that they were in the black the last 2 quarters though, but I think that breaks them even over a 1 year period. Not exactly what you'd like to see from the industry giant.

# 92 chi_hawks @ 07/21/12 07:31 PM

Quote:

Originally Posted by scoonie05


	If he consider EA in trouble, what does he consider TAKE two aka 2k which is hurting more then EA?? http://www.google.com/finance?q=NASDAQ:TTWO

I'd be shocked if Take Two is around in 10 years. Maybe even 5. I think market strategists would probably say the same thing. They have really taken a beating with this recession, and in particular, the video game industry not doing well has hurt them. This isn't unexpected though...I think history would show that when an industry stuggles, the minor players without the economies or cash funds to whether a recession are the most likely to get bought by a bigger player or fold their cards alltogether.

As an FYI, I'm not a 2k or EA person. Its not like I'm saying 2k is in better shape than EA b/c I like nba2k more than nba live.

# 93 thedudedominick @ 07/21/12 07:42 PM

Wait so does this only cover NCAA football? Or would it go for the basketball game too? I think I am in the minority on this website but I never enjoyed a 2k football game very much so I don't really care about them making an NFL or NCAA football game.

Fingers crossed for a College Hoops 2k game in the near future. I love college sports and I still own my College Hoops 2k8

# 94 RandyBass @ 07/21/12 08:01 PM

chi_hawks, you're missing the point. EA's position in the industry hasn't changed any because of this settlement, and that's the important thing. A relatively small lump of cash here or there isn't going to hurt them, neither is their stock price, and quite frankly neither is public perception.

They will continue to ride the wave of the gaming industry in pretty much the same manner as they have been doing, and people will still buy their games, in spite of Little Henny Pennys like you.

# 95 chi_hawks @ 07/21/12 08:02 PM

I always thought the NFL license was requested by the NFL itself - so I assume they have the rights to continue that. EA was the only one who could really pay what the NFL asked (idr how much it was).

2k's NCAA fball game kinds stunk IMO so I'd be shocked if they (or SCEA) got into the football game. Would be great to see new competition but the barrier to entry is high.

CH2k8 was fantastic - would love to see what 2k could do on a 3 year dev cycle run with a new college bball game.

# 96 stoncold32 @ 07/21/12 08:11 PM

Quote:

Originally Posted by JerzeyReign


	No more exclusive deals. And I'll still hold out hope that this will dissuade EA from renewing the NFL contract -- hopefully.

Actually since they will have extra money from no NCAA deal, they'll just throw that to further widen the bidding gap on the NFL license.

I wish Roger Goodell cared as much about how the NFL image is represented across the board...

That being said, i will gladly be in lne for whatever i can get from EA....I feel they owe me.

# 97 chi_hawks @ 07/21/12 08:16 PM

Quote:

Originally Posted by RandyBass


	chi_hawks, you're missing the point. EA's position in the industry hasn't changed any because of this settlement, and that's the important thing. A relatively small lump of cash here or there isn't going to hurt them, neither is their stock price, and quite frankly neither is public perception. They will continue to ride the wave of the gaming industry in pretty much the same manner as they have been doing, and people will still buy their games, in spite of Little Henny Pennys like you.

You argue paying tens of millions in penalties for price fixing, their tanking stock price, the industry they are giants in being decimated by mobile gaming, and incredibly poor public perception doesn't hurt them. Fair enough. Your entitled to your $.02. I will agree that they won't be passed by anyone in the industry, even with the lawsuit. Mostly because the industry is doing really poorly and may be getting replaced by a whole new model itself (mobile). If EA goes down - dang near everyone is going down.

Love the chicken little jab though. Well done.

# 98 bigsmallwood @ 07/21/12 11:23 PM

I just want competition back....no more monopolies....Thanx!

# 99 PVarck31 @ 07/22/12 12:11 AM

I don't get how anyone would think that just because NCAA 2K2 was a bad game would mean that any college football game that 2K made now would be bad. There's really no correlation at all. Most of - if not all of the developers are probably long gone.

If Take 2 did decide to do a college football game, I am sure they would assemble a new team, or bring back who they could from APF or 2K5.

This is just what I think would be the case.

# 100 bkrich83 @ 07/22/12 12:17 AM

Quote:

Originally Posted by SageInfinite


	Yeah the best on-field gameplay this gen, sure was a wreck.

Absolutely. Still unparalleled to this day.

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