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The Deal that Never Was

Filed under: General Gaming
Posted by Jeremy on May 19, 2004 9:58 AM
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In the May 3, issue of Sports Business Journal an article ran with the headline, "EA set to pay Players Inc. $1 billion". Players Inc. is the marketing company for the NFL's Player Association. The deal would have given EA exclusive rights to player's names and images for the sum of $250 million per year for four years. That move would have effectively put any other NFL game other than EA's "Madden" out of business. This caused a big furor amongst non-EA publishers, like ESPN and Sega. However, the furor was for naught as Gamespot is now reporting that the Sports Business Journal has since retracted it's story and representatives from Player's Inc. and EA have denied such a deal.

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Let's go ahead and pretend that the deal is true. What would be the impact of such a thing? Well, EA, which already dominates the video game market, including NFL games with its "Madden" series, would strengthen it's position putting all other NFL games on a second tier. It's not as if other NFL games would go away. You can imagine the striking similarities in likeness and names that would be used, like Meyton Panning or Eddie Forge. And, although that would have a certain collectible and subversive element to it, it just wouldn't be as cool to play a game without your favorite stars and their trademark moves and faces.

Another aspect to consider is the ridiculous amount of money that EA supposedly offered. $250 million per year!?!? For video game rights? Granted it's kind of akin to comparing apples to oranges, but for reference, ESPN is currently negotiating NHL (Hockey) rights for TV and it's estimated that it will be about $60-70 million per year, for TV!

And then that begs the question, why would EA be willing to put down that much money? Well, it's to protect one of its most successful franchises. Since it's debut in 1989, "Madden" has sold over 19 million copies. The game sets sales records almost every year it comes out. It is the ultimate sequel...generating millions in sales year after year. Why not try to rub out the competition in a four year span?

Then, of course, you'd have to look at it from Player's Inc. perspective. Again, the crapload of money argument is obvious. But, other than that, what would they have to gain from supporting only EA? I'm not really sure. I know that the move would have upset Sega and, more importantly, ESPN who broadcasts Sunday night football. That couldn't be good.

Player's Inc., one would think, would stand to gain much more by licensing to a variety of gaming companies so that they would near that $250 million mark, without getting it all from one source. It would seem the only fair thing to do. Hah, I just said fair in reference to the NFL, EA, and Player's Inc.

The impact of such a deal would go way beyond Football. EA's "FIFA" (soccer) franchise is the best selling game series in the world. You could see that EA would soon make a similar bid on licensing FIFA's player's likenesses and names. Then, it would spread to every major sport. A bidding war between EA and other game publishers would ensue for "x" sport and you'd end up with one "official" game for each sport. What's the fun in that? Seems a bit unfair to me.

I'm just not up for a slam dunk with Shaky O'Peal or Sobi Dryant.

I'm not all and all against EA dominating the video game market because I truly enjoy most EA games, but I think they have to be careful not to cause a backlash.









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