EA & the NFL get in bed but who's the daddy?

Razer · 4934 5157 5662 5658 Gender: Joined: 07 Oct 2002

Big Deal: EA and NFL ink exclusive licensing agreement

Five-year contract gives EA sole rights to the NFL, including teams, players, and stadiums. Take-Two reacts, calling it a "tremendous disservice to the consumers."

Electronic Arts has signed the biggest sports free-agent on the market. In a devastating blow to competitors--and in a deal sure to reshape sports gaming--the software giant signed an exclusive agreement with the National Football League and the NFL Players Inc., a subsidiary of the NFL Players Association.

The deal, one EA admits to having lobbied for over the past few years, is an exclusive five-year licensing deal granting EA the sole rights to the NFL's teams, stadiums, and players. However, the publisher and Players Inc. denied a similar deal was in the works in May 2004, even requesting publications which ran the story run public retractions.

The NFL/EA arrangement encompasses action, simulation, arcade-style, and manager games made for PCs, consoles, and handhelds (both the DS and PSP, included), giving EA a firm hold on the football gaming market. The deal does not include titles for mobile phones or internet-based games, but does include online features of consoles. With next-generation consoles scheduled for release next holiday season, EA looks to handily dominate the professional football market for the duration of the license.

EA's current roster of NFL games includes the top-selling Madden franchise and the extreme football NFL Street franchise. Given that EA currently has no "manager games" per se, there is clear writing on the wall that the publisher will announce a new sports management lineup of products, though it refused to comment on when.

A source close to the negotiations said it was at a spring, 2004, off-site meeting attended by top NFL officials that the league determined it would take the league license exclusive. GameSpot was told the league put the license up for bid and that EA was among as many as five software publishers competing for it. An EA spokesperson said today, "Obviously, exclusives are more expensive. We are most certainly paying a premium."

In a statement, Larry Probst, Chairman and CEO of Electronic Arts said, "We are excited about the opportunity to further enhance our relationship with the NFL and PLAYERS INC. The five-year agreements will usher NFL fans through the console technology transition with new ideas and innovative game play experiences."

The deal is obviously bad news for EA's competitors, particularly ESPN Videogames, Sega, and Take-Two who stole a respectable chunk of EA's Madden football market with their NFL 2K series and it's budget price tag this year of $19.99.

Arguably, the deal will impact consumers negatively as well. With less choice, theories of competition no longer apply. Some industry insiders speculate the exclusive deal was embraced by the NFL after it saw Take-Two lower the price of its 2K5 product earlier this year. No licensor likes to see a price war being fought with its brand value at stake. At the same time, exclusive licenses in the sports world are more the norm than non-exclusive licenses. The NFL's apparel license is a Reebok exclusive, as is its beverage license with Gatorade.

This afternoon, Take-Two issued the following statement: “While sports games in general are an important part of Take-Two's product diversification strategy, the licensed NFL game we distributed on behalf of Sega this year was not a material contributor to our profitability to date, nor was it expected to be a meaningful contributor in the upcoming year. We remain committed to continued diversification of our product portfolio, including sports.

"We believe that the decisions of the National Football League and PLAYERS INC to grant an exclusive license for videogames do a tremendous disservice to the consumers and sports fans whose funds ultimately support the NFL, by limiting their choices, curbing creativity and almost certainly leading to higher game prices.”

"I really respect them, but the consumer really loses," one analyst told GameSpot. "EA is both evil and really smart."

As for such a deal affecting quality of future football products, EA's vice president of corporate communications Jeff Brown told GameSpot, "The onus is on EA to keep making a better game each year…that's the hurdle you have to clear every year."

Even before the news was released, trading of EA stock had its value spiking north. On trading nearly three times its usual amount, EA stock was up more than $3 today. The stock closed at $57.57, up $3.38, or 6.24 percent, with 16,574,606 shares trading hands on the NASDAQ. In after hours trading, the stock at press time had jumped another $2.88 to trade at $60.45.

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Good news for EA shareholders but bad news for gamers everywhere.

Blackmage · Posted: Tue Dec 14, 2004 1:31 pm Post subject:

Bah I hate EA Sports games, only ones I liked were back in the genny days. And isnt this move kinda monopolish?

Shino · Posted: Wed Dec 15, 2004 10:25 am Post subject:

What's wrong EA... Sega kicked your a$$ now you want to make sure it never happens again?

I HATE monopolizing companies!

Razer · 4934 5157 5662 5658 Gender: Joined: 07 Oct 2002

Well here's some food for the "conspiracy machine":
Me and my friend were discussing this story and I pointed out that an argument could be made that EA has been trying to sink Sega since they declared they wouldn't publish for Dreamcast. That got us thinking all the way back to the genesis days when EA

A) pressed their games on their own carts instead of paying a licensing fee to Sega for the "standard" Genny cart

and

B) created their own multi-tap adaptor which would pretty much only work with EA games (Sega subsequently created a tap the would work with both types of games and EA tried to sue to stop production of it)

Now these two incidents (and I'm sure there are a few that I am missing even now) might seem trivial but add in their decision to pull from the Dreamcast (while still making Gamecube games) and the head to head battle with the sports games (dropping Madden 2005 to $30 to combat Sega's NFL2K5) and it becomes a little more than smoke & mirrors.

One EA exec claimed that Sega "couldn't sell that thing (ESPN NFL 2K5) if they taped it to a ham sandwich" and while the quote is cute, a few weeks later Madden's price dropped, which is unheard of. Also keep in mind that NFL 2K5 outsold Madden on the XBox prior to the price drop.

Conspiracy???

Shino · Posted: Wed Dec 15, 2004 11:34 am Post subject:

Didn't NFL 2k5 outsell Madden in general.

Nogrick · Everybody DANCE! Gender: Joined: 30 Sep 2002

So now EA can make Crappier games and charge $50 for everyone. Boo.

Shouldn't there be some kind of law prohibiting that sort of stuff?

Blackmage · Posted: Wed Dec 15, 2004 2:24 pm Post subject:

Generally thats a monopoly Nogrick, Now lets see if SEGA tries to go anti-trust against them, as well as midway and a few other companies, becuase I personally always liked NFL Blitz.

Gekko · I lurk therefore, I am. Gender: Joined: 02 Apr 2003

Personally, I think that the only way this will change is by consumers boycotting EA.
I wanted NFS:U2 but I wont buy another EA game or anything published by them, or that they somehow get royalties for, until this NFL deal is over or turned over. Fuck you EA, you've been sucking for about 5 years now, and today you turned into a vaccuum cleaner.

Shino · Posted: Thu Dec 16, 2004 7:47 am Post subject:

I'll do the same thing with EA that I do with MS.

Just buy the games Used. That way they didn't get any royalties off of you.

Gekko · I lurk therefore, I am. Gender: Joined: 02 Apr 2003

Hmmmm, and some ppl say you're slow...................j/k, but good idea lol