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 that 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 nonexclusive 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.
For more information on all things athletic-game-related, visit GameSpot's new Sports Games section.
Content you might like…
-
EA Sports extends NFL deal through 2012 season
Peter Moore announces gaming division will keep monopoly on top US sport through 2013 Super Bowl; "further investment" could bring back NFL Coach series.
- Feb 12, 2008
Users who looked at this article also looked at these content items.
Hot Stories
Newsmakers
-
Comic-Con 2010: Marvel vs. Capcom 3 Panel
Check out what is revealed at the Marvel vs. Capcom 3 panel from Comic-Con 2010! Full Story
- Posted Jul 23, 2010 10:16 pm PT
-
Comic-Con 2010 Day 1 Highlights
From Comic-Con 2010, take a look at a quick highlight video of some of the cool stuff. Full Story
- Posted Jul 23, 2010 5:28 pm PT
Featured Stories
-
3DS could cost more than $250 - Analyst
Wedbush Securities analyst Michael Pachter says Nintendo can sell "millions" at projected mark; software price average to climb as well. Full Story
- Posted Jul 26, 2010 3:25 pm PT
- 534 Comments
-
343 Industries on building the Halo universe
Comic-Con 2010: Creative director Frank O'Connor talks with Greg Bear, Karen Traviss, Peter David, and more to discuss upcoming novels, comics, and animated films set in Microsoft's acclaimed franchise. Full Story
- Posted Jul 25, 2010 2:29 pm PT
- 157 Comments
-
More songs confirmed for Guitar Hero: Warriors of Rock
Activision announces 22 more tunes for latest rhythm game; artists include Five Finger Death Punch, Alice Cooper, Pantera, Sum 41, Them Crooked Vultures, and others. Full Story
- Posted Jul 26, 2010 5:10 pm PT
-
Capcom to cut development time - Report
Total production time for big titles could be halved in attempt to double output from major franchises. Full Story
- Posted Jul 27, 2010 7:59 am PT
- 141 Comments
-
Shippin' Out July 25-31: Starcraft II
First part of Blizzard's long awaited, trifurcated real-time strategy sequel finally arrives alongside BlazBlue: Continuum Shift, Clash of the Titans. Full Story
- Posted Jul 26, 2010 6:59 pm PT
- 87 Comments
Submit News
Related Game
Recent News
-
PS3 helps put Sony back in black
Electronics maker posts $295.2 million profit thanks in part to rising demand for console; game division revenue up 32 percent, but exchange rates keep...
10 Comments
Sign in / Sign up