Spot On: Inside EA Sports' exclusives

After shaking up the sports gaming world with three back-to-back licensing deals announced earlier in the year, EA Sports is finally ready to talk. The publishing giant recently opened up about a trio of exclusive partnerships with the National Football League, the ESPN broadcasting network, and the Arena Football League, deals that have, in just the span of a few months, created a much different landscape in the sports gaming industry than that seen in mid-2004.

Speaking first about the exclusive five-year licensing deal brokered between EA Sports and the NFL, Todd Sitrin, vice president of marketing for the publisher, emphasized that this was a business path first pursued by the NFL itself. "The timeline for the NFL deal really started quite a while ago," said Sitrin, "around spring of 2004, when the NFL and the (NFL) Players Association decided to take a more focused look at the video game business. It was through those discussions I think the NFL realized they wanted to change the model of how the business was set up and move to exclusives in their relationships. And then it became an issue of who they wanted to move forward with." Of course, exclusive licenses are nothing new for the NFL, which has secured exclusive relationships with companies like Reebok and Gatorade for apparel and sports drinks, respectively. As Sitrin put it, the deal with EA was just an extension of the NFL's ongoing business mind-set.

Of course, EA was not the only one in the running for the valuable exclusive license. Even companies outside of the traditional sports video game space were also courting the NFL, Sitrin said, even mentioning Disney as a onetime suitor. Indeed, as negotiations progressed, Sitrin said there were some tense times in the months leading up to the agreement when it appeared that the deal might fall completely through. "I think whenever you're in negotiations between different companies or between leagues and companies there's always a little bit of a frenzy, and certainly there was a lot going on at that time period," Sitrin said. "One thing that everyone needs to recognize is that as much as EA did get the NFL deal and the ESPN deal, those things could have not happened. There were a lot of players that were very interested in relationships."

In terms of the 15-year exclusive ESPN deal, Sitrin considers the partnership a case of two like-minded companies coming together. "As things progressed, we started talking to [ESPN] more, they started talking to us more and we realized that there was an opportunity here to partner together and take these two incredible companies that were really focused on sports and create a partnership…that could be committed to taking interactive sports gaming to another level."

The exclusive NFL and ESPN deals, Sitrin said, will pay long-term dividends in terms of new content for the Madden franchise, most notably through unprecedented access to NFL and ESPN content. Sitrin specifically referred to the "arm's length" relationship his company kept with the NFL and NFLPA in the past; one that has grown considerably closer since the inking of the exclusive deal. Benefits from this relationship, Sitrin said, will be most obvious to gamers through the use of NFL-owned properties such as the NFL Network, previously unavailable player, team, and playbook data, and the use of NFL Films materials, among others. While no specifics were discussed, Sitrin did mention that the odd timing of the NFL licensing announcement, coming well into the development cycle for the latest version of Madden, means that gamers will see some of the fruits of this new relationship in this year's game, with more on the way in future games. "You'll start to see some of [the new content] appear this year but I think the full-blown version of that will be in future versions." Similarly, the ESPN deal, which is officially slated to begin next year, means gamers won't see the Bristol, Connecticut-based company brand on EA's line of sports titles until 2006, though Sitrin did mention that the two companies have begun mapping a long-term content strategy over the life of the 15-year deal.

While the deals with the NFL and ESPN are characterized by close working relationships between the respective companies, the deal between the software publisher and the Arena Football League is unique, given EA's direct financial stake in the growth of the 19-year-old sports league. "[The AFL is] a very unique brand of football that is very different from what outdoor football is all about. So we can take that unique football experience and we can work in partnership with the league to sort of grow a sport together and that was an interesting proposition for us." While the first AFL game isn't due until early next year (in time for the start of the actual 2006 AFL season), Sitrin said a dedicated development team is already in place working on the title.

So how does Sitrin react to critics who claim that these exclusives signal the death of innovation in football gaming? He admits that such a negative outpouring is a natural reaction when such a sea change occurs in the marketplace. Yet Sitrin also believes that just because EA has eliminated the competition doesn't mean it will rest on its laurels. "I think for those people that think that this is the end of innovation because it gets rid of competition, I think they just have too narrow of a definition of what competition is. The reality is, competition for Madden…is much broader than that. For us, competition is Halo 2, Grand Theft Auto, or any of those games," Sitrin said.

Referring specifically to publishers such as Take-Two Interactive and Ubisoft, who have announced their intentions to take the sports gaming fight directly to EA, Sitrin admits that he has no illusions about his competition's willingness to stay in the game. "There also seems to be this perception out there that somehow with all these deals that we can kick back and we don't have to innovate or there's no pressure. If anything, I think there's more pressure."

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