SBD/September 27, 2013/Marketing and Sponsorship

EA Sports, CLC Settle Ed O'Bannon Lawsuit; NCAA Vows To Keep Fighting

EA's "NCAA Football" video game franchise likely will be discontinued
EA Sports and the Collegiate Licensing Co. have "settled all claims brought against them by plaintiffs in the joint Sam Keller and Ed O'Bannon lawsuit over the use of college athletes' names, images and likenesses," according to Jon Solomon of the BIRMINGHAM NEWS. EA reached "similar settlements in cases brought by former Rutgers football player Ryan Hart and former West Virginia football player Shawne Alston." Keller attorney Rob Carey said that more than 100,000 athletes "will be eligible for compensation at varying amounts." Some class members in the settlement "will have more valuable rights than others depending on the scope of their claims." The settlements "could date back as far" as '03. The "definition of the class-action suit includes active players, meaning current college players figure to receive payments from EA and CLC." Meanwhile, EA said that its "NCAA Football" game "won't be produced next year and may be gone for good." The manufacturer said that it is ending the game for '14 "due to ongoing lawsuits." EA said that the NCAA and "a number of conferences have withdrawn their support of the game" (BIRMINGHAM NEWS, 9/27). Keller's attorney Steve Berman said that the settlement "will include between 200,000 and 300,000 former college football players whose likenesses were used in the game." He would only say that the settlement would provide the ex-players with "something substantive." ESPN.com's Darren Rovell noted EA "will not admit any wrongdoing as part of the settlement agreement" (ESPN.com, 9/26). Investment bank Piper Jaffray Managing Dir & Senior Research Analyst Michael Olson said that EA's choice to cancel its NCAA game "could take about 3% off the company's expected top-line next year" (WALL STREET JOURNAL, 9/27).

IT'S NOT IN THE GAME: The "NCAA Football" game in recent years had begun to tail off in sales, falling to around 2 million units per year, far less than what core company franchises such as "FIFA" and "Madden NFL" sell each year. EA Sports GM/Football Games Cam Weber in a company blog post wrote, "We have been stuck in the middle of a dispute between the NCAA and student-athletes who seek compensation for playing college football. Just like companies that broadcast college games and those that provide equipment and apparel, we follow rules that are set by the NCAA -- but those rules are being challenged by some student-athletes. ... The ongoing legal issues combined with increased questions surrounding schools and conferences have left us in a difficult position -- one that challenges our ability to deliver an authentic sports experience." Weber went on to call the cancellation "profoundly disappointing" (Eric Fisher, Staff Writer).

FIGHTING THE FIGHT: USA TODAY's Steve Berkowitz writes the NCAA has "vowed to keep fighting on the issue for as long as necessary." With Thursday's settlement, the NCAA now is the "lone defendant" in the case with O'Bannon, Keller and five other current football players. NCAA Exec VP & General Counsel Donald Remy early Thursday said that the association was "gearing up for that case with even greater resources and resolve than it has before." Remy: "We're prepared to take this all the way to the Supreme Court if we have to. We are not prepared to compromise on the case" (USA TODAY, 9/27).
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