SBD/September 30, 2013/Marketing and Sponsorship

EA Sports, CLC Lawsuit Settlement Will Be Reduced By Attorney Fees, Expenses

College players from as far back as '03 will be eligible for money
Plaintiffs' attorneys said that the athletes covered by EA Sports and the Collegiate Licensing Co.'s $40M settlement of four lawsuits regarding the use of their names, images and likenesses "will see millions less" than that, and "though tens of thousands of athletes may be eligible for compensation it is possible they will not be compensated equally," according to Steve Berkowitz of USA TODAY. Plaintiffs' attorney Michael Hausfeld said that "attorneys' fees and expenses for the plaintiffs' side, as approved by the courts, will be deducted from that amount." With such "presumptive class-action suits, it is typical for fees and expenses to be at least 20% of the settlement amount -- which in this case would be" $8M. Berkowitz noted the settlement, if approved by various courts, will conclude three cases against EA and both companies' role in a fourth case that will continue with the NCAA as the sole defendant. The money "headed toward claimants will be spread across a complex matrix of Bowl Subdivision football players and Division I men's basketball players from as far back" as '03. A "much wider range of players presumably will be covered by the anti-trust action" filed on behalf of Ed O'Bannon in July '09 than the case brought by former Rutgers football player Ryan Hart. The statute of limitations in the O'Bannon case "likely will mean it will cover any player on an FBS football or Division I men's basketball roster from July 2005 to present." There "potentially will be a variance in what claimants will be able to receive." Players who "appeared on rosters but were not in the games as avatars could get less than players who were in the games as avatars." Players who appeared as avatars in '03 and '04 "may get less than players who appeared as avatars recently" (USATODAY.com, 9/27). Hagens Berman Managing Partner Steve Berman, who served as co-lead counsel for the plaintiffs, said that the number of players to benefit from the settlement is "between 200,000 and 300,000." Sources said that current players are "eligible to take part in the settlement ... raising questions about how the NCAA will treat any such financial awards under its rules, which prohibit players from making money from their name as an athlete" (ESPN.com, 9/27).

NOT ABOUT THE MONEY: ESPN's Lester Munson noted the $40M settlement is a "significant amount," but with $500M taken in annually on these video games, the amount "does not appear to be a sum of money that is in any way going to hurt EA's financial picture." Former Arizona State QB and plaintiff Sam Keller said, "The money was never the part that drove ... the case. What we wanted to do was change the landscape" ("OTL," ESPN2, 9/27). In Chicago, Rick Telander noted a $40M settlement "divided by 300,000 plaintiffs is $133.33 per person," and "divided by 200,000, it is $200." That is "enough to buy a couple of copies of 'NCAA Football 2015,'" except "there won't be one" (CHICAGO SUN-TIMES, 9/28). ESPN's Tony Kornheiser said, "This has to be more about principle than actual payout. ... The big prize is suing the NCAA because the NCAA has the conference money and the NCAA has the big television money and if you make this lawsuit stick against them ... down the road you can basically bankrupt the NCAA" ("PTI," ESPN, 9/27).
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