SBD/November 21, 2013/Colleges

NCAA Sues EA Sports, CLC In Connection With Settlement Of Ed O'Bannon Lawsuit

The NCAA is suing EA Sports and the Collegiate Licensing Co., claiming they "breached contractual and fiduciary duties when acting as its business partners in producing popular college-sports videogames that have since landed all three parties in court," according to Rachel Bachman of the WALL STREET JOURNAL. A Nov. 4 filing by the NCAA in Fulton County (Ga.) Superior Court states that CLC "failed to 'adequately supervise'" EA Sports. The suit comes after a $40M settlement agreement announced in September by EA Sports and CLC, which "used to be co-defendants with the NCAA" in the Ed O'Bannon case. The NCAA's filing alleges that CLC's "breached duties included 'self-dealing in settlement negotiations without the NCAA's knowledge, authorization or participation.'" The NCAA seeks to "prohibit EA Sports and CLC from completing the settlement, and have EA be held responsible for future liability judgments and legal fees." The most prominent of the suits referenced in the filing is the class action "alleging that the NCAA and its business partners violated antitrust law by conspiring to fix at zero the price of a college athlete's name, image and likeness" (WALL STREET JOURNAL, 11/21). In Birmingham, Jon Solomon reported the NCAA in the suit claims that CLC "breached its contractual obligations with the NCAA by failing to supervise EA's obligation to maintain liability insurance, making the NCAA potentially liable in several suits." The NCAA said that CLC "knew that EA failed to maintain insurance to cover the NCAA 'but did not direct EA to cure the defect,' and CLC never notified the NCAA" (AL.com, 11/20).
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