SBJ/June 10-16, 2013/Labor and Agents

Cut in EA revenue costs NFLPA

Lose most of a category that is commonly a company’s most lucrative, and an overall drop in revenue can be expected.

That is what has happened to the NFL Players Association, whose sponsorship and licensing income dipped below $100 million for the 12 months ended Feb. 28, 2013, according to an analysis of the union’s annual report filed recently with the U.S. Department of Labor. That is down from the $127 million the union took in for the 12 months ended Feb. 28, 2011, the last full year the union reported to the labor department.

The interceding filing was for only a partial year because of the 2011 player lockout. The NFLPA did not have to disclose figures for the lockout period because it was not operating as a union during that time.

The last time the NFLPA reported commercial revenue of less than $100 million for a full year was 2005.

The prevailing reason for the decline: Revenue from Electronic Arts in the most recent 12 months was $2.155 million. Between 2006 and 2011, the NFLPA’s EA revenue averaged $32 million, far and away the biggest sponsor or licensee in those years, often by two- to threefold.

For the eight months covered under the 2012 NFLPA filing, EA income came in at less than $1 million to the NFLPA. So combining that total with the 2013 amount, the NFLPA for a 20-month period brought in less than $3 million from its historically top licensee.

The NFLPA did not return queries seeking comment. Last year, when asked similarly about EA, a spokesman replied he did not wish to answer the question.

It is possible the NFLPA took an upfront payment from EA during the lockout period of March 12-July 25, 2011, to help sustain the players during their battle with the owners. There are no indications the economics of EA sales of its football video games have changed in any way to suggest such a steep drop in royalties.

EA also declined to comment.

Absent the video game money, the most recent annual filing suggests business as usual for the NFLPA. The largest source of income is the NFL itself, which through its licensing and marketing deal with the NFLPA paid the union $44.5 million in the most recent year. That’s nearly half of the $98.6 million in commercial revenue for the 12 months ended Feb. 28, 2013.

Jerseys and trading cards contributed the bulk of the remaining money. Nike paid the union $11.7 million; Topps and Panini America combined paid $22.1 million. Outerstuff, a youth apparel maker, paid the union $4.8 million.

The annual reports, also known as LM-2s, use cash and not accrual accounting, so if a company made a large payment one day past the end of the LM-2 12-month period, it would be reflected next year.

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