CEO Weekends: No license for Electronic Arts to make NCAA games



The National Collegiate Athletic Association (NCAA) declared that the licensing renewal agreement between EA Sports will not push through.  Electronic Arts (EA) Sports license will expire in June 2014; this means that the upcoming NCAA 2014 will be the last college football game released under the license.

The NCAA games were strong and expected and were a source of revenue for the EA Sports; however the games did not make so much money and was not as popular worldwide as FIFA.

Apart from making college football the company had also made a footprint in college basketball as well as baseball in the past. EA Sports had signed a deal in 2005 which had given them an exclusive license to NCAA teams, logos and a major competitive advantage over their major rival 2K. These are some of the things that the company would loose out on.

This piece of information doesn’t necessarily mean that it will be the end of the EA Sports making it to the NCAA games; it only means that they will have to negotiate with ever team and school at an individual level which is quite costly.

Disagreements are not something new to these college games and the license problem could be a result of a disagreement. Electronic Arts was hit with a class-action lawsuit accusing that the company’s licensing deals effectively gave it a monopoly over sports games, which it settled last year for USD27 million. Part of the contract in that resolution was that it would not enter into any other such agreements for five years.

It’s also gotten in trouble for including actual student athletes in its games, a no-no because college athletes are not supposed to be professionals and aren’t paid for their likenesses. Another class action lawsuit is ongoing about that.