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NCAA will not renew contract with EA sports due to ‘costs of litigation’

Above: NCAA Football 14 in action.

Image Credit: Electronic Arts

Updated at 2:50 p.m. with comment from EA.

NCAA Football 14 is the last game from Electronic Arts that will feature the official license of college football for the foreseeable future.

The National Collegiate Athletic Association (NCAA) released a statement today announcing it will not renew the lucrative contract it has with Electronic Arts. That agreement enables that publisher to release games with official teams and bowl games for its college football series.

“The NCAA has made the decision not to enter a new contract for the license of its name and logo for the EA Sports NCAA Football video game,” reads the NCAA statement. “The current contract expires in June 2014, but our timing is based on the need to provide EA notice for future planning. As a result, the NCAA Football 2014 video game will be the last to include the NCAA’s name and logo.”

Former UCLA basketball star Ed O’Bannon is leading a lawsuit against the NCAA that claims the organization profited from his and other amateur players’ likenesses without providing compensation to those athletes.

“We are confident in our legal position regarding the use of our trademarks in video games,” the statement continues. “But given the current business climate and costs of litigation, we determined participating in this game is not in the best interests of the NCAA.”

In its defense, the NCAA claims that is has never licensed the use of current student-athletes’ names, images, or likenesses to EA.

“The NCAA has no involvement in licenses between EA and former student-athletes,” reads the statement. “Member colleges and universities license their own trademarks and other intellectual property for the video game. They will have to independently decide whether to continue those business arrangements in the future.”

EA confirmed it will work with the Collegiate Licensing Company (CLC), which handles the licensing of official college teams, to release a new college-football game next year.

“EA Sports will continue to develop and publish college football games, but we will no longer include the NCAA names and marks,” EA Sports executive vice president Andrew Wilson wrote in a blog. “Our relationship with the Collegiate Licensing Company is strong and we are already working on a new game for next generation consoles which will launch next year and feature the college teams, leagues and all the innovation fans expect from EA Sports.”

As evidenced by this preemptive decision to pull out of games, the O’Bannon lawsuit could have wide-reaching effects on the NCAA’s business model. The NCAA generates millions of dollars in revenue by working with universities to license jerseys, hats, and other items that feature the numbers and names of popular amateur players.

Those players do not receive a dime of the sales, as it is against NCAA regulations for student athletes to receive compensation other than education for their participation in college sports.

If O’Bannon’s lawsuit wins, it would mean that the NCAA will either have to completely rethink how its licensing agreements work, or it will have to begin compensating players.

This case potentially won’t go to trial for years, but the costs of conducting a legal defense alone are enough to scare off the NCAA. The organization is clearly trying to reduce the amount of risk it is exposed to going forward until it settles this matter.


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