Brandr Suit Against EA Could Set Precedent on Licensing Contracts
Electronic Arts is planning to pay college football players $500 for their name and likeness to appear in next year’s college football video game—EA’s first in 11 years. Does that decision reflect individual negotiation or group licensing?
This is a crucial question in a complaint filed by The Brandr Group on Tuesday. The litigation could complicate EA’s plan to release EA Sports College Football next year.
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As Brandr tells it, EA has tortiously interfered with the NIL agency’s agreements with 65 partner schools and 3,725 college football players, violated its right of publicity and engaged in unfair and fraudulent business acts. EA has directly—and unlawfully, Brandr charges—negotiated with schools and players.
Brandr’s complaint was filed in a California superior court, but EA transferred the case to a federal district court in San Francisco. Brandr demands a jury trial and seeks an injunction to restrain EA from negotiating with schools and players without Brandr’s consent. Brandr also hopes to recoup lost royalties that Brandr would obtain as part of group licensing negotiations and disgorge profits and punitive damages that reflect “oppression, fraud or malice” supposedly perpetuated by EA.
As Sportico explained, EA has the right to set whatever terms it wishes for player inclusion in its game. EA has opted for a “take it or leave it approach” in which players can accept $500 in exchange for written consent to use their name and likeness. If a player declines, EA is expected to use a generic avatar who is not identifiable. EA has enlisted OneTeam Partners, which handles group licensing deals, to facilitate this process.
EA’s approach is straightforward, treats players equally and, by preempting negotiation, minimizes transaction costs. EA also doesn’t have the option of negotiating with a players’ association like it can with pro athletes. College athletes are not (yet) recognized as employees under the law and thus can’t form a union.
But EA has faced criticism over its plan, which reportedly does not contemplate royalties from video game sales; according to Brandr, the plan would deny players from “earning additional compensation off of their NIL in other simulation games such as arcade and video game opportunities.”
Star players, some have observed, are typically far more marketable and recognizable than their teammates. They arguably should be paid a higher rate to appear in EA’s game, just as they are able to generate more money than their teammates via NIL deals. The College Football Players’ Association, a group advocating on behalf of college players, has urged football players to turn down the $500 on grounds it is too low. In 2014, Ed O’Bannon and EA negotiated a settlement wherein about 29,000 players who appeared in college football and college basketball video games were paid, on average, about $1,200—140% more than $500.
Brandr says EA’s plan “continu[es] the pre-O’Bannon pattern of large corporations taking advantage of young student-athletes and capitalizing on their NIL.” And it further contends EA must negotiate with it.
The company reports it has signed thousands of college football players and recruits to “group licensing and assignment contracts.” These contracts contemplate Brandr negotiating the player’s NIL, which includes autograph, voice and biographical information, in “college group licensing programs,” a term that kicks in when a licensee or sponsor (such as an apparel company) uses three or more players from the same team or six from the same athletic program, along with university trademark and logos. Brandr says EA will draw multiple players from each football team and thus repeatedly triggers the clause.
But EA, which did not respond to a request for comment, will stress other points when it answers Brandr’s complaint and seeks its dismissal. EA will emphasize it is not in contract with Brandr and therefore not legally bound by the terms and methodologies Brandr negotiates with schools and athletes.
The video game publisher could further assert that it did not induce any school or player to break an agreement with Brandr; it instead, EA will say, sought to conduct an individual negotiation.
To that point, Brandr’s complaint includes excerpts of emails from EA officials in which they say EA is entering into individual contracts with players to opt-in their likeness rights and, as EA sees it, group rights are not implicated. EA might also suggest that if Brandr believes its contracts with schools and players are in breach, it ought to pursue legal action against breaching parties (i.e., the schools and players).
Brandr’s complaint clarifies that a player is not bound by a group licensing agreement when the player individually markets or licenses their NIL, such as when “an advertising campaign depict[s] only that individual.” Brandr illustrates this point through Michael Jordan’s “Air Jordan” campaign with Nike. But Brandr maintains EA is not acting like Nike in that hypothetical but instead a company that is signing a group of players from teams.
Whether Brandr or EA’s working definition of “group licensing” will be a key topic for the presiding judge, Laurel Beeler. The case could set important precedent on how licensing contracts are interpreted when groups are implicated through individual dealmaking.
