EA College Video Game Returns as Labor Push Picks Up Speed
EA’s confirmation last week that its college football video game will return in 2024, 11 years after the last release of NCAA Football, marks a new era for sports video games and college sports.
For the first time, college players will be paid, with those who opt in receiving $500.
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The development comes as the National Labor Relations Board moved one step closer to finding that colleges, conferences and the NCAA are joint employers of college athletes. In that scenario, college athletes could unionize, collectively bargain terms of employment and negotiate group licensing deals with video-game publishers and other businesses.
Although the EA and NLRB developments are unrelated, they forecast a near-term future where college athletes appear in video games in the same vein as NFL, NBA, MLB and NHL players.
EA previously published college football and basketball games that contained the logos, colors and other intellectual property of the NCAA and colleges, with EA paying the NCAA and colleges to use those properties.
The games also contained the likenesses of players, but without those players’ names or consent and without paying them. In different legal actions, Ed O’Bannon, Sam Keller and Ryan Hart sued EA for violating their and other players’ right of publicity. Though varying by state law, this right generally forbids the commercial use of another person’s identity without their consent.
In those litigations, EA argued it was protected by the First Amendment. EA insisted that video games are like books and movies in expressing ideas and creating features distinctive to the medium, with player avatars interacting in a virtual world. The video game setting purportedly transforms a real athlete’s likeness into an avatar that has more to do with the talents of EA programmers than those of the real-life athlete.
Two federal appeals courts, the Ninth and Third Circuits, didn’t buy that argument. They emphasized EA tried to make the games as realistic as possible—recall EA’s “It’s in the game” tagline—and that EA went so far as to allow video-game users to upload rosters of real players’ names as a way of more closely linking their virtual world with the real one.
With O’Bannon, EA negotiated a settlement in 2014 wherein about 29,000 players who appeared in college football and college basketball video games were paid, on average, about $1,200. Depending on how many games featured them and how directly their likenesses were copied, some players got as much as $7,200.
By the mid-2010s, EA faced a conundrum moving forward. Even if EA wanted to pay college players for use of their likenesses, EA could not do so without causing those players to violate NCAA amateurism rules that, until the NIL era began in 2021, rendered players ineligible for exercising their right of publicity. The NCAA and colleges might have also refused to license their own IP if the video-game publisher negotiated with players.
Had the NCAA allowed NIL in the 1990s or 2000s, EA could have made games with real players, who would have been paid. It took the O’Bannon litigation and states adopting NIL statutes, along with the Supreme Court declaring in NCAA v. Alston that amateurism rules are subject to ordinary antitrust scrutiny, to force the NCAA to acquiesce on NIL.
EA’s return to college sports video gaming is designed to avoid potential legal headaches. Through a partnership with OneTeam Partners, EA will invite college players to contractually agree to appear in the game for $500. Players who don’t sign up will presumably be replaced by fictitious players.
It is lawful for EA to offer players, of varying fame and talents, a flat and non-negotiable rate. This approach is sometimes called a “contract of adhesion” or a “take it or leave it” deal. It is common—and typically lawful—in licensing, leasing and other types of transactions. EA can set the terms of its offer; no law compels EA to offer more than $500 or to bargain any terms.
EA also appears to be in good standing with antitrust law. Section 1 of the Sherman Act makes it illegal for competing businesses, such as NCAA member schools or teams in a pro league, to conspire in ways that unreasonably restrain competition; EA is not conspiring with other video-game publishers. Section 2 of the Sherman Act tackles monopolies; EA is merely offering one video game to consumers who can choose many others instead.
EA’s reliance on OneTeam is sensible since OnePartners can use its NIL expertise and industry presence to facilitate transactions with large numbers of players. It would likely be costly and inefficient for EA to attempt one-on-one player negotiations.
Unlike with games for pro leagues, EA also has no college athlete union in which to bargain. This is because, for now, college athletes are not recognized as employees and can thus not unionize.
However, an NLRB regional director in Los Angeles last week issued a complaint opining that USC, the Pac-12 and NCAA are joint employers of Trojan football and men’s and women’s basketball players. The issuance of a complaint doesn’t change the law, but it sets the table for a hearing before an administrative law judge on Nov. 7, 2023. The outcome of that hearing can be appealed to federal court.
If this multistep legal process concludes with the NCAA and conferences deemed joint employers, the ramifications would be profound.
The relevant federal labor law, the NLRA, doesn’t govern public universities, workers for whom are only employees and can only unionize if permitted by state law. But the NCAA and conferences are private entities and are governed by the NLRA. If the NCAA is a joint employer, the NCAA would be on the hook for college athletes, at least in certain sports, at potentially all NCAA member schools.
Those athletes could form a union which could in turn negotiate group licensing deals with EA, giving new meaning to “it’s in the game.”
