EA Sports Football Reboot Sparks $500 NIL Debate
There’s a new twist in the name, image likeness era as college football players for the first time will be featured in the new EA Sports video game in 2024.
OneTeam Partners, which facilitates group licensing deals with college athletes, has signed a licensing deal with EA Sports that features a $5 million pool for roughly 10,000 eligible FBS players that will pay $500 to each player who opts into the agreement. The payout is a pre-set fee with no royalties, according to multiple sources, with no room to negotiate for additional cash. It doesn’t matter if the football player is a backup safety at Clemson or a star running back at Troy University.
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It might be the first major group licensing product deal, including jerseys and trading cards, among American athletes that doesn’t include royalties as part of compensation.
The deal has raised eyebrows around the college sports industry, especially since it took more than a decade for the game to hit the shelves again. Some argue that EA Sports is the clear winner of that agreement with $500 being well below the value that many college athletes provide their schools, while others believe the payout is fair since many players would opt-in into the deal even if EA Sports offered zero.
“There’s significant value that goes beyond the monetary amount,” Luke Fedlam, NIL expert and managing partner at athlete educator Advance, said in a phone interview. “$500 is still value to many student athletes, so to be able to earn compensation and have the benefit of being in a video game that will be played by millions is an exciting opportunity.”
Fedlam hopes eventually there’s a firm revenue sharing component as part of the deal, with growth potential instead of a flat one-time payout. He also expects more high-profile, influencer players to negotiate separate deals outside of the general fund, especially if they’re going to be part of the game’s marketing campaigns, such as being featured on the cover.
It would be a similar approach to EA Sports’ approach with its Madden franchise, as cover athletes receive additional payment.
EA Sports’ popular college football game was discontinued in 2013 after the Power Five conferences denied trademarks to EA when the NCAA ended its agreement with the publisher. In multiple lawsuits, the NCAA and EA were both accused of profiting from student athletes without providing compensation. Former UCLA star Ed O’Bannon’s class action lawsuit victory over the NCAA in 2014 spelled the demise for the game, as the courts ruled that not paying athletes for their appearance violated antitrust law.
With NIL rights now part of college sports, EA Sports is rebooting the franchise next year, with the ability to increase the realism of the game without being limited by likeness restrictions. While the payout will continue to be debated, some NIL experts believe the deal is an example of how group licensing deals are structured to benefit the collective and not merely the stars.
“There’s something to be said about being on an equal playing field, and fairness around everyone being able to participate in some of the higher profile deals that elite athletes participate in,” Bruce Siegal, an attorney at Greenspoon Marder and former CLC general counsel, said. “It’s not a me deal, it’s a team deal.”
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