Travicity
02-15-2011, 11:08 PM
The NFL has cut EA a break, reports SportsBusiness Journal, reducing the Madden maker's licensing fee by an undisclosed amount for the next football season, which remains in jeopardy as the current collective bargaining agreement between the league and the players' union is set to expire March 4 and, so far, renegotiations have been futile. If a new CBA is not drawn between the two sides before the current contract expires, it could result in a work stoppage -- in other words, no football come fall.
While such an outcome wouldn't prevent EA from releasing Madden 12 in early August (the series' traditional launch window leading up to the start of the NFL regular season), it could certainly devalue the expensive NFL-related licenses that EA has secured. Last October, anticipating such a scenario, EA reportedly requested a $30 million dollar discount on its payment owed to the NFL this year. The five-year deal inked in 2008 between the two sides is believed to be worth "well into nine figures" -- that's hundreds of millions -- and is likely the NFL's most lucrative non-TV contract, according to SBJ.
"For one of our core partners in a difficult environment, we say let's look at this, and maybe it makes some sense to extend something out longer and give our partner some relief in the short term, but gain something on the back end," Jacksonville Jaguars owner Wayne Weaver, chairman of the NFL's business ventures committee, told SBJ, alluding to the nature of the restructured deal with EA. According to SBJ's sources, EA has been granted some form of relief for this year's fees, and its NFL exclusivity deal has been extended one year through the 2013-14 football season.
EA maintains a separate, concurrent contract with the NFL Players Association for which the players' union receives $30–40 million, annually (according to the union's Labor Department filings), for the publisher's right to use NFL players in its games. It's as yet unknown if EA has sought to reduce its fees owed to the union this year or extend the deal another year to remain consistent with the companion contract with the league. EA declined our request to comment on its NFL-related licensing agreements for this article.
JS
While such an outcome wouldn't prevent EA from releasing Madden 12 in early August (the series' traditional launch window leading up to the start of the NFL regular season), it could certainly devalue the expensive NFL-related licenses that EA has secured. Last October, anticipating such a scenario, EA reportedly requested a $30 million dollar discount on its payment owed to the NFL this year. The five-year deal inked in 2008 between the two sides is believed to be worth "well into nine figures" -- that's hundreds of millions -- and is likely the NFL's most lucrative non-TV contract, according to SBJ.
"For one of our core partners in a difficult environment, we say let's look at this, and maybe it makes some sense to extend something out longer and give our partner some relief in the short term, but gain something on the back end," Jacksonville Jaguars owner Wayne Weaver, chairman of the NFL's business ventures committee, told SBJ, alluding to the nature of the restructured deal with EA. According to SBJ's sources, EA has been granted some form of relief for this year's fees, and its NFL exclusivity deal has been extended one year through the 2013-14 football season.
EA maintains a separate, concurrent contract with the NFL Players Association for which the players' union receives $30–40 million, annually (according to the union's Labor Department filings), for the publisher's right to use NFL players in its games. It's as yet unknown if EA has sought to reduce its fees owed to the union this year or extend the deal another year to remain consistent with the companion contract with the league. EA declined our request to comment on its NFL-related licensing agreements for this article.
JS