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NCAA Ordered to Talk Settlement in O’Bannon Case; Eventual Resolution Will Determine Future of College Sports Video Games

Last week the judge in the Ed O’Bannon class-action case vs the NCAA ordered the two sides to enter settlement talks. Naturally questions have started to come in about whether this could accelerate a return of college football (and other sports) video games.

There is no longer a video game element to the case – although Sam Keller has continued to argue that he was not a part of the earlier settlement that got Electronic Arts and Collegiate Licensing Company out of it. A conclusion to litigation that would provide an outline for players to be paid (whether from share of broadcasting rights, personal endorsements, and/or merchandising) could open the possibility of video games back up. 

It’s very unlikely that a settlement will be reached which would mean the case proceeding through the lengthy process that with appeals could be five years away from a conclusion. There is no requirement that the sides attempt to reach one in good faith – just that they attend the required mediation. Even if a the two sides came to a settlement the specific terms would be critical.

EA could manage paying collegiate athletes $50-$100 a season. That’s essentially what they did with the $40 million settlement. With NCAA Football establishing a successful Ultimate Team mode they could afford additional costs especially when being able to promote real players officially in the game would likely increase sales of the product. Going much higher than that though, or having a system where players negotiate their own appearance fees, could make it more difficult to financially justify.

Earlier/Summary Below

The player likeness lawsuit against the NCAA, CLC, and Electronic Arts is the culmination of two high profile filings that were combined as led by Sam Keller and Ed O’Bannon (and O’Bannon now heads it up). It alleges improper use of player likeness through various forms of merchandise and media including video games in which the parties in question conspired to avoid paying players for their rights. Some interesting details and claims regarding the case at hand were revealed when EA was reentered as a defendant after initially being dismissed.

EA originally won a previous case regarding player likeness with the courts ruling video games are artistic works rather than commercial speech and therefore protected by the First Amendment. The Supreme Court in 2011 established forms of media, producing expressive works of art, are not subject to judgments based on incorporating someone’s name or likeness. That dismissed case however, involving Ryan Hart, has resurfaced after an appeals court reversed a decision based on that argument.

Recent uncovered emails have shown that NCAA representatives were well aware that players in games were based off real-life players. At one point the NCAA and EA had nearly reached an agreement to have actual player names included in the products. The EA Locker / Roster Share feature was a fallback option. With momentum clearly on the plantiffs’ side NCAA reps have begun to publicly express concern over the future of collegiate sports. A former EA Sports producer admitted players in NCAA games were based off real athletes.

The discovery of Tim Tebow’s name being in NCAA Football 10 could throw another wrench into EA’s series of arguments. Depositions from former Alabama wide receiver Tyrone Prothro and UConn basketball guard Tate George support the defendant’s reasoning for denying class action certification. The class action hearing resulted in the judge heavily questioning the legitimacy of a potential class and insisting a current athlete be involved. The judge required current athletes be added as plaintiffs for that party to have representation if the case is certified as class action. Six current college football players were added as plaintiffs in mid-July.

EA is now arguing to be dismissed as a defendant in the suit. A major defense for the company however was recently struck down by an appeals court.

This consolidated case in California if certified as class action would go to trial – barring a settlement – and ultimately be the determining factor of how the NCAA proceeds in the future handling broadcasting rights, merchandising, and video games. Should a negative result come down, which one analyst has pegged as being a potential loss of $1 billion for EA, it would likely not just end the NCAA Football series but also with it any realistic possibility of college sports games being made in the future. The trial now is slated to begin June 9, 2014. Appeals following a decision could extend the fight through 2020.

[RESOLUTION] EA and the CLC have settled the lawsuit. EA Sports will no longer produce a college football game. Getting out of the lawsuit only cost EA and CLC $40 million.

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