A lawsuit was filed. The Brander Group, who represent, I think, 54 Division I universities, are suing EA Sports because they did an end around, if you will, in releasing their college football. They want to release a college football video game for the first time in a decade. And the Brander Group is suing EA Sports because they did not include Brander Group in this licensing agreement.
I probably have screwed that up. Amanda Krstovich from Front Office Sports, she joins us on the Adam Gold show. This is not the first time the man has been on the show. At A. Krstovich on Twitter, she is the sports business reporter for Front Office Sports. All right, so I did a poor job of explaining that. So tell me where we are. Brander is suing EA Sports for, as I use the football metaphor, running an end around on their group licensing agreement, correct?
Yes, well, first of all, thanks for having me on again. I actually think you did a pretty good job explaining it. It's kind of a strange lawsuit, at least to me, in the sense that the controversy surrounding the EA Sports college football game right now is about whether or not the athletes are going to be paid, you know, what is considered fair market value for the use of their NIL. But as you pretty eloquently in my opinion, that's not what the lawsuit's about. The lawsuit is the Brander Group, which is a group that facilitates group licensing deals. They have deals with schools to sort of couple the school's intellectual property with the athletes NIL to create products that would use both, right? And they're saying that EA Sports did not include them in the negotiation. The lawsuit said they have multiple conversations over the past couple years with EA Sports, and that ultimately EA Sports just cut them out completely, hired a different company called One Team Partners to quote-unquote facilitate the deal. And now it's like an opt-in agreement where the athletes can go straight to EA and opt-in or not. And the Brander Group is saying that that is against the law. There is a legal phrase that I probably will not pronounce correctly, so I will not say it because I don't know what it means, but that's the gist of the lawsuit. Amanda Krasovich from FrontOfficeSports.com is joining us here. So I'm almost gathering here, I could be wrong about this, and it almost seems like Brander is not suing on behalf of the athletes, but more so on behalf of their ability to represent the athletes.
Correct, correct. That seems shady to me. Brander is suing for their own interest because they're saying that they have exclusive agreements to negotiate deals on behalf of these schools and their athletes, and that EA Sports is ignoring that. As a caveat, though, I will say that they came out last week saying that they were concerned about the deal, and I spoke with their CEO, Wesley Haynes, who said that he was concerned that athletes were not going to be getting what they deserved in the deal, that they were not going to be paid royalties, according to multiple reports, which is totally against the industry standard.
And there were some other aspects of the deal. I think the most charitable explanation of how they're using this lawsuit to quote-unquote fight for athletes' rights is to just bring up the fact that in the negotiation for the deal, athletes themselves were not represented, which is true. It is interesting, though, that this is how we started the whole NIL business, with the EA Sports, not the football video game, it was a basketball video game, and it was a historic basketball video game that really threw this entire industry into a tizzy.
I'll just use that. And the games went away, because they could not come up with an equitable way. They weren't allowed to compensate the athletes at the time.
Now we sort of have this breakthrough. And I know Jason, I think Jason Stahl from the College Football Players Association has also spoken out about this. But my question is, are there credible, is there credible data that says what these athletes are worth to a video game like this? Because I know the deal is a $500 flat fee and no royalties. Is there data that says or proves as much as it could that they're basically undercutting the market? Yeah, so I think the question of the flat fee is what everyone is focusing on.
And to me, that's the wrong question. The right question is to look at the quote unquote industry standard for the structure of these deals, right? So my question is, why is a college athlete not worth royalties, whereas a professional athlete is, for the same for the same product, right?
We have FIFA, we have Madden, right? All those players are paid royalties. If you want to get into a conversation about the percentage point of the royalty, how much the royalty is, right?
That's another conversation for another day. But there needs to be some sort of royalty in order for this deal to be considered industry standard period, full stop. And the other thing I'll say is that people are saying, well, you don't know how much EA is actually going to make from this college football game because it's the first one in over a decade.
That's kind of ridiculous to me. I mean, it's pretty clear how popular this game is going to be. And if you look back to over a decade ago, how popular the iteration of the basketball game was, you know, times that by 1015. I mean, look, I'm not an economist and I'm not a marketing expert, but I can I think it's safe to assume that a video game is going to be more popular today than it was 10 years ago, just by nature of technology. Right. So that's what I would say.
Not only technology, but you already alluded to it. We haven't had one of these in 10 years. It's going to be an absolute it's going to be a New York Times bestseller.
Amanda Kostovich is joining us here on The Adam Gold Show front office sports dot com sports business reporter. What is the time frame? What is the impact on the release of the game based on this lawsuit?
And if you're EA Sports, if it takes a while to get this out, wouldn't you be just better off financially just restructuring the deal? Who else loves summer but gets a little overwhelmed by all the plans? Daily Harvest helps me conquer the morning and kick off my day with intention through nourishing and delicious food all delivered to your door. Daily Harvest is the easiest way to get your daily serving of sustainably sourced fruits and vegetables without the shopping, shopping and post cooking cleanup. Go to daily harvest dot com right now.
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It's the iconic candy that's all about bringing people together to bond over colorful bite sized chocolate candies, delicious flavors and something else we all have in common fun M&Ms for all fun kind. Yeah, so a couple of things there. According to the lawsuit, the deadline for players in schools to opt into this deal is June 30th, right? And time is a flat circle to me as a college sports reporter these days, but that's coming up pretty quickly as much as I told. Nine days and and the game is supposed to be released in the summer of 2024, right?
Oh, gosh. It doesn't appear, according to some of the legal experts, that this lawsuit in particular should hold up the game itself because it's it's like between the brand or group and EA, right? It's like if the athletes want to hop in, they're going to hop in. If they don't, they won't. But I do feel like now EA has a bit of a conundrum on their hands. Do they want to hope that the vast majority of athletes don't care or aren't reading, you know, all the criticisms of the deals are being offered and they sign up for the game that proceeds as normal?
Or do they say, you know what? We really want to be part of a football game, but I mean, if we can get royalty, we could be getting checks for the rest of our lives. So why don't we wait?
Why don't we hold out? You know, I think it's up to what the athletes ultimately decide. Amanda Kristovich at a Kristovich on Twitter. I appreciate your time.
Front office sports, college sports reporter, sports business reporter. I appreciate it. And we'll talk again down the road, I am sure. Yes, absolutely. Thanks again. You got it. Thank you, Amanda.
Whisper: medium.en / 2023-06-21 18:32:06 / 2023-06-21 18:36:42 / 5
