NFLPA Explains Position on the Exclusive License

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Posted March 1st, 2013 at 5:30 pm

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As the NFL and EA approach the final year of the current exclusive contract to produce league licensed video games all eyes will be on whether an extension is reached between the two parties. Considering that extensions to the deal have been reached in February 2008 (for three years) and February 2011 (for one year) news on that could be coming soon.

Assistant Executive Director of External Affairs for the NFLPA, George Atallah, actually addressed the exclusive license in an AMA on Reddit yesterday. Since the exclusive license was signed in 2004 no one representing the league has publicly addressed the frustration that many felt as market options were taken away leaving only Madden. 

Q: George, I wanted to ask you about the madden exclusive license. Do you plan to end this soon? The the 9-yr exclusive license ends this year and the fans are sick and tired of not having a choice of picking a nfl game to play. Madden is becoming stale and the community wants 2k sports to have a chance to make video games again. Nfl 2k5 was the best representation of the nfl to this date…. Please make this happen Mr. Atallah. Thanks for your time

Atallah: We have an agreement with EA and Madden. I have heard some opinions like yours, but honestly, EA is one of our best partners. I know they hear some of your input as well and work to improve the game every year.

Q: Sorry Mr. Atallah, but I will not purchase another ea nfl licensed game until the consumers are ale to have a choice again. The consumers should be in your best interest sir.

Atallah: I’m sorry to hear that. One thing to clarify though, my job and the job of the NFLPA, is to ensure that the players’ interests are top priority. I know that might not be the most popular answer, but it’s our mission.

From the Player’s Association side it’s all about money. From the NFL side it’s about money, control, and image. Unfortunately for those hoping for change all those considerations suffer from the league’s perspective with an open license compared to an exclusive one.

As discussed following the most recent extension the indications are that EA will push for a much more favorable deal this time around and that could explain why no agreement has reached even as expiration begins to near. The other extensions came a year earlier in the process. EA isn’t going to accept the same terms as they did in 2004 and 2008. They had to be credited upwards of $30 million for the year of Madden NFL 12 (strike-threatened at the time) for them to agree to the one year extension. They didn’t want it otherwise under the previous structure.

The NFL has created a situation where EA Sports is their only option if they want to continue the exclusivity they prefer throughout all reaches of their business. EA is well aware that they are in the driver’s seat as no other company would be prepared to take on such a monumental project as building an NFL game and have it out in time to avoid missing a season and meet consumer expectations. It’s a similar conundrum as MLB faced as they reduced terms significantly so that 2K Sports would put out MLB 2K13 – otherwise they would have been left with no representation on the console with the biggest user base in America.

The likelihood still is that an agreement will be reached but with terms far more favorable for EA. The other scenario might be EA deciding to gamble and let the deal expire leaving the NFL in a position where they would have to open up the license and consider making smaller deals with them and potentially other companies. At this point EA may feel that the brand would be unthreatened by competitors after having secured the marketplace for themselves since 2005. They also have the benefit of the incremental development advances that have come over that time while others have been forced to sit things out – leaving them to build essentially from scratch – as the transition to the new generation of consoles approaches.

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  • Keith.

    This deal’s been a big financial loser for EA. There’s no other way to explain how EA’s lost $2.5 billion over the last 5 years. EA banked on Madden’s sales going up, and instead they keep going down just about every year. I’m at the point where I barely even miss having an NFL game anymore.

    • princepointe26

      Ahhhh trolling once again I see. lol. EA is “losing” money on Madden? Hey I have a bridge to sell you over here.

      • Keith.

        Thanks for your intelligent contribution to the discussion, prince.

        • Khadeem

          seriously though they cant be “losing” money from madden…they are making net income from madden so they cant be “losing” money…sales might have fallen, but the price of production is not higher than the revenue they have received….be a little more accuarate when throwing stuff out there Keith

          • Keith.

            They used to just as many if not more copies before signing the enormously expensive exclusive license. They expected sales to go up and they didn’t. The license adds a huge cost they didn’t have to pay before. This isn’t really that difficult to understand.

          • Distorted

            So they aren’t losing money yet, but you’re assuming that they are going to?

            Also the license falls into the price of production, and they’ve been making a profit for a while.

          • Khadeem

            this Keith guy is just blowing smoke

          • Keith.

            Took me all of 5 seconds on google, Khadeem, to find this link. Let me know if you’d like any more.

            http://facepunch.com/showthread.php?t=1236051

          • Odie24

            In the red means losing money in a fiscal year. Not projected. It’s an actual loss. EA hasn’t had a profitable year since 2006, if I recall. Profitable year is when you make more money than you spent in a fiscal year. This means being in the black.

          • Khadeem

            can you show me the graphics proving that they are losing money…is ea in the red for madden 13…be serious man

    • mcmax3000

      “There’s no other way to explain how EA’s lost $2.5 billion over the last 5 years.”

      There are a lot of ways (*cough*Old Republic*cough*) to explain their losses. Sure, the Madden deal was part of that, but they didn’t lose $2.5 Billion on Madden alone.

      • Keith.

        I agree that Star Wars was a big flop, and that it has had its share of company from other EA games (GS2, SSX, TW13, NBA Live, etc.). But EA’s financial woes date back to at least 2008, and Madden’s been the one constant when it comes to under performers throughout that time.

    • http://www.facebook.com/people/Iown-You/100000775565221 Iown You

      The people who’ve thumbed down Keith’s comment don’t understand a key point: EA as a company has taken serious financial losses over the past 8+ seasons since getting the exclusive. EA’s stock value is now a fraction of what it was in 2004. EA spent hundreds of millions of dollars to get the license and have had a tremendously tough time making up those costs (recoup).

      However, EA had to snag the exclusive, otherwise Madden probably wouldn’t even exist today. Love or hate 2K football, from a purely innovation standpoint EA simply could not compete with what NFL 2K5 brought to the table. Even the then previously EA ass-kissing media gave the nod to NFL 2K5, and that plus the sales of NFL 2K5 had EA shaking in their cleats for the first time since at least 1996, and it was funny because the same company they’d fired in 1996 (Visual Concepts) came back in 2004 and kicked their ass with a vengeance.

      The one thing we know for sure today, is that the exclusive license hurt:

      -EA

      -2K

      -Innovation in the American football gaming genre

      -Football gamers

      I have no respect for the NFL/NFLPA licensing department. They don’t understand that when it comes to safety, current pay, and after-career care, they have both a moral and a legal obligation to look out for the players. But when it comes to the things they sell to fans, they have an equally bound obligation to provide fans with the best options and best quality for the hard-earned money they spend. The fact that they don’t understand that and we can now see it in writing is exactly the type of thing that outlines what’s wrong with the NFL today. They care less about competition (look at the anti-competitive on-field rules in the game today), and more about packaging an overly-sanitized cookie-cutter experience that appeals to a less understanding, less informed mass audience. If Madden today is not the perfect example of that cookie-cutter mentality of the NFL these days, then I don’t know what is.

      • http://www.facebook.com/people/Michael-Buchko-Jr/1259580093 Michael Buchko Jr.

        Not to mention, 2K5′s price, brand new, was $20 as opposed to Madden 2005′s $40 like all the other popular games of that time. One thing 2K did amazing as well in that day was marketing.

    • Amen_Ra

      I’ve given up on NFL football

  • http://www.facebook.com/people/Travis-Cole/505426317 Travis Cole

    i wish they would allow competition to happen and for 2k to come back the nfl and nflpa and ea should be embarrassed of themselves for the products they have come out year with in and year out, presentation has always been terrible and no body gets what they want ever and yes i know if that were to happen than it would get boring fast to have the same game so ea better get their shit together i mean its 2013 for crying out loud

    • 7rill

      If MLB isnt embarassed enough by 2K for them to leave their arrangement then the NFL sure aint bothered by Madden.

      • http://www.facebook.com/people/Michael-Buchko-Jr/1259580093 Michael Buchko Jr.

        Why would the MLB be embarrassed by 2K? 2K12 didn’t look spectacular but every aspect of the gameplay was top notch, especially the non-broken batting interface that actually let you hit balls every now and again. The menus and presentation were also pretty great. The MLB Today Season thing was kind of a bust and their version of MyPlayer wasn’t as deep and thorough… but for someone like myself who only plays exhibition games, it was a lot better than The Show, personally.

        • http://pastapadre.com/ pastapadre

          Well, twice actually MLB threatened to void the deal with 2K (following 2K6 when the game froze after the 3rd innings and 2K9 when the whole product was a disaster). After those releases though the game settled into at least an acceptable level that the MLB seemed to be okay with.

  • Tyler Lyon

    I don’t ever see the NFL leaving exclusivity with EA. The Madden series will always outsell the competition after so many years of being the only game on the market. EA would also do their best to make sure the NFL didn’t make more than or as much as they would with the exclusivity.

  • Lorez

    Nice to have them admit its just money, but sure sounds like they think EA does them well beyond that too. Theyve always minimized the complaints theyve gotten about the license. Maybe its just that people dont care anymore. Madden is Madden and thats good enough for most.

  • infemous

    the issue with madden is what you call their so called advantage over competition; the fact that the game is being developed over a broken core.

  • http://www.facebook.com/nhon.do.96 Nhon Do

    My last new Madden game was Madden 06 for the PS2.

    I’ll keep waiting if I have to.

  • idc

    its not hard to stop playing madden, you just stop and pick up nba 2k. this will show that ea’s madden goes down in sales, and that 2k sports is doing something right with the nba franchise. plus i got addicted to nba 2k and draining threes all day so much fun!

  • baumy300

    Calling Madden a “football sim” is like calling Burnout a true racing sim.

    So sick of not having a choice and having to listen to EA claim to be “improving” their game when all they do is create broken new gimmick modes and think people will all of a sudden forget about the point of the game itself – Gameplay!

    Oh well. I wonder how the D-lineman in the NFLPA feel about being portrayed as uncoordinated vaginas that fall on their backs every time a 70 overall tackle sneezes on them?

    Piss on EA!

  • wolf onatshirt

    Well, maybe we should boycott EA’s next game, considering how they duped us year after year on how they’re going to put out patches for us and never fix the game they made! George Attallah Akbar can eat a phat dick for all I care.

    If we stand off on buying on the midnight release at the least, wait for it until December, if you really have to buy a football game because realistically December is about the time they fix about 30% of the bugs and glitches, it will send a clear message to both those money hungry jerk offs EA and NFL.

    Let’s give it to them this time people. ENOUGH IS ENOUGH.

    • fed_cc

      It’s futile. People have called for boycotts every year and there simply isn’t enough to make even a dent. Most years sales go up. There just isnt such a huge group of people upset about this as some believe. People either buy and like the game for what it is or pass and spend their money on something else. No point going crazy over it.

      • turkey86

        Sad, but extremely true fact.

      • wolf onatshirt

        Actually, looking through the sales statistics year by year since 2005, sales have dropped significantly. Sure, the boycott won’t be something big, but it will have some significance. Enough to make corporate step back in their whole M.O.

        There needs to be an open market. It’s bad business for EA. It’s a win win situation. Let NFL 2k come back and let the best man win.

  • clubsteve

    the bottom line is competition brings out the best in a developer…..the best nfl video games were made when this happened. not only that, wouldn’t more exposure benefit the nfl AND the players? don’t the “players”, some of which play madden themselves, want to see competition bring out the best game possible?

    • http://pastapadre.com/ pastapadre

      The exclusivity of the license brings in twice as much money as when it was open and 2+ paid in. The more publishers with the ability to produce an NFL game, the less each would be willing to pay for it due to diminished returns.

      • clubsteve

        pasta, with that being said, doesn’t that put ea in the driver’s seat and make it much easier to get a better deal on the license?

        • http://pastapadre.com/ pastapadre

          Given the current market conditions absolutely, but certainly the NFL is going to negotiate for as much as they can get either way.

      • http://www.facebook.com/people/Iown-You/100000775565221 Iown You

        The NFL can command higher rates, even higher per unit and they would easily get it from multiple companies, so I don’t think the segmentation ruins returns entirely. I’m sure you remember there were some really big names bidding on the NFL license back when it was up for grabs, and many of them could certainly pony up enough to make this just as worthwhile non-exclusively if not more depending on how well EA can broker deals.

        That said, what I remember an NFL Licensing Exec saying back in the 00′s is that having the exclusive makes it easier for them to manage. He pointed to the fact that at one time there were 10+ NFL games out there in any given year across multiple platforms and it became a hassle for them to manage all of the responsibilities.

  • TRUTH

    you guys are idiots, he’s in charge of the player’s association, what the hell does that have to do with the Exclusive license? Talk to Godell, Of course he is going to give you that answer. God this issue is too old man. This crap happened when I was a junior in high school that’s how long ago this was. Let it go peeps, ain’t noting gonna change.

  • radja

    i totally understand they want to make money first and foremost for the players. but at the same time total disregard for the customer is plain stupid. i don’t think he has total disregard, but it was dismissive. i think they feel that the group complaining is not large enough to be concerned about. if they felt it was, they would have more respect. they realize with each passing year, their is a new group of customers who are too young to remember nfl 2k5..

    i don’t think ea is losing money on the actual sales of madden to the public. they sell too many games for that. however, they are not making as much as they used to because of the exclusive deal and declining sales. so this means investors are not getting the returns they used to, so the investors are not as interested and so they are not buying stock. so in this way, madden is contributing to ea losing money.

    but for nfl, they are still getting their money. so they don’t care what happens to ea. they have the product people want. if ea dies a flaming death, (it won’t but if it did), some other company will step up and they will get their money again.

    after all these years, i do feel that ea did the smart thing with the various licenses. ea is still alive. other companies have gone under. they have had the upper hand in several areas with guaranteed yearly sales in soccer, golf and football. with so many types of games needing three year cycles, its very helpful to have the yearly sales from sports games to keep the doors open.

    • Keith.

      Last quarter, which included the lucrative Christmas season, Take 2 had a profit of $78 million while EA lost $45 million. Anybody who thinks EA made the “right” decision has blinders on.

      • radja

        if you think that ea is losing any money on the exclusive licenses here is the report which discusses fifa 13:

        http://investor.ea.com/releasedetail.cfm?ReleaseID=736891

        http://files.shareholder.com/downloads/ERTS/2347650520x0x609756/f8bc4090-676b-44ee-b7ff-5ffa6c8c2a70/Q2FY13_Earnings%20Release_FINAL_withPressTables.pdf

        fifa alone makes the easports division profitable. the only true drain on the easports division was nba live which failed to produce a game.

        for madden, they may not be making as much money as they could, but they are definitely not losing any. any extra cost of the exclusive license was undoubtedly partially passed on to both the retailers who sell the game and the advertisers who pay for in-game ads.

        game companies have been falling buy the wayside lately. anyone of them would love to have had the fifa or nfl exclusive license. they would still be in business.

        • Keith.

          I listened to the EA investor call and didn’t hear Riccotello or anybody else brag about Madden’s profits — in fact they barely mentioned Madden. Instead, they singled out Fifa and Battlefield, i.e., a year old game. Even with the “success” of those 2 games, EA lost $45 million for the Christmas quarter, which says it all right there.

    • http://www.facebook.com/people/Michael-Buchko-Jr/1259580093 Michael Buchko Jr.

      2K now also has the WWE license to make up for what they’re losing with baseball and if they secure the rights to Twinkies they will be all set.

  • http://www.facebook.com/people/Michael-Buchko-Jr/1259580093 Michael Buchko Jr.

    The NFLPA would rather let the deal expire and have no game than to let consumers have a decent one.

  • GridironJoey

    Fine, renuew the deal again, but do us a favor, stop calling your game NFL football, it’s not, it’s Madden, a similar game to football, with different rules and principals…It’s not Football!!! It’s Madden!

  • Tom

    there is def a possibility that they avoid the license all together and go for the generic, non exclusive license instead…. it would give 2k a chance…

  • Tom

    pasta this seems like the interview was via comments or the person speaking must have had serious anger towards the rep…. idk any reporters who would give so much attitude when asking a question

    • http://pastapadre.com/ pastapadre

      I linked to it…was an “Ask Me Anything” on Reddit. That’s how those things go. It’s like if people submitted questions for someone to answer in the comments here.

    • http://www.facebook.com/jetvenom35 Jeffrey Mason

      2k didnt have all those glitches like madden i could lose a game knowing i didnt get glitch madden glitches… nano,rocket catch,dnf glitch, qb cat walk, disconnect glitch,motion route…..the list goes on dating back from 2003 that i know on all systems.i just want gamers like us to pay for a good product coming out of the box.

  • CeeGee

    With no other company willing to pay the Licensing fee as it stands now, the NFL is going to have to lower the cost of the fee if they want to stay exclusive with EA… That being said, as much as it pains to even think about it, I don’t see EA relinquishing their exclusive license any time soon… They LAST thing EA wants to do is give people the option of another NFL game, whether is be a 2K game or some other developer…

  • the biggest losers

    The ones who lose in an exclusive deal are the END USERS. EA can put whatever THEY WANT in the game and not listen to what THE BUYER WANTS. If there was competition, EA might have to consider what us buyers would like to see. EA Fucked us last year when they shovelled CC down our throats.

  • http://pastapadre.com/ pastapadre

    It’s estimated that the current exclusive license brings in twice as much as when multiple companies were paying in. The more companies are involved, the less the worth of each one having the license is. They take into consideration competition, market share, increased need for marketing costs, ect.

  • Khadeem

    ok buddy…thank you i appreciate your efforts

  • http://www.facebook.com/jetvenom35 Jeffrey Mason

    2k didnt have all those glitches like madden i could lose a game knowing i didnt get glitch madden glitches… nano,rocket catch,dnf glitch, qb cat walk, disconnect glitch,motion route…..the list goes on dating back from 2003 that i know on all systems.i just want gamers like us to pay for a good product coming out of the box.

  • http://twitter.com/VAStreamMonster Marty

    Pasta, you’re way off the mark. The ball is in the NFL’s court, not EA’s. It’s preposterous that you would even make that analysis.

    • http://pastapadre.com/ pastapadre

      You don’t understand the situation then.

      Just today, DirecTV is threatening to pass on renewing the exclusive license for Sunday Ticket. They don’t feel the costs are worth the benefits anymore.

      Same could be said for EA. The price of the license, negotiated in 2004, does not make sense anymore with development costs and potential sales numbers.

      Difference is the NFL could go to the cable companies to get another exclusive for Sunday ticket. The NFL doesn’t have any video game company they can go to that could turnaround and produce a high level product in 1 or 2 years.

  • MVP

    I see everyone wants competition for EA but when Live makes an attempt to come back it sucks and theres nothing good about it. Madden hasnt been any worse than 2K selling us the same damn basketball game since 2010. Everyone does it. We all talk shit but when the game is released 70% of gamers will still buy it. Get over it.

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