Why the NFL’s Labor Strife Might Be the Best Thing That Happened to Madden (Kotaku)

[kjcheezhead]

Quote: Originally Posted by roadman

Exactly my point above. The NFL will still hand out an exclusive license or agreement to EA for a huge yearly deduction from what they are paying now. We both agree EA will be paying less, you just don't feel it will be an exclusive license because EA doesn't need one. EA may not need an exclusive license anymore, but that is the way the NFL operates. Doesn't matter if it's called an exclusive license or agreement the way the NFL sees it. It's my firm belief that the partnership between EA and the NFL won't go away. We'll see what happens, though, won't we?

The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

[LiquorLogic]

Quote: Originally Posted by mestevo

There will be give and take for sure, as there is in any business agreement, the license holds a lot of value exclusive or otherwise for both sides. The extension just ensures that the NFL won't be making a new deal after a season potentially marred by a lockout.

What value will the an exclusive license have, for EA, if there are no viable competitors ?

Quote: Originally Posted by roadman

Exactly my point above. The NFL will still hand out an exclusive license or agreement to EA for a huge yearly deduction from what they are paying now. We both agree EA will be paying less, you just don't feel it will be an exclusive license because EA doesn't need one. EA may not need an exclusive license anymore, but that is the way the NFL operates. Doesn't matter if it's called an exclusive license or agreement the way the NFL sees it. It's my firm belief that the partnership between EA and the NFL won't go away. We'll see what happens, though, won't we?

The reason the NFL loves exclusive licenses is because they're more expensive, and the NFL can make more money awarding exclusive licenses. The licensees love exclusive licenses because it guarantees them a hundred percent of the market share. What the NFL has done is price all of EA's competitors out of the market; they, the NFL, have eliminated any benefits to an exclusive license, so I see no reason why EA would pay for one again.

It doesn't matter how much the NFL loves exclusive licenses. In the gaming world, there's no demand for an exclusive license.

Also, there are really no benefits for the NFL, in giving out a cheap exclusive license, to EA when they could make more money awarding multiple licenses. If the license is very expensive, it will be exclusive; if it's not, it won't be exclusive because it won't make sense for the NFL.

Quote: Originally Posted by kjcheezhead

The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

Exactly.

What the NFL is going to have to is basically offer EA a license for a pennies on the dollar, make it non-exclusive, and award other publishers licenses whenever, if ever, another publisher decides to make a football game.

It would be stupid for EA to guarantee the NFL a large sum of money when they're the only publisher willing, or able, to produce an NFL game.

[roadman]

Quote: Originally Posted by kjcheezhead

The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

I don't see the disagreement here.

In the above posts, I've mentioned that EA will throw out a reduction on what they are paying now.

EA offers to pay $200 million per year instead of the $400 million/yr for the license.

That's where the give and take comes in.

Similar to the CBA talks going on. There will be an agreement at some point in time that won't disrupt the flow of football and video game football.

[roadman]

Quote: Originally Posted by LiquorLogic

What value will the an exclusive license have, for EA, if there are no viable competitors ? The reason the NFL loves exclusive licenses is because they're more expensive, and the NFL can make more money awarding exclusive licenses. The licensees love exclusive licenses because it guarantees them a hundred percent of the market share. What the NFL has done is price all of EA's competitors out of the market; they, the NFL, have eliminated any benefits to an exclusive license, so I see no reason why EA would pay for one again. It doesn't matter how much the NFL loves exclusive licenses. In the gaming world, there's no demand for an exclusive license. Also, there are really no benefits for the NFL, in giving out a cheap exclusive license, to EA when they could make more money awarding multiple licenses. If the license is very expensive, it will be exclusive; if it's not, it won't be exclusive because it won't make sense for the NFL.

It doesn't matter if you call it an exclusive license or an agreement, EA or any other company will still be paying upfront fees for using the teams, stadiums and any other trademarks.

At this time, I don't see any different than EA and the NFL hammering out an exclusive deal that is fair for both sides.

In the end, it's a business agreement between both parties. If the NFL wants to make it exclusive and EA says, we'll make it exclusive for $200 million per year, both parties will start compromising in getting a deal done. If the NFL can still make more money with $200 million with one company vs trying to make multiple deals with other companies and receiving less money, they will stick to an exclusive with the one company.

I still feel it's wishful thinking that the NFL will give up exclusivity in any market.

Why would you ruin a 9 yr old deal that you have going with a customer or vendor? Just because one party doesn't think there is a need anymore? That one party, EA, still needs to use all the teams, coach's, stadiums, trademarks and that still will come at a price that the NFL and EA will negotiate on.

[RGiles36]

Quote: Originally Posted by kjcheezhead

The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

This, I agree with. EA will hold many (if not all) of the cards as far as the price and negotiation. But make no mistake about it, they're not naive enough to lock into a non-exclusive agreement.

LiquorLogic envisions a scenario where EA will let their guard down and let a competing company slip in through the back door. It doesn't make any sense to me...

Quote: Originally Posted by LiquorLogic

It doesn't matter how much the NFL loves exclusive licenses. In the gaming world, there's no demand for an exclusive license. What the NFL is going to have to is basically offer EA a license for a pennies on the dollar, make it non-exclusive, and award other publishers licenses whenever, if ever, another publisher decides to make a football game. It would be stupid for EA to guarantee the NFL a large sum of money when they're the only publisher willing, or able, to produce an NFL game.

What do you mean it doesn't matter? It's HOW they do business!

I mean, to an extent, we're all just making presumptions. But I still say you're reaching to presume the NFL is going to "have to" make the next agreement non-exclusive.

I'd say you're scenario is the likeliest if we're ever to see multiple NFL games again. But if this were Oddsmakers (PTI), I'd put the odds of this scenario occurring at 7%.

[roadman]

Quote: Originally Posted by rgiles36

This, I agree with. EA will hold many (if not all) of the cards as far as the price and negotiation. But make no mistake about it, they're not naive enough to lock into a non-exclusive agreement. LiquorLogic envisions a scenario where EA will let their guard down and let a competing company slip in through the back door. It doesn't make any sense to me... What do you mean it doesn't matter? It's HOW they do business! I mean, to an extent, we're all just making presumptions. But I still say you're reaching to presume the NFL is going to "have to" make the next agreement non-exclusive. I'd say you're scenario is the likeliest if we're ever to see multiple NFL games again. But if this were Oddsmakers (PTI), I'd put the odds of this scenario occurring at 7%.

This is what I agree with.

[LiquorLogic]

Quote: Originally Posted by roadman

Why would you ruin a 9 yr old deal that you have going with a customer or vendor? Just because one party doesn't think there is a need anymore? That one party, EA, still needs to use all the teams, coach's, stadiums, trademarks and that still will come at a price that the NFL and EA will negotiate on.

Because the customer or vendor (EA) no longer sees a benefit to the deal. Advertising is a big part( most likely the biggest part) of the NFL's revenue stream. EA is advertisement for NFL, and I doubt the NFL will just forgo awarding EA a licensing deal.

How much sense does it make to force something down a customer's throat ?

[ryan36]

Quote: Originally Posted by LiquorLogic

How much sense does it make to force something down a customer's throat ?

TONS. Tons and tons and tons and tons. The game still sells, EA has no competition, and the NFL gets its money from ONE source, and is able to tell that source what can and cannot be in the game. It's easier than doing that for 2 to 4 titles every year.

Yes, LiquorLogic doesn't like Madden. You're a minor annoyance to them, if they know you exist. Which they don't. A game going exclusive means you either like their product or don't buy it, but you can't buy another one...

In fact, unhappy customers are the reasons FOR the exclusive license...not happy ones.