EA’s NFL license exclusivity in danger

[The Sim God]

Quote: Originally Posted by The Sim God

can someone copy & paste the blog/article in this forum?

Quote: Originally Posted by shad_moss93

The day EA signed a contract with the NFL for Madden to be the only NFL sanctioned football game was a sad day for gamers everywhere. While the Madden franchise hasn’t disappointed too much over the years that it has truly been the only game in town, it still cuts back on the variety and choice of games one can pick-up that involve the NFL. Plus, some of us just randomly hate Madden and would really like to have the option to play something else. I’m not naming names here, but let us just say his first name is M_tthew and his last name is _azak. Well now Mr. _azak finally has some hope that he can once again enjoy the NFL outside of EA’s grasp. GamePolitics is reporting that a new case in the supreme court may make EA’s exclusive NFL rights illegal. The case is American Needle vs. New Orleans Saints, et al. and should the court side with American Needle it would put EA (and Take-Two, who has exclusive third-party rights to MLB) in violation of federal antitrust statutes. In layman’s terms it means they would be seen as attempting to make a monopoly, which, outside of board games, is very illegal. A blog that follows the supreme court called SCOTUSblog, lays it out for us: The NFL used to license American Needle to sell hats that bore the logos, the names or other insignia of pro football teams… But, in 2000, the NFL opted to solicit bids for an exclusive license to produce caps and other headwear. Reebok won the bidding, and in 2001 got an exclusive ten-year license. American Needle’s license was not renewed. So it sued the NFL, all of its teams, NFL Properties, and Reebok. American Needle’s case was thrown out by lower courts… “The [Supreme] Court has stated, on more than one occasion,” American Needle asserted, “that application of the Sherman Act to professional sports teams is wholly consistent with Congressional intent…” This is basically what happened to 2K Sports when EA signed its exclusivity deal with the NFL. Thus if it is illegal for the NFL to do it with clothing than it is illegal for them to do it with games too. GamePolotics also reports that this case has been brought up multiple times in the class-action lawsuit Pecover vs. Electronic Arts. So this case is definitely on EA’s radar.

thank you!

[FSU_Animal]

Posted by thoughts in the Sports Gaming New section. Saw this thread, wanted to include it here, too.

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The NFL had every right to sign an exclusivity deal with EA Sports because it's not a monolopy on the game of American football. However, because of the recognition of the National Football League nationwide as well as with their attempts to go global, this could be seen as collusion by both parties (EA Sports and the NFL).

Before my head gets bitten off for even thinking that this could be perceived as collusion, let me at least try to explain.

The NFL is nationally recognized as THE highest level of American football and now they are attempting to globalize the sport even more by scheduling games in London, Mexico, China, Canada, etc. The truth is that the game of American football could never be legally monopolized but at the same time, the NFL has every right to forbid the use of their image without consent. However, the exclusivity agreement between EA Sports and the National Football League could be considered as collusion because it gives EA Sports an unfair advantage over any other sports gaming designer. A capitalistic economy thrives off of fair competition.

Madden became the best selling sports game to ever hit the market not because it contained the likeness of John Madden and his name on the cover but because it gave the fans of the NFL a chance to live in their own fantasy world where they took control of the destiny of their favorite football teams and football players. John Madden was just a tool to help sell the game but it was not long before we started seeing NFL Player's on the game ... which of course required an agreement with the NFLPA. At the same time, 989 Sports began to spit out their football games using the likenesses of NFL Players as well (I think they used players that did not belong to the NFLPA but were still part of the NFL). Then NFL2k Sports (isn't that their name) and even Microsoft (what was that game called again?) began selling games that utilized the NFL image and players likenesses as well. Every year Madden was getting better and better but was it because their programming and developing talent was getting better and better? That probably had some effect but in our capitalistic economy, what drove EA Sports to keep putting out a better Madden NFL football title? My theory which belongs to roughly 90-99% of the fans of Madden is that because there was competition. When the NFL and EA Sports decided to sign an agreement that stated that only EA Sports was allowed to use their nationally and globally recognized image in their future Madden football titles, that naturally drove out the rest of the competition because trend analysis showed that there was no interest in American football video games if the NFL image was not put on the product. Do you believe people would have bought an NAFL Football video game even if the game was 100x better than the latest Madden NFL title? There might be a select few that would but the majority vote would still pick up the latest Madden NFL title even if the game played like Madden 2000 but with next-gen graphics because of who's logo is on the box.

Let's think about it from another point of view. As a coach for pee-wee football, if I went up to my group of 9-11 year old players and said Player X is the quarterback because everyone likes him and only he will get to carry the ball and score points. Do you think the rest of the players would like that? Do you think they'll try harder to earn the play the position they've always wanted to play? No child will try hard if he's not given the opportunity and fair shot. The NFL and EA Sports have not given any other sports gaming company a fair shot in selling their video game because other football leagues outside of the NFL are hardly recognized in comparison to the National Football League.

EA Sports' "Madden NFL"
Sega's "NFL 2k"
989 Sports' "NFL Gameday"
Microsoft's "NFL Fever"
Acclaim's "Quarterback Club"
Sega's "Joe Montana Football"

EA Sports' "NFL Street"
Midway's "NFL Blitz"

Recognize alot of those games? Those are just a majority of the football video games that featured the NFL in their games. Only EA Sports remains in the NFL game. Midway continues to make their football title but now it's without the "NFL" in their game. Sega 2k showed a hell of a lot of promise and did make an eventual return without the use of the NFL but they are using the likenesses of several hall of famers and past NFL players in their game and that has helped them out quite a bit. Microsoft's "NFL Fever" had promise but eventually dropped out because they just couldn't keep up with EA Sports and Sega 2k. Eventually it came down to EA Sports, Sega 2k, 989 Sports, and Midway. All EA Sports had to do was secure an exclusivity license with the National Football League and the rest of the competition would be crushed. EA Sports took advantage of the loop hole because in all honesty, they have not created a monopoly on the game of American football. Any honest sports video game developer has every right to create their own game of American football to sell on the market because you can't monopolize an idea.

[spankdatazz22]

Quote: Originally Posted by TheWatcher

While I agree that APF had a number of good things like the WR/DB interaction you mentioned, I think it comes down to how much you liked or disliked the overall product. Me personally, I can center on a number of things that were done right, but the number of things done wrong were just too hard for me to get past.

And there's no problem with that. In the end there was a lot wrong with the game. It did a lot right too, which even stand out two years later. I just disagreed with your inferring that APF is essentially what they would come up with if they were making an NFL game. Not that it's a horrible thing, because I've said for a while that if you add NFL teams and players to APF (along w/corresponding sig styles/attention to detail) the game becomes a lot more appealing. I think in approaching these games there needs to be realistic expectations. I'm not sure what will become of this lawsuit, but if for some magical reason exclusivity was lifted and 2K could make a game, I'm sure many would be trying to make a direct comparison to a 1st/2nd year effort to what will be Tiburon's 5th yr next gen effort. It's just how people think. While direct comparisons are understandable, people should have the ability to consider that there are caveats and it isn't a level playing field

[Bubstarr]

Ian and the Madden 10 team appear to be finally taking this franchise to the next level and it is a great thing. However, I must contend that competition breeds sustained excellence.

[Tito78]

Quote: Originally Posted by TheWatcher

Right now judging from APF, I don't think 2K is as capable of producing a great football game as they were a generation ago. Something happened to that team after the license situation, they were still talking about it in interviews about APF. It really hit them hard. Their skills have diminished, they're just not what they used to be. APF was such a sloppy game, I couldn't believe it. It just lacked so much polish.

It's unfair to Jugde Take Two's capabilities by looking at APF. Take Two clearly didn't put a lot of effort or resources into APF, as they weren't convinced that there was a market for a non-licensed football game.

The game play was still superior to madden 08 and 09; 2k5, which came out nearly five years ago, did things with inferior technology that Madden has yet to accomplish. Look at the other 2k sports titles in comparision to madden.

I think they know how to make a quality football game.

[TDKing]

Quote: Originally Posted by Bubstarr

Ian and the Madden 10 team appear to be finally taking this franchise to the next level and it is a great thing............

Maybe now we know why

[JonM]

"Any honest sports video game developer has every right to create their own game of American football to sell on the market because you can't monopolize an idea."

No you can't monopolize an idea, but you sure as hell can come close. Just buy up all the major league licenses. NFL, NCAA, Arena. The only one left (I believe) is canadian football, but the market there is so small you may as well go generic.

Now your average joe walks into bestbuy looking at his football game choices. Hmm, what will he buy? A game about football? Or a game about NFL/NCAA football?

[coogrfan]

Quote: Originally Posted by TheWatcher

I think he was speaking to an entities legal right to grant exclusive licenses. It's going to be an uphill because of that. The only strong claim that can be made is that the exclusive has damaged the market in a way that has caused an environment of anti-competitiveness. But I'm pretty sure EA/NFL will argue that anyone can still make a football game and be competitive. It's going to take a monumental effort from really talented lawyers to pull this off in our favor.

Just so.

Some background on this case:

American Needle initially filed suit back in 2005:

Quote:

"American Needle, Inc. v. New Orleans Louisiana Saints, No. 04 C 7806, 2005 WL 1126537 (N.D. Ill. May 5, 2005)"

For many years, the NFLP licensed American Needle and other clothing manufacturers to use NFL teams’ trademarks on hardware and apparel. In December 2000, however, the NFL, NFLP and NFL team owners decided to change their licensing practice of granting multiple trademark licenses. Under the new arrangement, the NFLP would enter into an exclusive licensing agreement with one company for the manufacture, sale, and distribution of headwear and apparel carrying the trademarks of the NFL and its member teams. Subsequently, the NFLP entered into an exclusive licensing agreement with Reebok. American Needle’s trademark license with NFLP expired in March 2001 and was not renewed.

American Needle brought an antitrust action against the NFL, the individual owners of NFL teams, the NFLP, and Reebok alleging that defendants’ agreement to grant an exclusive license for the use of NFL teams’ trademarks on headwear and apparel constitutes an unlawful restraint of trade in violation of Section 1 of the Act.

After a couple years of wrangling, the court ruled in the NFL's favor:

http://www.chicagoiplitigation.com/2...-act-purposes/

Quote:

Posted on July 24, 2007 by R. David Donoghue
Am. Needle, Inc. v. New Orleans Louisiana Saints, __ F. Supp.2d __, 2007 WL 2042764 (N.D. Ill. Jul. 11, 2007) (Moran, J.).
Judge Moran granted defendants, the NFL, NFL Properties and each of the thirty two teams (collectively the “NFL”) as well as Reebok International, Ltd. (“Reebok”), summary judgment on plaintiff’s Sherman Act antitrust claims, finding that the NFL acts through NFL Properties as a single entity for IP licensing purposes. For more than twenty years, NFL Properties licensed plaintiff to use various trademarks on its headwear. Plaintiff filed this suit after NFL Properties entered an exclusive license with Reebok, ending plaintiff’s license rights. Plaintiff argued that the NFL teams collectively, as well as in concert with Reebok, violated the antitrust laws by acting together through NFL Properties to license their collective intellectual property rights exclusively to Reebok (plaintiff argued that the NFL did not violate antitrust laws when it licensed to numerous parties, including plaintiff, through NFL Properties). But the Court held that licensing coordination between the NFL and its teams was equivalent to coordination between a corporation and its wholly-owned subsidiary. Because the Supreme Court treats corporations and their wholly-owned subsidiaries as single entities, there could be no conspiracy and no antitrust violation.

American Needle's lawyers appealed the ruling. The case wound up in the U.S Court of Appeals for the Seventh Circuit:

http://www.chicagoiplitigation.com/2...single-entity/

Quote:

Am. Needle, Inc. v. New Orleans Louisiana Saints, No. 07-4006 (7th Cir. Aug. 18, 2008) (Kanne, J.).*
Judge Kanne, writing for a unanimous panel, affirmed Judge Moran's opinions holding that the National Football League ("NFL") acting through its NFL Properties entity was a single entity and, therefore, dismissing plaintiff American Needle's Sherman Act antitrust claims.
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The Seventh Circuit explained that sports leagues are difficult to classify because they display elements of a single entity, as well as elements of a joint venture made up of independent owners. The Seventh Circuit, therefore, determines whether a sports league is a single entity "one league at a time" and "one facet of a league at a time." In this case, the NFL was a single entity because for the purpose of promoting its football product -- because no one team can stage a game alone. It followed that if the NFL was a single entity for promoting football, it was also a single entity for promoting its product by selling NFL apparel. Additionally, the Court noted that the record established that the NFL teams had been acting as a single entity for IP licensing since 1963.

You can read the Seventh Circuit's opinion in it's entirety here: http://www.chicagoiplitigation.com/s...th%2520Cir.pdf

The gist of all this is that in order for American Needle's lawyers to prevail they will have to convince the Supreme Court that the NFL is not a single entity for licensing purposes. Since the Seventh Circuit pointed out that "the record established that the NFL teams had been acting as a single entity for IP licensing since 1963", that's a mighty tall order.

Imo, anyone counting on this case to open the door for other video game companies to make NFL games is setting themselves up for a huge disappointment.