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Originally Posted by SpeedyMikeWallace |
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In 2005 that may have been the case. 6 years ago, the VG industry wasn't grossing as much as the film industry. In 2-3 years, it will definitely have surpassed it. I find it hard to believe they couldn't make equal to, or more than, $300million in licensing by selling to multiple companies.
If EA wants to spend half a billion on an exclusive license, more power to them. They may not have that option if they're found guilty in that lawsuit, however.
The NFL has "Official" apparel. Redbok, however, is not the only company allowed to make clothing with the teams' logos and players' names on them.
DirecTV isn't similar either. The only thing they're allowed that other carriers are not is bypassing regionalization. Every single cable company, and Dish, are capable of showing NFL games.
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The NFL won't make more money by selling licenses to multiple publishers because, without exclusivity, publisher's aren't guaranteed the entire market share. It's doubtful that any publisher would agree to pay an upfront fee. Why would they when another publisher, that the NFL also awarded a license to, may garner a lot of sales, thus the company takes a hit financially.
With multiple licenses publishers pay the licensor a percentage of their sales, which is usually around 10 percent.
Reebok is the only company allowed to make jerseys and hats; if you want an NFL jersey or hat, you have to buy it from Reebok. That means that Reebok doesn't have to worry about competition, so prices are higher. If Nike was allowed to make Jerseys and hats simultaneously, Reebok would have to make sure their pricing was competitive.
As for Direct TV, it's true that other companies can show NFL games, but ,as you stated before, they're the only ones that offer every game from every market; if you're a fan of a team but you don't live in that local market, you have to get Direct TV; if you want access to every single NFL game that's not on National TV, you have to purchase NFL Sunday Ticket. Exclusivity places a tremendous value on the license for Sunday Ticket. If you want it, you have to get Direct TV. For that reason, the exclusive license for Sunday Ticket is expensive. It would be a lot cheaper if Comcast, the Dish, and whatever other companies were allowed to offer Sunday Ticket.
The problem that the NFL may have created for themselves is that, at this point and time, EA is the only publisher that can pay for an exclusive license, and is the only company that seems interested in making a football game right now. If there's no one to freeze out, why should EA have to pay a high premium anymore to do so.
In the football video game world, there are no Comasts, Dish Networks, or Time Warners any more; there's only Direct TV (EA).