Madden 12 News Post

EA/NFL Extend NFL Exclusive License by One Year to 2013

06:10 PM - February 14, 2011 by RaychelSnr

The Sports Business Journal is reporting that the NFL and EA have come to terms on extending the current exclusive deal one more year with the uncertainty surrounding the 2011 NFL Season.

Quote:


	"The NFL has restructured its lucrative licensing and sponsorship contract with Electronic Arts to account for the sport�s uncertain future, significantly reducing the video game maker�s contractual obligations next season but adding a year to the deal, according to several well-placed sources. The contract now runs through 2013. The league is believed to have so far rebuffed pleas for fee reductions from other licensees and sponsors, many of which, like EA, find it difficult planning for the next season under the threat of a work stoppage. The league�s collective-bargaining agreement with the players expires March 4, and the two sides are far apart on reaching a deal. EA, however, is a special case, with its iconic �Madden� video game title. The licensing deal it agreed to with the league in early 2008 is believed to be worth well into nine figures in guarantees and royalties over its original five-year term. That stands as one of the most, if not the most lucrative non-TV contract the NFL enjoys. The NFL Players Association, which signed a companion EA deal for rights to the players, reaps regularly between $30 million and $40 million annually, according to the union�s annual filings with the Labor Department. The league deal allows EA to use team colors, names and logos."

This basically means that EA has exclusive rights to Madden now until after Madden NFL 14 -- or roughly right about the time the next generation of consoles are set to hit.

This just shows how strong of business partners the NFL and EA Sports are at this point. The NFL is giving EA a break on payments this year and has basically given them an additional year as a make-up of sorts to make right. Also, if you read my 2011 Predictions Post back in January, you saw this was my first prediction, that the deal would be extended in some way this year.

So in that respect, this news is not unexpected -- and with the deal stretching into the next console generation, I have serious doubts any other company is going to be in a position enter the market anytime soon due to the extreme cost of entry into quality sports game development that will be present at that time.

Thanks to Pasta Padre for the news tip.

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Member Comments

# 161 kjcheezhead @ 02/15/11 12:55 PM

Quote:

Originally Posted by Giants4Natic


	Who cares? The NFL cares because they want their name associated with the biggest gorilla in the game which is Madden due to its 20 year run and mainstream appeal That is just fact: If Madden was such garbage like many call it then it woud not sell as much and EA would not be able to pay for the license

20 year run? Not really on top tho. The franchise has been beaten at times by Tecmo way back in the day and Gameday was released doing something EA claimed was impossible and forced them back to the drawing board. Finally we have 2k5, which sold only 1/3 of what Madden did but was still millions of copies.

Then the NFL screwed the millions of their own fans who were happy playing those other titles and told them to go play Madden like all the other fans or go to hell.

Madden may not be garbage (close to it,imo tho) but the fact is many football fans simply don't enjoy it. On the surface, it's a good move by the NFL but eventually it could catch up to them. Giving the fans a product they enjoy is what funds a league like the NFL. Screwing the fans is what causes them to turn their attention to baseball, basketball or some other form of entertainment all together.

# 162 mestevo @ 02/15/11 01:07 PM

Quote:

Originally Posted by ManiacMatt1782


	Well there goes any hope of ea working to improve game play. Enjoy your surprise onside kicks this year, and your create your super bowl half time show next year. They have no incentive to improve gameplay without anyone competing with them. I am done, no nfl game for me for a few years. Join the revolution against exclusivity. It it's only us, the paying customer who loses out on having quality products. The lack of competiton only breeds complacency from EA. The game will never improve with the exclusive license. You guys want this to end, do you want EA to go back to caring about improving their product, and making great football games again, then vote with you wallets. Don't give ea your money on a football title this year.

If any of this were true Madden would only be worked on by 8 animators, a UI guy and a numbers guy in a portable outside of an EA campus. A lot of money goes into these games, and the individuals have a lot of reason to make a good game - their continued employment. While there are plenty of reasons to want competition, going the complete other way with blanket statements is contrary to your title.

# 163 kjcheezhead @ 02/15/11 01:18 PM

Quote:

Originally Posted by Giants4Natic


	How is it going to affect the NFL. The NFL gets a huge check from EA that 2k or any other company cannot top. This is a business folks. Are you or I goig to not watch our favorite team play on SUndays because the NFL only wants EA to make a video game. Come On now

I will watch the games, of course. For now. Believe it or not, the NFL can lose fans tho. I left MLB behind in 1994 and haven't looked back.

Video games strengthen the bond between a fan and the league they follow. Every NFL fan that turns towards COD or NBA2k11 is a fan less likely to become "hardcore". A fan less likely to purchase a ticket to a game, purchase NFL direct ticket, and then licensed apparel, etc.

Yes, Giants4natic, this can hurt even the mighty NFL in the long run.

# 164 CYST2000 @ 02/15/11 01:21 PM

I think this is a sign that the big wigs at EA are hesitant to making the deal a long term deal, which means that the exclusive deal isn't bringing in the money it once was. This could be a sign that the exclusive deal might be coming to an end after 2013 if sales don't increase.

# 165 ryan36 @ 02/15/11 01:21 PM

Quote:

Originally Posted by mestevo


	Still waiting for a quality unlicensed football game, a NFL license isn't required to make a good accurate game. The competition needs to stop getting cute and shipping incomplete/gimmicky games. The lack of one gives me no confidence at all that a competitive product would have any leg up over Madden. The most recent efforts by both 2k and NM were pathetic. Until then, Madden easily gets my money, this deal doesn't bother me, I'll buy NCAA and Madden every year, and every year there are enough changes to satisfy me as I bounce between the two pending the releaseof their replacements.

This is just it. You'd have spend on development more than EA does to surpass it. Companies aren't willing to do that, because it won't sell more than Madden. The cost of making games is too high to sell even 40% of what the leader does. I think people would end up buying both games. Meaning, Madden wouldn't lose much market share, if a quality product emerged even if it was licensed.

Quote:

Originally Posted by Giants4Natic


	Remember 2K5 they sold the game for $20 and came nowhere near in game sales to madden.

Yup. See my comment above.

Quote:

Originally Posted by kjcheezhead


	Who cares really? Coke kills Pepsi in sales every year. You know what? I still drink Pepsi products and have no complaints about that situation.

It's a different animal. Coke is so widely consumed that 35% of market share for Pepsi is still a feasible, profitable business model.

Quote:

Originally Posted by kjcheezhead


	20 year run? Not really on top tho. The franchise has been beaten at times by Tecmo way back in the day and Gameday was released doing something EA claimed was impossible and forced them back to the drawing board. Finally we have 2k5, which sold only 1/3 of what Madden did but was still millions of copies. Then the NFL screwed the millions of their own fans who were happy playing those other titles and told them to go play Madden like all the other fans or go to hell. Madden may not be garbage (close to it,imo tho) but the fact is many football fans simply don't enjoy it. On the surface, it's a good move by the NFL but eventually it could catch up to them. Giving the fans a product they enjoy is what funds a league like the NFL. Screwing the fans is what causes them to turn their attention to baseball, basketball or some other form of entertainment all together.

KJ, you're overestimating your importance here, as a dissatisfied gamer. Most NFL fans follow their team first, and buy a football game second. NOBODY is gonna turn their back on the Packers because Madden sucks. This decision will NEVER catch up to the NFL outside of the video game world. NEVER. It's an isolated niche, man. Yes, many football fans don't enjoy Madden. But not enough to make so much as a RIPPLE in anything the NFL cares about.

The biggest issue the NFL has to contend with in terms of fans , is the fact that it's more fun to watch the game on TV , than sit in the nosebleeds with a ticket you can barely afford.

# 166 MAzing87 @ 02/15/11 01:31 PM

Not suprising but I honestly don't care much anymore.

# 167 76reasons @ 02/15/11 01:38 PM

I predict that Madden 12 will be the best selling NFL video game this year. The numbers won't lie. Perhaps less than last year but I can say for certain that Madden will crush every other NFL game.

What? I can't buy any other NFL game? Nevermind.

# 168 RGiles36 @ 02/15/11 01:39 PM

Quote:

Originally Posted by kjcheezhead


	Madden may not be garbage (close to it,imo tho) but the fact is many football fans simply don't enjoy it. On the surface, it's a good move by the NFL but eventually it could catch up to them. Giving the fans a product they enjoy is what funds a league like the NFL. Screwing the fans is what causes them to turn their attention to baseball, basketball or some other form of entertainment all together.

I was going to respond, but Ryan36 summed it up perfectly below:

Quote:

Originally Posted by ryan36


	KJ, you're overestimating your importance here, as a dissatisfied gamer. Most NFL fans follow their team first, and buy a football game second. NOBODY is gonna turn their back on the Packers because Madden sucks. This decision will NEVER catch up to the NFL outside of the video game world. NEVER. It's an isolated niche, man. Yes, many football fans don't enjoy Madden. But not enough to make so much as a RIPPLE in anything the NFL cares about.

I think sometimes our passion gets in the way of always seeing things rationally. Take a step back and digest this: the majority of videogame fans are happy with the state of Madden. Anything suggestion pointing to the contrary reeks of frustration and ill feelings towards EA. While that's warranted in some cases, let's not confuse ourselves into thinking that niche forums likes this (and others) are putting a sizeable dent into the profit of the NFL or EA.

# 169 coogrfan @ 02/15/11 01:40 PM

Quote:

Originally Posted by droopizzle34


	The NFL is gonna get money either way,whether its one company or four,they still get paid....

Not so. The NFL is making far more money in licensing fees than it did when it had multiple licensing partners (fyi - DrJones is a longtime OSer who has worked for both EA and 2k Sports. He knows of what he speaks.)

http://www.operationsports.com/forum...post2038997926

Quote:

Originally Posted by DrJones


	In the "olden days", the 3 companies paid the NFL/PA a royalty per unit sold, at roughly 10%. Let's say the total football market is about 6 million units. 6 million x $60 x 10% = $36M annually to the NFL. The current EA deal with the NFL pays them between $60M-$70M per year, regardless of units sold.

http://www.operationsports.com/forum...post2037681616

Quote:

Originally Posted by DrJones


	As I explained before, the NFL and NFLPA (not to mention the MLB and other leagues) were paid by unit before the exclusivity deal. Every time a contract expired, they asked for a bigger piece of the pie. Outrageous demands (like "you now have to pay us double or triple what you're paying us now") were occasionally made, and were rejected by EA and 2K alike, as difficult as it may be for you to believe. The NFL has the hammer in negotations, true, but far from absolute power. EA offered to pay a large flat fee (in essence, much higher royalties) in exchange for exclusivity. The NFL accepted. If the NFL thought they could've made more money by keeping the per-unit royalty system intact and arbitrarily jacking up the royalty fees for all developers, they most assuredly would have done so.

# 170 GaryT531 @ 02/15/11 01:41 PM

thanks to next gen ea i have slowly lost more interest in the nfl each year. just traded in madden 11 (360) for $23.00 on amazon. played it maybe 5 times this season. i suggest you trade yours in as well while it's still worth something.

# 171 RGiles36 @ 02/15/11 01:50 PM

Quote:

Originally Posted by LiquorLogic


	Madden has been leaking oil, in terms of sales, ever since they acquired the exclusive license. Yeah, they still sell a lot of copies, but you can't expect the sales to just plummet to nothing overnight. *Madden has been a household name for two decades, and there's currently no competitor, so it will take a while for Madden to totally lose it's mainstream appeal.*

So who's going to capture the mainstream NFL-videogame appeal then? That's the benefit of the license: they can't lose. Not only b/c of the brand that's built with the name, Madden, but b/c no one can tap into the NFL videogame market.

I'm unsure why the effect of the economy is dismissed by people on this board. I'm sure Halo & COD did their damage. But those games fall under a more broad genre, no?

# 172 ryan36 @ 02/15/11 01:59 PM

Quote:

Originally Posted by LiquorLogic


	It's already happening; Madden sales have been on the decline for quite sometime now. If they start struggling to crack 3.5 million in sales, do you think they'll even be able to renew the exclusive license come 2014 ?

Yes. 10char.

# 173 TexasBorn1 @ 02/15/11 02:01 PM

Quote:

Originally Posted by rgiles36


	So who's going to capture the mainstream NFL-videogame appeal then? That's the benefit of the license: they can't lose. Not only b/c of the brand that's built with the name, Madden, but b/c no one can tap into the NFL videogame market. I'm unsure why the effect of the economy is dismissed by people on this board. I'm sure Halo & COD did their damage. But those games fall under a more broad genre, no?

Its dismissed because every other popular franchise sees increases with each new game. Street Fighter, COD, Halo, Gran Turismo, Forza, Gears of War, you name it. The NFL is huge here and their flagship title should see increases or it should at least be seeing consistency. Its not like the NFL audience is small, the mainstream crowd loves it

# 174 ryan36 @ 02/15/11 02:03 PM

Quote:

Originally Posted by TexasBorn1


	Its dismissed because every other popular franchise sees increases with each new game. Street Fighter, COD, Halo, Gran Turismo, Forza, Gears of War, you name it. The NFL is huge here and their flagship title should see increases or it should at least be seeing consistency. Its not like the NFL audience is small, the mainstream crowd loves it

Can you point me to which of the games you cited is a yearly release?

# 175 mestevo @ 02/15/11 02:03 PM

Quote:

Originally Posted by LiquorLogic


	COD and Halo seem to be doing just fine.

And music games are floundering, Madden must be amazing to be bucking that trend? Point is you're comparing 2 different gamers and calling them the same thing. Growth in one type of game doesn't mean they all should grow.

# 176 ryan36 @ 02/15/11 02:04 PM

Quote:

Originally Posted by EddieV


	You guys spend so much time defending EA...lol. Every great game sees its sales go up from one iteration to the next. Like COD, Halo, GT, etc. Madden's sales have been on the side since the exclusive license, no matter how much some of these guys would like to believe otherwise.

Again, which of these are a yearly release?

# 177 kjcheezhead @ 02/15/11 02:05 PM

Quote:


	Ryan 36

It's a different animal. Coke is so widely consumed that 35% of market share for Pepsi is still a feasible, profitable business model.

35% of 5 million is 1.75 million. Isn't that enough sales to be a profitable game? That's not including NFL fans sitting on the sidelines or ones that would purchase both NFL titles.

KJ, you're overestimating your importance here, as a dissatisfied gamer. Most NFL fans follow their team first, and buy a football game second. NOBODY is gonna turn their back on the Packers because Madden sucks. This decision will NEVER catch up to the NFL outside of the video game world. NEVER. It's an isolated niche, man. Yes, many football fans don't enjoy Madden. But not enough to make so much as a RIPPLE in anything the NFL cares about.

As a hardcore gamer and fan, yes the NFL has me hooked. At some point tho people make the jump from a casual fan to hardcare fan that spends hundreds, if not thousands of dollars on NFL products. The fans that don't enjoy madden and turn to other sports or COD don't always make that jump to hardcore fan.

Business moves like this can catch up to the NFL eventually. Maybe not overnight, but eventually. MLB was America's pastime once upon a time and the NFL was the one that couldn't touch it.

# 178 Rocky @ 02/15/11 02:09 PM

# 179 mestevo @ 02/15/11 02:10 PM

Quote:

Originally Posted by LiquorLogic


	What will happen is that EA will no longer want to pay for, or be able to pay for, the expensive exclusive license, and the NFL( more than likely) will just go back to letting multiple publishers produce a game to make up the difference. The economy effect is dismissed because Halo and COD are doing their damage. The economy would effect every game no matter how broad the genre; they, Halo and COD, are part of the same industry as Madden. Don't you think that if Halo and COD could somehow be unaffected by the economy, then the only NFL game in town, a game that has been the top dog in football video games for two decades, would also be unaffected by the economy ? This all based on the assumption that the economy is the problem; in my opinion, it isn't.

It's not the economy, its the market.

# 180 TexasBorn1 @ 02/15/11 02:17 PM

Quote:

Originally Posted by ryan36


	Can you point me to which of the games you cited is a yearly* release?*

COD has a yearly release and is criticized for not making huge strides, yet it breaks records every year

Rock Band is getting bigger and bigger

Being a yearly release wasn't a problem for Madden in the past. People gobbled it up like Call of Duty and it got bigger and bigger every single year. Why does being a yearly release matter now? They have exclusive rights to what people regard as the most popular sport in the country and that people say all the other sports can't hold a candle too, yet they see a sales drop. Yeah, you will say the % is insignificant, but it exists. They could be making more money, but a segment of people who used to happily buy their product no longer do so. And again let me state I have absolutely no problem with Madden. I am just pointing out that they are losing out on profit when they are in a very advantageous situation

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