American college football is, by some measures, the second most popular sporting league in America. That makes it a lucrative business, and therefore, hardly surprising that video game giant Electronic Arts (EA) would want to capture a piece of the pie with a college football game.
That is, until this ill-fated foray into student athletics got complicated. In its quarterly earnings (p.3) on Oct. 29, EA confirmed for the first time reports that it will set aside $40 million to cover legal expenses from a lawsuit it settled with disgruntled, ex-college players last month. In the case, a group of ex-players argued they should be compensated for the use of their likenesses in EA’s video game, NCAA Football.
It’s a relatively small sum for a company expected to rake in $396 million in profit next year. But the settlement carries greater significance for the multi-billion dollar US college sports economy. The rivers of gold that flow from huge broadcast deals, gate takings and merchandising are used to fund just about everything on campus (including the salaries of coaches and subsidies for other sports) except compensation for players, who make nothing. The ex-players who filed the suit have said they want to divide the $40 million settlement between the roughly 200,000 to 300,000 current and former football players whose likenesses have appeared in games by EA Sports. That works out to a paltry payout of about $160 a player, and the settlement still needs to be approved by the courts before the complex matter of distributing it even begins.