The legal dispute/'boycotts' around EA Sports group licensing, explained:

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On Tuesday afternoon, Front Office Sports dropped another huge update on what is becoming an increasingly complicated and controversial process…the NIL licensing process for next year’s EA Sports College Football.

Brandr, a group licensing company that works with dozens of FBS institutions, is suing EA Sports over their proposed athlete group licensing program with OneTeam Partners, a different firm. You can read the entire claim here.

Just last week, Brandr CEO Wesley Haynes chatted with Extra Points and explained why his company feels that the proposed deal is bad for athletes.

I’ve been writing about the development process of EA Sports College Football for a long time, and have gotten to know a fair number of folks in the licensing world. I normally paywall a lot of my EA Sports coverage, but I’ve seen a lot of misinformation about not just this lawsuit, but the CFBPA boycott campaign and other storylines relating to athlete licensing…so let me try to share what I know as clearly as I can, in front of the paywall.

Okay, let’s start here.

Matt, I’m just a gamer. I’m not a law student, I’m not a college athlete, I don’t work in the industry, and I really just want to know how all of this stuff impacted the video game. Is the game going to be delayed now? Could it get canceled?

Nothing has happened over the last two weeks to give me any reason to think that EA will not release EA Sports College Football on time (summer of 2024). Securing player likenesses was not a prerequisite for launching the game (although EA very much wants those likenesses), and I have no reason to believe that this lawsuit, or potential CFBPA boycott activity, will ultimately prevent athlete likenesses from being used in the final product. That is not the outcome EA, schools, Brandr, or the majority of athletes want.

If that is your only concern, I recommend you exhale. It’s going to be okay. If this is the only information you needed, feel free to close this tab and tell your friends to subscribe to Extra Points.

Everybody else, stick with me here.

So why is Brandr suing EA?

The crux of the legal question here isn’t actually about how generous the terms are for the EA Sports group license. Brandr strongly believes the reported terms ($500 per athlete, no royalties, some NIL exclusivity around video game products) are bad for athletes, and they dedicate a lot of space in their official complaint explaining why. But that isn’t the main reason they’re suing.

Per FOS:

Here’s the gist of how Brandr’s agreements work.

The schools agree to give Brandr contract information of their athletes, share information about the program with the athletes, and license university marks to Brandr. Then Brandr individually signs up athletes for a group licensing system, negotiates with brands, and facilitates the production and sale of co-branded items…think jerseys, trading cards, etc. Brandr and the school are in communication to make sure those group-licensed deals don’t violate any other university agreements, Brandr collects a fee from the sale of the products, and the rest of the money is distributed to the athletes.

Based on the contracts I’ve inspected, Brandr typically pays athletes a royalty rate of 70%.

As part of these contracts, Brandr asks the schools to grant Brandr a level of exclusivity. Here’s a clause from Brandr’s agreement with Wyoming, for example, that I previously obtained via an Open Records Request:

Brandr is saying they’ve secured similar agreements with over 50 schools (including major programs like Ohio State, Texas, Florida, Michigan and Nebraska) saying that Brandr would be the agent to negotiate terms for group licenses. According to the complaint, EA executives told Brandr as late as May of 2022 that "they 100% planned to work with TBG”…and then didn’t.

The core question is whether EA’s relationship with OneTeam Partners violates the exclusivity clauses that many schools already signed with Brandr. EA is reportedly telling schools that because EA and OneTeam are signing athletes up individually for the EA Sports game, that participation in the program does not violate their previous agreements with Brandr. Clearly, Brandr disagrees.

What about the CFBPA boycott? What’s going on there?

Earlier this month, Jason Stahl, Executive Director of the College Football Players Association (CFBPA), sent out a newsletter Wednesday morning proclaiming that the EA Sports licensing deal is “Bad for College Football Players”, and suggested players should not sign it. Justin Falcinelli, a former Clemson center and the CFPBA’s Vice President, echoed those claims in an interview with On3, calling for a boycott, saying “All current players should boycott this deal. It is an opt-in deal, and they should not opt into it.”

Like Brandr, Stahl and his organization believe that a core problem with the current EA deal is that it was negotiated without the direct input of any current college athlete. Stahl and his organization also believe that the reported terms of the deal are insufficient for current athletes.

Is this CFBPA thing just about greedy lawyers trying to get EA to pay more money so they can earn more money?

I don’t personally think that’s the case. The CFBPA earns revenue from dues, not from taking any % of any NIL activity from any athlete. The CFBPA would earn the same amount of money if EA paid athletes $500 or $15,000.

I understand the ideological reasons for the organization advocating for a boycott. Whether the group licensing agent is Brandr, OneTeam, Opendorse, or any number of other companies, the CFBPA wants athlete involvement in any deal that impacts athletes. Stahl has also pointed out that the organization is membership-driven, not executive-driven. If this is an issue that current CFBPA members feel strongly about (be they current or former college football players), then it’s an issue the CFBPA wants to engage with.

Here’s an important thing to remember though. The CFBPA isn’t the college football union. That doesn’t exist, and might not for a while. They’re also not an organization that currently represents large masses of current college athletes. Just because the CFBPA takes a policy position is no guarantee that said policy is supported by a majority, or even a significant minority, of current athletes.

Is this just about greed with Brandr then?

I can’t answer that specifically, but from reading the complaint and following this issue closely, I can say that the biggest concern here isn’t so much that “EA’s deal isn’t good enough for athletes” so much as it is “if EA can muscle in and undermine our contracts without penalty, then other companies could as well.” EA could theoretically increase their athlete payouts by a factor of ten tomorrow, and the core legal questions don’t really change for Brandr.

Just about everybody I’ve ever talked to over the last year in the licensing world….from the NFLPA to Brandr, third-party consultants to major NIL software company executives, have all told me that its unlikely any company makes big money from an EA Sports College Football group license…Brandr, OneTeam, or anybody else. The overhead is too high, (much higher than it would be in the pros), the number of athletes included is massive, and the payouts aren’t very strong.

It’s the sort of contract you take because you think it can be a foothold into larger, more lucrative deals, or because you think the group license video game rights business can grow significantly in the future, not because you want a big payout right away.

Okay, so what happens next?

According to the complaint, the Brandr group is not asking EA Sports to not use player NIL in the upcoming game. Rather, they are asking for EA to not solicit athlete NIL from Brandr clients, to stop interfering with their client contracts, and for Brandr to recover damages. Nobody is asking for the game to be delayed, revert to generic players, etc.

This case could go to a jury trial, but most of these cases are settled well before then. EA could potentially restructure its deal to negotiate with Brandr and pay some sort of settlement. Brandr could also decide to withdraw the suit. Schools may end up pushing both sides to reach amicable resolution, and quickly, since they don’t want to be caught in the middle.

It’s a big story if you care about licensing, athlete rights, and the legal process for future video games or digital products. But if your major concern is just playing the game for next summer, I don’t believe it’s time to hit the panic button just yet.

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