EA Reaches $27 Million Settlement, Keeps NFL Exclusivity

Electronic Arts reached a proposed settlement on a lawsuit that was originally filed in 2008 by consumers. The case claimed that EA violated antitrust and consumer protection laws by signing exclusive licensing agreements with the NFL, NCAA, and AFL and overcharged customers for the games.

The company will establish a $27 million fund to pay out to consumers that purchased Madden NFL, NCAA Football, or AFL games published by EA. Gamers who bought an EA football title from January 2005 to today are considered part of the class action lawsuit and are entitled to a portion of those funds.

As part of the settlement, EA will not be able to enter an exclusive rights deal with the AFL for five years and cannot renew its current agreement with the NCAA for at least five years. The agreement between EA and NCAA does not expire until 2014. The exclusive NFL license will remain unharmed.

The company will likely still develop official NCAA titles but other publishers will also be able to obtain the license. However, it is highly doubtful that a developer could be able to compete with the EA NCAA Football franchise. The cost of licensing and the necessary development time would make it difficult to create a financially viable game. Fans who were hoping the lawsuit could pave the way for a reboot to the NFL 2K franchise are disappointed as the settlement does not change any of the licensing terms between EA and the NFL.

As part of the terms of the settlement, anyone who purchased an EA football title for Gamecube, PlayStation 2, and Xbox will receive up to $6.79 per game. Those who bought a game for Wii, PlayStation 3, and Xbox 360 will be entitled to as much as $1.95 per game. There is an eight title limit per person.

The lawsuit stemmed from a battle between ESPN NFL 2K and Madden 2005. When 2K released their title for only $19.99, EA reduced the price of Madden 2005 from $50 to $30. The next year, EA purchased the exclusive rights to the NFL and released Madden 2006 at a price of $50.

The settlement is pending court approval, which is expected to occur on September 27.

Gamers interested in obtaining more information regarding the settlement and the personal ramifications it has can visit www.hbsslaw.com/maddennfl.