The EA-NCAA Split is Small But Telling NewsPosted by Chris Johnson on July 19th, 2013
Chris Johnson is an RTC Columnist. He can be reached @ChrisDJohnsonn.
The NCAA is scared. No really, it is. Wouldn’t you feel the same way if, say, a massive class-action lawsuit with the potential to utterly shatter the fundamental method by which you govern and profit off college sports was knocking at the door? There’d be some fear in there, I’m fairly certain. That doomsday scenario is exactly the situation the NCAA could face as soon as this summer, when U.S. District Judge Claudia Wilken is expected to grant class certification to a group of plaintiffs accusing the NCAA of not only price-fixing amateur athletes’ free-market oriented, competitive economic entitlements, but withholding the millions of dollars in TV and video game revenue schools, conferences and the organization itself reaps in each and every year. A storm is coming, and the NCAA is beginning to feel the heat. That’s probably an understatement. “Preparing for life without amateurism,” the utter silliness and dubious origin and antiquated nature of which is a different column for a different day, is probably closer to what the NCAA is thinking right now.
How do I know the NCAA is scared? Because when it does things like disassociate itself from one of the stickiest points of the massive lawsuit holding its head in the proverbial guillotine, you just know. That is, in essence, is what the NCAA did Wednesday night, when it announced it would no longer sponsor EA Sports’ famous NCAA Football video games. The move makes intuitive sense. Ed O’Bannon’s eponymous legal atom bomb began as a suit against the NCAA and EA Sports challenging the uncompensated use of student-athletes’ likenesses in video games. The case has since evolved to include current and former athletes who want a share of not only the revenue generated by video games, but also – as mentioned above – the conference realignment-driving, bank account-defying, laughably-defended TV contracts negotiated with member schools and conferences. The NCAA can’t afford to cut loose with the meatier part of the suit – the massive media rights revenues to be seized and, depending on your idea of what a new college sports world order could look like, distributed (at least in part) to the student-athletes who make those revenues possible in the first place. That part of the suit is in Wilken’s hands. The dispute over the properly compensated use of likenesses is baked in there, too, but the NCAA – up until Wednesday night – could (and did) at least make the prudent move to divorce itself from its longtime video game partner, lose a few dollars in the exchange and emerge fiscally solvent on the back end provided the other finer points of the lawsuit – namely, the class action dagger threatening to puncture amateurism’s aortic valve – fall short of unraveling the organization’s overarching economic model.
Bidding adieu to the NCAA means the NCAA won’t earn anything from NCAA football’s typically immense payouts (Electronic Arts stopped making the basketball version, NCAA March Madness, in 2008, and there appears to be very little hope for an eventual college hoops video game revival), but when compared to the alternative – a continued partnership with EA, and continued liability for the uncompensated use of current and former student-athlete likenesses, potentially leading to separate payouts to every last “fake” athlete used in an NCAA-branded video game – the organization was wise to cut its losses, go home and focus on the more potentially destructive aspects of the case in court. The NCAA, you see, is already retreating. It knows its partnership with the EA, espousing the profoundly absurd idea that the athletes used in college video games don’t represent likenesses of the actual athletes themselves (even if they looked, competed and dressed like those very same athletes), was bogus from the start. It knows it can’t afford to risk shelling out extra payouts on top of the massive sums potentially owed to O’Bannon and his plaintiffs if and when Wilken grants class certification. Getting rid of EA is basically a hedge against potential restitutions, a preemptively cost-managing move designed to minimize losses.
Unfortunately for the NCAA, severing ties with EA doesn’t mean it won’t have to pay up for its intelligence-insulting video game model after all. Even if EA, as ESPN reported Wednesday night, plans to make another NCAA football video game without the NCAA’s official insignia attached, the amateur model barring student-athletes from being compensated off those games – the model by which the NCAA justifies its byzantine existence – could leave the NCAA liable to pay those athletes the restitutions they would have otherwise received through a legal battle over the NCAA’s hypothetical continued partnership with EA. In less long-winded fashion: the NCAA might well have to pay-up no matter what. Waving farewell to EA and extricating its four-letter logo doesn’t mean the NCAA is completely in the clear on the video game front.
When you really burrow deep into the core of the issue, the NCAA removing its logo from a popular college football video game isn’t all that important. In fact, in the broader scope of the ambitious legal aims of the O’Bannon trial, it’s a minor cosmetic footnote. It also confirms something most college sports fans already knew: the NCAA is shaking in its boots — trembling knees and sweaty palms and room-pacing deliberation and morally-perverse-video-game-contract-excising and all. The evidence is laid bare for all to see.