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The Greatest Business Model in the World

Posted By Christopher Im, Oct 24, 2013

The first shot has been fired in the battle for student athletes to be financially compensated for their work on the field and court. On September 26, 2013, Electronic Arts Inc. (EA) and Collegiate Licensing Co. (CLC) settled for an undisclosed amount with a group of college student athletes for using their image and likenesses in video games. This would mean, in theory, that every player ever to appear in the game would be entitled to a share of the settlement money. EA has been making the NCAA-branded football and basketball games since 1998 with license from the NCAA and the CLC, who represents nearly 200 individual schools, conferences, bowls, and the NCAA.

All isn’t what it seems at first glance, however. Taking a step back, you’ll see that this wasn’t just about suing a video game developer, but the first salvo in the ever growing war for student athletes to get a piece of the massive earnings the collegiate sports system generates. While the majority of people laud this settlement as a major step in the right direction, the real culprit here is the NCAA, the remaining sole defendant in this lawsuit.

EA’s general manager of American football, Cam Weber, put it succinctly when he said EA was largely “stuck in the middle of a dispute between the NCAA and student-athletes who seek compensation for playing college football.” Really, what did the student athletes gain from setting off a chain reaction that resulted in what surely can’t be lucrative individual pay day (as the settlement will be spread out between about 125,000 men) and the shutdown of a great marketing engine when EA announced they would no longer be producing the game. The video games at its very worst allowed die-hard fans to engage with the college sports world on a personal level and at its best brought in new fans and worked as a great brand extender. From a business perspective, EA really didn’t have any choice other than to shut down a college football game next year. Without NCAA’s trademark, EA would simply be making a generic football game.

In Season 15, Episode 5 of South Park, the brilliant social commentators Trey Parker and Matt Stone, drew a (tongue in cheek) parallel between the NCAA and the slave trade. But if you think about it, were Mr. Parker and Mr. Stone really that off? There’s no denying that college athletics is a billion dollar business built off the backs of the student athletes on the field. Why shouldn’t they get compensated in some fashion for their work? Sure, you can make the argument that college sports is all about students playing amateur sports but it clearly stopped being just about that when the schools started raking in the dough. What if we substituted the word ‘university’ with ‘corporation’ and ‘student athletes’ with ‘employees’? I’d bet the country would riot. Is this really that different?

Another interesting question, though I haven’t seen it raised all that much is, who really even owns the likeness of a player. It appears to be clear that it’s the players, but I can’t help but think of Wendt v Host International Inc. where the actors of the television show Cheers sued a restaurant chain and the television studio for having robots in airport bars that appeared to clearly resemble them. After the Ninth Circuit essentially ruled that the actors didn’t own their own likeness, the parties eventually settled for an undisclosed sum of money.

At the end of the day, this is a really interesting case where intellectual property, copyright, labor rights, and many other legal issues intersect. It’s a complicated question and one that won’t be answered anytime soon. So for now, let’s sit back and watch Eric Cartman’s take on the situation.

http://www.youtube.com/watch?v=4XEq6XYtMVU

Sources

King Hall Intellectual Property Law Association | UC Davis School of Law | 400 Mrak Hall Drive | Davis, CA 95616 | image credits

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