Last week video game producer Electronic Arts Sports and the Collegiate Licensing Company reached a proposed settlement with the plaintiffs in the O’Bannon case (previously discussed here). Pending approval from Judge Claudia Wilken of the U.S. District Court of Northern California, former and current college athletes will receive approximately $40 million dollars as compensation for the use of their likenesses in the popular NCAA Football video game series. The litigation is far from over, however, as the National Collegiate Athletic Association (NCAA) remains the primary target of the antitrust class action suit. And while Judge Wilken has yet to certify the proposed class, EA’s and CLC’s eagerness to settle now points towards eventual class certification.

As the specific details of the proposed settlement have not been disclosed, the individual athlete’s payment remains unclear: estimates of the number of athletes included range from 125,000 t0 300,000, meaning at most around a $300 payment per athlete (though attorney fees may significantly reduce this figure).

What is clear, however, is that this proposed settlement involves only a fraction of the money at stake in the O’Bannon case: despite NCAA Football’s popularity, the revenue it has generated pales in comparison to that of televised college football.

Since its introduction in 1998, the annually released video game’s sales have totaled an estimated $1.3 billion in the U.S. While that sales figure may seem impressive, consider recent college football television contracts. ESPN paid the NCAA $7.3 billion for the exclusive rights to air the College Football Playoff for twelve years beginning in 2014. Individual conferences have signed lucrative deals as well, with the Pacific-12, Big 12, and Southeastern Conferences receiving $3.0, $2.5, and $2.3 billion respectively through various licensing deals with ESPN and other networks.

As many who have played the NCAA Football video game likely can attest, the virtual players – especially the most talented ones – closely resemble their real-life counterparts in many aspects, including athletic skill set, physical attributes, number, university played for, and home state. The actual players’ names, however, appear nowhere within the game. College football broadcasts, of course, go far beyond virtual simulation; rather, they actively show and promote the actual athletes’ likenesses. Accordingly, the O’Bannon plaintiffs will probably demand a large piece of the broadcast pie, perhaps as much one-half of licensing revenue.

With so many millions – possibly billions – at stake, this complicated legal battle is unlikely to resolve easily or soon. By settling now, EA and CLC have escaped from protracted litigation, potentially at an ultimately enviable price.

–Marshall Cox

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