We previously posted a series of blogs (1,
2,
3) about litigation involving video game manufacturer Electronic Arts, Inc. (a/k/a E.A. Sports). E.A. Sports was sued by several former college athletes who claim that their likenesses were used in video games without their consent. One lawsuit was filed in New Jersey by former Rutgers University quarterback Ryan Hart, alleging that Electronic Arts violated Hart’s right of publicity by using his likeness and biographical information in video games. A similar lawsuit was filed in California by former Nebraska and Arizona State quarterback Sam Keller and others.
In October 2013, Electronic Arts and the Collegiate Licensing Company agreed to settle the Keller litigation by making a $40 million payment to the former collegiate athletes. The NCAA, also a defendant in the Keller litigation, was not part of the settlement.
As reported by ESPN, the NCAA has now agreed to settle the Keller litigation and two other cases for $20 million. The $60 million total settlement, if approved by the Court, would be paid to Division I men’s basketball and Division I Bowl Subdivision football players whose images, likenesses or names were used in video games produced by E.A. Sports. While the specific criteria that will be used to distribute the settlement is unclear, it is estimated that more than 100,000 athletes will be eligible to participate. Depending on the number of claims filed, each athlete can expect to receive a settlement in the range of $400 to $2,000. Importantly, the settlement payments will not be considered pay for athletic performance, which is currently barred under NCAA rules.
Meanwhile, as reported by USA Today, a separate case filed by former UCLA quarterback Ed O’Bannon against the NCAA has proceeded to trial in California. In that case, former collegiate athletes are trying to prove that the NCAA member schools illegally restrained trade by collectively preventing athletes from controlling their publicity rights. The athletes are seeking the right to license their publicity rights for use in television broadcasts, re-broadcasts, video games, etc. In order to prevail, they must prove that absent the NCAA’s compensation restrictions, there would be a bona fide marketplace for their names, images and likenesses.
There is no doubt that the NCAA profits mightily from selling broadcast rights to college sporting events. For example, the CBS and Turner networks reportedly pay more than $700 million per year to televise the NCAA men’s basketball tournament. If the athletes prevail in the O’Bannon case, it could pave the way for current and future athletes to be compensated for use of their intellectual property rights. It could also forever change the amateur model of college sports, turning it instead into a free-market system.
