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Electronic Arts Reaches Settlement Agreement With NCAA Athletes

The video game company decides to stop fighting, but a lawsuit continues over billions of dollars of licensing income.

NCAA Football

In a potential watershed moment for amateur sports, attorneys for student athletes have announced they have reached a proposed settlement with Electronic Arts over claims that the video game publisher illegally used players' likenesses.

A stipulation of settlement has already been filed in a California federal court. It will need to be approved by a judge.

Cam Weber, the general manager of football for EA Sports, wrote on the company's website, "We have been stuck in the middle of a dispute between the NCAA and student-athletes who seek compensation for playing college football. ... The ongoing legal issues combined with increased questions surrounding schools and conferences have left us in a difficult position -- one that challenges our ability to deliver an authentic sports experience, which is the very foundation of EA Sports games."

STORY: Active NCAA Athletes Added to Lawsuit Over TV Money, Video Games 

The company also announced it wouldn't be producing its NCAA Football game next year.

This potentially ends one battle in the ongoing fight over whether amateur athletes get compensated, but it doesn't finish the larger war.

The plaintiffs in the case, including Ed O'Bannon, Bill Russell and Oscar Robertson, continue to push antitrust claims against the NCAA for forcing athletes to sign waivers and allegedly enforcing group boycotts among its licensing partners. U.S. District Judge Claudia Wilken is expected to rule soon on whether to certify a class action, and the NCAA says it is prepared to take the case all the way up to the U.S. Supreme Court if necessary.

“We are looking forward to presenting our case against the NCAA to a jury at trial,” said Steve Berman, managing partner of Hagens Berman and lead attorney in the litigation. “We believe the facts will reveal a startling degree of complicity and profiteering on the backs of student athletes.”

The details of the players' settlement with EA hasn't been released, but since Judge Wilken will have to give it her blessing, it's likely to be revealed soon enough. The nature of potential licensing payments to athletes, who exactly receives them, and how it would be administered will be some of the considerations under review.

The settlement could also be of interest to many other entertainment companies, particularly television networks with billion-dollar deals with the NCAA.

Up until now, the athletes have indirectly staked an interest into these lucrative contracts. But some legal observers expect the athletes might eventually bring claims against broadcasters for exploiting their likenesses without compensation. In demands for documents, TV companies such as ESPN and Fox have asserted First Amendment rights. In July, many of the suing athletes scored a big victory against EA when the 9th Circuit Court of Appeals determined that the video game company couldn't use the First Amendment to defeat a lawsuit over likenesses.

E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner