Founder of HEITNERLEGAL — Sports, Entertainment, Trademarks, Copyrights, Business, Litigation, Arbitration To sign up and/or visit Darren's newsletter, please visit: https://www.linkedin.com/newsletters/newsletter-image-likeness-6995176238755545088 June 23, 2023
The Weekly Longer NIL Thought.
It feels like I can't get away from leading this newsletter with a conversation about EA Sports' effort to bring back a college football game to the masses.
Initially, it was to discuss the video game becoming the first test for large-scale group licensing (Vol. 28). Next, it was to bring to light an effort to cause athletes to boycott involvement with the game (Vol. 31). Now, it's to highlight a lawsuit that was brought against the video game manufacturer in state court, which has since been removed to federal court, by The Brandr Group (TBG). Click here for a copy of the Complaint.
The key claim lodged by TBG is that EA Sports has committed tortious interference by directly reaching out to players to opt-in to have their publicity rights used in the forthcoming video game despite TBG's exclusive group licensing arrangements with many of the colleges where the athletes are enrolled. Instead of working with TBG, EA Sports tapped competitor OneTeam Partners.
This may sound a bit odd to you. You may be thinking, where are the actual athletes in all of this? Why does this feel like a spat between competitors (TBG and OneTeam) over who gets to economically benefit from the grouping of athletes for an opt-in process?
I hope you didn't think these group licensing organizers are working for free. For instance, based on the contracts that Matt Brown has inspected, TBG typically pays athletes a royalty rate of 70%. That means TBG is earning a nice commission for organizing the athletes on group licensing deals such as those related to inclusion in video games.
Brown also offered an example of the exclusivity clauses that TBG claims are being tortiously interfered with by EA (which he obtained through an Open Records Request): Assuming Wyoming (or any other school) has the authority to exclusively bind their athletes to such an arrangement (which, again, feels a bit weird excluding athletes from the process of deciding who is marketing their group rights), EA is aware of the existence of this clause, and TBG is damaged by EA's actions, then the elements of a tortious interference claim may be established. Unless, of course, EA's actions fall outside the scope of the Group Licensing Program and Wyoming is still able to fulfill its obligations to TBG under the relevant contract. I expect some interesting motion practice coming on that front.
"The core question is whether EA’s relationship with OneTeam Partners violates the exclusivity clauses that many schools already signed with Brandr," says Brown. "EA is reportedly telling schools that because EA and OneTeam are signing athletes up individually for the EA Sports game, that participation in the program does not violate their previous agreements with Brandr. Clearly, Brandr disagrees."
TBG also says, in its Complaint, that EA had promised deals would be done through TBG at those schools where TBG has exclusive group licensing rights but that EA has reneged on those promises. Athlete Advantage, an agency that represents over 100 college football players and operates a number of collectives, released a statement that says, "This lawsuit represents a pivotal moment in the pursuit of justice and rightful compensation for these talented athletes, and Athlete Advantage is honored to stand alongside Brandr Group in this crucial fight. It is only fair that they receive fair compensation for their contributions, both on and off the field. By supporting the Brandr Group and the athletes involved in this lawsuit, Athlete Advantage aims to amplify their voices and advocate for long-overdue reforms in collegiate sports."
I'm all for athlete advocacy, but that's not really what this lawsuit is about. It's TBG upset that it is being circumvented by EA despite its contractual arrangements with 50+ schools. If we really care about the athletes, we would be focusing on the fact that they didn't even have a say on which body represents them in group licensing deals, which could be cured should they be provided employment status and allowed to make group decisions by way of a union or trade association.
Anyhow, EA says that the TBG lawsuit will not alter its plans to release the video game nor the timeline for same.