This week marks the return of the Electronic Arts (NasdaqGS:EA) college football franchise for the first time in 11 years. The video game originated in 1993 as Bill Walsh College Football (the former head coach of Stanford University and three time Super Bowl champion with the San Francisco 49ers) but changed its label to College Football USA and then to NCAA Football. The franchise ended after NCAA Football ’14 (released in summer 2013) because of legal disputes regarding the usage of name, image and likeness (NIL) of the players and violation of the Sherman Antitrust Act.
The legal issues began in May 2009 with an NIL lawsuit filed by former Nebraska football player Sam Keller against EA. Former UCLA basketball star Ed O’Bannon filed a similar lawsuit. In January 2010, U.S. District Court of Northern California Judge Claudia Wilken granted a motion to consolidate several cases against EA, the NCAA, and the Collegiate Licensing Company. In August 2012, O’Bannon filed a motion to include current student athletes and to allocate proceeds from NCAA football and basketball video games into trusts with the proceeds paid at the end of their eligibility. The legal battle continued to a point where the NCAA and its major conferences did not renew its licensing deals and the franchise ended.
In early February 2021, EA Sports teased the return of its popular college football franchise, although acceptance by all major schools was not universal, citing uncertainty with ongoing legal concerns regarding NIL for players. Although the Alston decision by the U.S. Supreme Court in late June 2021 was a narrow ruling regarding educational-related benefits to student athletes, the Court signaled an end to the practice of NCAA prohibiting compensation for NIL. Just days later, on July 1, 2021, the NCAA officially allowed student athletes to profit off their NIL. EA Sports announced in 2023 that NIL would be a part of the next college football video game.
EA Sports will pay each player $600 plus a copy of the video game. Certain players have or will receive more compensation to help promote the game. Individual schools will be paid by tiers according to their finish in the Associated Press rankings over a ten year period through the 2023 season. 13 schools in Tier 1 will receive a minimum payout just under $100,000. Tier 2 schools will receive approximately $60,000, Tier 3 will receive $40,000, and Tier 4 will receive $10,000. The renewed version of the game, College Football 25 is expected to sell more than 3 million copies, perhaps outpacing the popular Madden NFL series for this cycle.
The release of EA Sports College Football 25 is available on the latest generation of PlayStation and X Box game consoles. The standard version is priced at $69.99 and is accessible starting 12am on Friday, July 19th. The Deluxe version for $99.00 or $149.99 bundle with the next edition of video game Madden will grant early access, perhaps as early as 4pm EST this afternoon. EA reported annual revenue of $7.6 billion and EBITDA of $2 billion for the fiscal year ended March 31, 2024. Capital IQ estimates EA’s EBITDA margin to increase from the mid 20 percent over the last three years to mid 30 percent over the next three fiscal years.
