EA & CLC No Longer “In the Game” With College Athletes

After a long legal battle with college athletes, Electronic Arts (EA) and the Collegiate Licensing Company (CLC) are calling it quits.  On September 26, 2013, the companies announced that they reached a settlement agreement with the former college athletes.  If the judge approves the settlement, the NCAA will be forced to defend the suits on its own.

Four years ago, former UCLA basketball star Ed O’Bannon filed a lawsuit against the NCAA, EA, and CLC focusing on college athletes’ rights and compensation.  O’Bannon sought to recover damages for the use of his likeness in things like video games and television broadcasts.  Since the filing, more players joined his case or filed their own suits against the companies; today, there are three presumptive class-action suits pending.

On Thursday, just hours before announcing the settlement, EA announced that it would stop producing its college football game.  That statement reverses its July decision to continue producing the game without NCAA backing.  The change was likely spurred by the loss of three major conferences.  In August, the SEC, Big Ten, and Pacific-12 Conferences announced they would be moving away from the game.

Several hours after EA’s announcement, a proposed settlement agreement was filed in the US District Court in Northern California.  The papers indicated that an agreement has been reached to settle the three class action cases against EA and the CLC, with the specific settlements terms to remain confidential.

One of the players’ lead attorneys stated the settlement should reach somewhere between 200,000 to 300,000 former players.  He did not indicate how much players would receive, but he said it would provide them with “something substantive.”

Some attorneys have suggested that this settlement also entitles current players to compensation.  However, it’s unclear whether active players will be allowed to collect immediately or will have to wait until the end of their college careers.  The wait may be required by an NCAA rule that prohibits current players from receiving compensation.

That rule, along with other issues, is being challenged by the players as the case proceeds against the NCAA.  After EA’s announcement, the NCAA did not comment on the settlement but said that it would still fight its case.  Its chief legal officer said they were “prepared to take this all the way to the Supreme Court if we have to.”

The resolve to continue fighting is understandable given how much the NCAA has at stake.  A settlement or loss at trial will change college sports dramatically and redefine amateur status in collegiate athletics.

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