Electronic Arts has secured an exclusive license to the players, teams, and stadiums of the National Football League, the publisher announced today. As a consequence, EA's titles may be the only officially licensed NFL football games on the market for the five-year duration of the deal.
Terms of the deal were not disclosed. A report from the Street & Smith's Sports Business Journal in May, which suggested that an NFL exclusivity deal might be in the offing, speculated that Electronic Arts might be interested in paying as much as $1 billion for the right deal.

According to EA's announcement, the only exception to the deal covers Internet and wireless games (such as those published by THQ). Otherwise, the agreements cover "action simulation, arcade-style, and manager games on the PC, handheld game devices, and consoles -- including console online features."

"For the first time," EA's announcement states, "all aspects of the interactive experience -- including console-based fantasy football features and handheld game devices -- will be fully integrated within one EA game," suggesting that players of EA's console simulations will be able to enjoy handheld connectivity and fantasy football features when the next season rolls around.

"The five-year agreements will usher NFL fans through the console technology transition with new ideas and innovative game play experiences," said EA CEO Larry Probst.

In addition, Probst told Reuters news service that EA plans to use the deal to expand beyond the Madden and Street franchises. "You can imagine that there will be additional products in different genres than the pure simulation game and the arcade genre," he said.

Finding itself locked out of the vital license to the NFL players, teams, and stadiums could be a fatal blow to Visual Concepts' resurgent ESPN-licensed football titles, which gained significant ground in market share this season on the strength of their $19.99 price point.

The move to undercut EA's pricing, part of a new co-publishing campaign undertaken by Sega and Take-Two interactive, boosted unit sales of ESPN NFL 2K5 by several times in comparison to last year's Visual Concepts football game, and pushed EA to drop the price of Madden NFL 2005 in response.

Take-Two slammed the exclusivity deal in a statement released shortly after EA's announcement today. "We believe that the decisions of the National Football League and Players Inc. to grant an exclusive license for videogames do a tremendous disservice to the consumers and sports fans, whose funds ultimately support the NFL, by limiting their choices, curbing creativity, and almost certainly leading to higher game prices," it said.

However, Take-Two also downplayed the deal's impact on its business: "While sports games in general are an important part of Take-Two's product diversification strategy, the licensed NFL game we distributed on behalf of Sega this year was not a material contributor to our profitability to date, nor was it expected to be a meaningful contributor in the upcoming year.?? We remain committed to continued diversification of our product portfolio, including sports."

EA has picked up exclusive licenses to other sports leagues before -- the NASCAR stock-car racing circuit, the PGA Tour -- but never at such direct expense to a competitor.

In theory, Sega could sub-license the NFL properties from EA for its games, but it's not clear whether either party would be interested in brokering such a deal. Legal action once forced Konami to sub-license a sports property to its competitors, when it secured an exclusive license to the Japanese professional baseball league in 1999, but for obvious reasons, that precedent doesn't necessarily apply.

Source: 1up.com