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Wednesday, August 07, 2024

NIL Licensing for College Athletes Brings a Revival in the Video Game Industry

In what has been deemed the “most anticipated sports video game in American history”, EA Sports College Football 25 made history when it premiered on July 19th, 2024. Although EA Sports has been making college-sport-related video games since the 1990s, this new edition has more than just a roster update for fans’ favorite teams. For the first time, the college athletes depicted in the video game are being compensated for the use of their image – their name, image, and likeliness (NIL). This is due to new legislation that allows for college athletes to be compensated for the use of their NIL, as opposed to previous laws only allowing for professional athletes to be able to profit from their NIL.


While college athletes could not previously license out the use of their NIL, this did not stop video game companies, including EA Sports, from creating college-based football videogames with attempts at anonymity – instead of including athletes’ names in the game, players selected an athlete avatar to play based on a position on the field, and the number of the player (for example, Quarterback #10). However, college athletes quickly caught on to the fact that while these avatars were technically nameless, they shared specific qualities with the athletes themselves, including hair color, height, weight, jersey number, school of attendance, and athletic skill attributes) that made it clear that the video game companies had used everything but the athletes’ names. A UCLA college athlete led a class action lawsuit against the NCAA for profiting off of the image of athletes without compensation and won in 2014. Since then, there has been a complete stop to the use of athletes’ names in video games, disappointing gamers who appreciate the realism of playing as their favorite college athletes within a virtual college stadium.


That is until the Supreme Court announced in a unanimous decision that the NCAA refusing to allow college athletes to license their NIL violated antitrust lawWith this new ruling, college athletes can profit off of their image after giving consent for that image to be used, which could prove to be incredibly lucrative. The highest-valued college athletes have NIL valuations upwards of $4.5 million, which presents unforeseen opportunities for revenue for college athletes and universities alike. However, it’s notable that while these valuations are high, EA Sports paid each athlete only $600 for the use of their NIL, in addition to a free copy of the video game (valued at $70).



While the new ruling certainly opens the door for new opportunities for college athletes to profit and for fans to engage in more realistic videogames, the uncertainties in the NIL negotiation process in determining “how much an athlete’s image is worth” are likely to remain as other video game companies begin to create their variations of interactive games. These games are likely to become more prevalent given the success of NCAA 25, bringing in over $200 million in revenue before the game was even officially released. However, with college athletes now legally able to take control of their own NIL, it seems that for now, the situation is a triple win; more opportunity for companies to create video games without the threat of legal action, more realistic gameplay for the consumers, and payment to the college athletes for the use of their NIL.

 


Mary-Kathryn AppanaitisLaw Clerk, BridgehouseLaw LLP, Charlotte, NC

image: EA