As strife grows between National Football League players and owners, the video game business is already feeling sidelined.
The NFL and Electronic Arts have restructured their deal over the famed Madden franchise, the Sports Business Daily reported yesterday, citing unnamed sources. According to the publication, the NFL has agreed to "significantly" cut down on EA's "contractual obligations" and has extended the agreement for one year beyond the original 2012 end date.
Sports Business Daily wasn't able to track down how much less EA will pay the NFL this year, but Jacksonville Jaguars owner Wayne Weaver, who is also chairman of the league's business ventures committee, told the publication that the dispute between owners and players has caused the NFL to "give our partner some relief in the short term, but gain something on the backend."
Electronic Arts holds the exclusive right to use NFL logos, team names, and player likenesses in its Madden NFL franchise. Back in 2008, the company signed a multiyear deal with the NFL believed to be valued in the hundreds of millions of dollars, though no exact numbers were released. The game developer signed a separate agreement with the NFL Players Association (NFLPA) at the same time that runs through 2012.
The future is somewhat uncertain for EA, which relies upon the release of Madden every year to boost its revenue. On March 4, the collective-bargaining agreement between the NFLPA and the league ends. If there is no 2011-12 season, it's possible there will be no new Madden game. Moreover, there is speculation that as of March 4, the NFLPA will no longer allow EA to use player likenesses in its games until an agreement between the association and the NFL is reached.
EA has been tight-lipped about the possibility of an NFL lockout. But it acknowledged in an earnings call with investors earlier this month that it is planning for the worst--"no season."
EA did not immediately respond to request for comment.