FIFA Wants to Charge EA $1 Billion Every Four Years for Using the FIFA Name, Prompting a Potential Rebranding

[Tsing]

Image: EA



The idea of EA renaming FIFA, one of the world’s most recognizable game franchises, seems insane, but it’s become a real possibility due to a financial dispute that has been raised between the publisher and international football association. According to a report from the New York Times, FIFA would like EA to pay it $1 billion for the privilege of using its name for each World Cup cycle. That implies a payout of $1 billion to FIFA every four years.



From NY Times:



At least two years of talks about renewing the contract that allows Electronic Arts, through its EA Sports division, to use the organization’s name have hit the wall, according to multiple people close to the negotiations. The possibility of a permanent break after next year’s World Cup in Qatar — when the current 10-year agreement ends — was made explicit in a letter released last week by Cam Weber...

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[Grimlakin]

LOL 250 million a YEAR. I mean I know Soccer (football) is the most popular game in the world. But really.. 250 million a year to license the name not to mention specific individual licensing. How much does EA make from these games?!

 

[Brian_B]

How much does EA make from these games?!

Hmm, well EA has over $5.5B in annual revenue.

FIFA the game first introduced in 1993. The franchise has sold 325M copies since then, and is in excess of 25M copies per year in recent years.

You can try to parse financial reports to see what their profit margin is, but so many accounting games get played I don't know if there is much value in that.

I'd wager to say EA ~could~ afford it, but really doesn't want to afford it. EA is banking that the game alone is the draw, but I'd bet it's the roster updates that mean more to most players. It's not like these annual release games change a lot year over year... maybe a feature update or slight graphics upgrade each year, but hardly enough to make it worth forking over another $60 -- apart from the roster updates. If EA wants to keep the annual cadence they will have to figure out something else to make it attractive, or stop annual releases and move more to cash shop reoccuring purchases, like random loot boxes or something.

 

[Denpepe]

I'd wager to say EA ~could~ afford it

I'm sure they could and would if they did not have to pay the teams etc.. for their stuff. Who knows what they will do if they see EA can pay that much for just the FIFA name.

Teams like Barcelona who are in debt for hundreds of millions would love a bigger payday from EA.

 

[Stoly]

AFAIK FIFA is the biggest sports franchise for EA, I think it even outsells football in the US alone.

But a billion every 4 years is a sh*tload of money for a non-profit organizatión.

I think EA should slow down FIFA release every couple of years and just update the rosters and uniforms.

 

[Grimlakin]

Just make roster updates required for tournament play and make them part of the tournament entry fee. Outside of tournaments charge 5 bucks a team for roster updates and pay the teams 1 dollar per update. Tournament roster updates are only good in the tournament.

 

[Brian_B]

I'm sure they could and would if they did not have to pay the teams etc.. for their stuff. Who knows what they will do if they see EA can pay that much for just the FIFA name.

I'm fairly certain (not 100%, admittedly), that Barcelona and others are franchised FIFA entities. Which would allow FIFA to negotiate EA-type licensing deals on behalf of the entire league, with each team would receive their cut from FIFA. This would mean that EA would just be able to cut a check to FIFA and receive all the team and roster information, possibly including player likenesses, depending on how the franchising agreement and player agreements are worked out -- and EA wouldn't need to go to Barcelona and the other teams individually to receive franchise-brokered rights.

I don't know if there is an anti-compete in there, but I would expect so, which would prevent EA from going to each of the teams individually to cut out FIFA at large.

 

[Denpepe]

I'm fairly certain (not 100%, admittedly), that Barcelona and others are franchised FIFA entities. Which would allow FIFA to negotiate EA-type licensing deals on behalf of the entire league, with each team would receive their cut from FIFA. This would mean that EA would just be able to cut a check to FIFA and receive all the team and roster information, possibly including player likenesses, depending on how the franchising agreement and player agreements are worked out -- and EA wouldn't need to go to Barcelona and the other teams individually to receive franchise-brokered rights.

I don't know if there is an anti-compete in there, but I would expect so, which would prevent EA from going to each of the teams individually to cut out FIFA at large.

It seems very complicated how these things work some info can be found here https://fifauteam.com/fifa-22-partner-clubs-exclusive-league-licenses/

 

[Brian_B]

It seems very complicated how these things work some info can be found here https://fifauteam.com/fifa-22-partner-clubs-exclusive-league-licenses/

Wow you're right.

For US sports, this licensing process is simple: a single publisher agrees an exclusive deal with the league and the players’ union, thus receiving every piece of intellectual property it could possibly need to recreate the authentic experience of an NFL, NBA, MLB or NHL game. Football game publishers must acquire rights in individual and collective deals with hundreds of clubs, leagues, agencies and player associations; as well as deals to use branded sports equipment such as football boots and balls. Completing a set of licensing rights for a league can be an arduous process, often involving middlemen and agencies.

 

[Zarathustra]

You know it's really trendy to bash EA for rehashing the same game every year just changing the names and charging full price, and believe me, I am not one to defend EA, but this right here is why they have to do this.

The licensing bucks going back to the sports leagues and players they depict in their games cost a HUGE amount of money. Once they pay the license cost, there probably isn't much left to actually spend on development.

 

[MadMummy76]

You know it's really trendy to bash EA for rehashing the same game every year just changing the names and charging full price, and believe me, I am not one to defend EA, but this right here is why they have to do this.

The licensing bucks going back to the sports leagues and players they depict in their games cost a HUGE amount of money. Once they pay the license cost, there probably isn't much left to actually spend on development.

Well, cry me a river. If it's such a lousy proposition for them, they can quit making fifa games any time

 

[Denpepe]

Well, cry me a river. If it's such a lousy proposition for them, they can quit making fifa games any time

Like I said b4 it is lousy as it's one bilion for just the name fifa on the box and the right to do a world cup game every 4 years. All the other rights have to be negociated seperately, if one party doubles their price and they accept that opens the door for all the others to follow suit, and a lot of the teams are in a bad spot financially so they would jump on the opportunity to make a couple more millions.

They can sell just as many games with a different name as long as they can keep the teams and rosters.

 

[Stoly]

Like I said b4 it is lousy as it's one bilion for just the name fifa on the box and the right to do a world cup game every 4 years. All the other rights have to be negociated seperately, if one party doubles their price and they accept that opens the door for all the others to follow suit, and a lot of the teams are in a bad spot financially so they would jump on the opportunity to make a couple more millions.

They can sell just as many games with a different name as long as they can keep the teams and rosters.

I wonder how PES does it

 

[Denpepe]

I wonder how PES does it

They licensed some teams but had to use make up names for the players and everything else as they did not have those rights, , but they did have a far lesser amount of teams afaik.

Also I wonder how many of those 700+ teams in FIFA get used a lot by players. I assume most will choose their favorite or the better teams to play with and ignore the rest.

 

[Zarathustra]

a lot of the teams are in a bad spot financially so they would jump on the opportunity to make a couple more millions.

It's kind of amazing that can be the case in a world of rabid fans, exclusivity agreements, etc. etc.

Professional sports is such a stacked, anti-consumer racket. If they can't make it work, they are doing something very very wrong.

It's like losing money while running a casino.

 

[Denpepe]

It's kind of amazing that can be the case in a world of rabid fans, exclusivity agreements, etc. etc.

Professional sports is such a stacked, anti-consumer racket. If they can't make it work, they are doing something very very wrong.

It's like losing money while running a casino.

They pay their players too much for starters

as an example Barcelona lost 481€ million in the season 2020-2021 as in in debt for 1.35€ billion, that's why they did not give Messi a new contract this season and he left transfer free to PSG.

One of the up and coming young Barcelona players has recently his contract changed that binds him to the team until 2026 and if he wants to go earlier the team that wants to buy him needs to pay 1€ billion, that's insane lvl money for a player.

 

[Zarathustra]

They pay their players too much for starters

as an example Barcelona lost 481€ million in the season 2020-2021 as in in debt for 1.35€ billion, that's why they did not give Messi a new contract this season and he left transfer free to PSG.

One of the up and coming young Barcelona players has recently his contract changed that binds him to the team until 2026 and if he wants to go earlier the team that wants to buy him needs to pay 1€ billion, that's insane lvl money for a player.

Yeah, that's just dumb. Learn to say no.

Superstars are rarely worth the money anyway. In any team sport it is better to have bench strength of low-fame cheaper hard workers. As a bonus they tend to be better team players rather than do stupid things to show off because they think they are the ****. You know, like actually passing to another player who has a shot at scoring, instead of going for it solo.

 

[Stoly]

Yeah, that's just dumb. Learn to say no.

Superstars are rarely worth the money anyway. In any team sport it is better to have bench strength of low-fame cheaper hard workers. As a bonus they tend to be better team players rather than do stupid things to show off because they think they are the ****. You know, like actually passing to another player who has a shot at scoring, instead of going for it solo.

Teams don't win championships. SUPERSTARS wins championships.

 

[Brian_B]

Teams don't win championships. SUPERSTARS wins championships.

There's no I in team, but there are pimps in championships.