In precedent-setting publicity rights litigation, video game maker Electronic Arts (EA) has reached a settlement agreement on claims brought by former collegiate student athletes who were featured in games such as NCAA Football and NCAA Basketball.
The plaintiffs – EA, and the licensing arm for college sports programs, the Collegiate Licensing Company (CLC) – told the court that "the terms of the settlement are confidential until presented . . . for approval."
Notably, the deal – reportedly worth $40 million – does not include the National Collegiate Athletic Association (NCAA), also named as a defendant in the suit.
Several former student athletes, including UCLA basketball player Ed O'Bannon and Nebraska quarterback Sam Keller, claimed that EA violated their right of publicity by creating avatars that mimicked their personal characteristics, both personal (height, weight, skin tone, hair color, home state), and their athletic style of play, which included their statistics and jersey numbers. Current athletes and legends like Oscar Robertson and Bill Russell also signed on to the putative class action.
In a series of pretrial motions, EA sought to dismiss the suit on First Amendment grounds. The video game company said the avatars were based on publicly available information and constituted a transformative use. Both the 3rd and 9th Circuit Courts had rejected the video game maker's contentions earlier this year.
In late September, EA and the plaintiffs announced they had reached a deal. U.S. District Court Judge Claudia Wilken granted the parties' motion to stay the litigation and vacate any deadlines, pending the filing of the settlement agreement terms. While the court filings do not indicate a dollar amount, one of the plaintiffs' attorneys, Michael Hausfeld, told The New York Times that EA and the CLC will pay $40 million. How that amount will be divided remains undecided. "We have to come up with a plan of distribution, and that's what we are working on now," Hausfeld said.
To read the order in In re NCAA Student-Athlete Name & Likeness Licensing Litigation, click here.
Why it matters: How the remaining claims against the NCAA will play out remains to be seen. Steve Berman, lead attorney on the Keller case, told the AP that the settlement allows the plaintiffs to focus on their claims against the NCAA, which he said "intentionally looked the other way while EA commercialized the likenesses of students, and it did so because it knew that EA's financial success meant a bigger royalty check to the NCAA." But in a statement to USA Today, the chief legal officer for the NCAA, Donald Remy, said the organization is prepared to "take this all the way to the Supreme Court if we have to" and is "not prepared to compromise on the case." That case could have far-reaching implications as to whether third parties are liable for right of publicity violations when they do not create content, a hot issue in the social media arena.