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FIFA 14 » News

EA seems to be preparing for a future where the FIFA deal does not pan out

If you’re unaware, the licensing agreement between EA Sports and the FIFA organization recently expired. Instead of renewing it as EA has done in the past, they seem to have taken a more cautious approach to see if it’s even worth renewing it, especially since the rumored cost to renew is now beyond the old price of $150 million/year. That amount of money, even for a company as massive and a game as popular as FIFA, is nothing to sneeze at. While EA has and will certainly be able to afford this fee in the future, is it really worth it?

The two parties first struck a deal in 1993 that will expire in 2022. FIFA is reportedly seeking more than double its current $150 million annual licensing fee.

How much money is in play — FIFA wants more than double what it received from its last 10-year deal, which the Times claims would “increase its payout from the series to more than $1 billion for each four-year World Cup cycle.”

Additionally, FIFA also wants to limit EA Sports' licensing exclusivity to what defines a football game. This would allow the footballing body to sell the rights it would retain elsewhere, helping it make even more money — on top of the increased revenue that it's demanding from EA. On the other hand, EA Sports actually wants more leeway, including real-world football highlights, arena video game tournaments, and digital expansions such as NFTs (non-fungible tokens).

EA has in the past released standalone World Cup games, some of them being really good (WC 2010 and 2014) and some of them less than stellar (WC 2018). Without the license, this product would go away. This would be a bummer for us footy gamers, but not deal breaking as it only comes out once every four years.

EA posted $1.6 billion in revenue in fiscal Q1, slightly up from $1.5 billion in the same period a year prior.The results were driven by the company’s live services segment, which generated $1.2 billion in revenue for the quarter. EA is projected to pocket $6.85 billion in revenue in FY 2022.

What FIFA gets from EA as part of the deal — FIFA receives a tremendous brand boost from a game like FIFA, which offers a counter to the well-documented corruption associated with the governing body. EA has also essentially built up the FIFA brand for the governing body by putting its name on one of the most popular game franchises ever.

Two-year-long talks between EA and FIFA have stalled owing to those issues, people close to the negotiations told The New York Times. EA Sports group general manager Cam Weber seemed to acknowledge that in a blog post last week: “As we look ahead, we're also exploring the idea of renaming our global EA SPORTS football games. This means we're reviewing our naming rights agreement with FIFA, which is separate from all our other official partnerships and licenses across the football world.”

With this trademark filing and Weber’s comments on the negotiations, EA is preparing for a future where the FIFA deal does not pan out. It would be a radical change for such a popular series, but we could see the FIFA branding dropped and replaced with EA Sports F.C. as soon as 2023.
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