NCAA likeness suit could cost EA $1B
by Steve Watts, shacknews.com, Aug 4, 2011 9:15AM PDT
EA's legal entanglement with former NCAA players could come with a hefty price tag, to the tune of one billion dollars according to one estimate.
EA has argued that it has a First Amendment right to use the players' likenesses, and has shrugged off the estimate with what could be one of the best legal responses ever. "We could lose billions more if a giant meteor hits the earth," said EA spokesman Jeff Brown. "We're not planning for either outcome."
The calculation, tabulated by (via Joystiq), suggests that between the various NCAA players involved in the class-action, compensation of $1,000 per likeness, per platform would result in roughly $334.5 million to players. If the violation was "knowing, willful or intentional," that amount can be tripled, leading to a $1 billion payout in total.
If the chips do fall that way, though, EA will take a significant hit. $1 billion is reportedly about 25% of the company's annual revenue. It could also set an expensive precedent for a similar NFL suit, which alleges that EA changed player numbers and removed names to avoid paying licensing fees.