SMQ: A win-win-win plan to relaunch EA Sports NCAA Football

The last edition of EA Sports NCAA Football was released seven years ago. With the coronavirus threatening the 2020 season, how can we bring the game back?

Once EA Sports gave up its college football franchise after the release of NCAA Football 14, fans of the game were left hoarding old copies of the game and holding onto old versions of video game consoles long after their planned obsolescence. At the heart of the issue was the lawsuit against EA Sports and the NCAA led by former UCLA basketball player Ed O’Bannon, after finding out that the company used his likeness for a classic team without any compensation.

With individual states opening the door for college athletes to receive compensation for their name, image, and likeness and the NCAA starting to move the wheels on a systemwide allowance for players to capitalize on their careers, the issues that doomed the previous iteration of the NCAA Football series will soon enough no longer stand in the way.

Of course, a video game does not get made overnight. EA Sports, however, has a large part of the framework in place in terms of their Madden series of NFL games. Stadiums should still be digitized from the series that concluded with the 2014 edition. Rewrapping Madden player frames with college uniforms and player likenesses would certainly accelerate design processes on that end. It isn’t as though EA Sports would have to completely reinvent the wheel.

With fans locked down in their houses across the country as the coronavirus pandemic increases social distancing practices, and sports leagues cancel tournaments and postpone play for the same reasons, an NCAA video game would be more valuable than ever. If the season is postponed or canceled next year, it will become even more imperative to give people something to divert their attention away from the absence of live college football.

The million dollar question, as it always is in such situations, is how every party can walk away happy in this situation. As Michael Scott from The Office would say, we need a “win-win-win” negotiation here.

That’s what we’re going to look at in this week’s Sunday Morning Quarterback. How could we get NCAA Football back for modern video game systems and leave all parties involved happier than if the game never existed?

How do the economics of previous games inform new projections?

When the video game was last produced, EA Sports argued in court that they generated about $80 million in revenue on the sale of two million units per season. While it was never the largest revenue engine in the EA Sports catalog of offerings, the college football game certainly brought in a fair amount of money.

From those numbers, let’s make a few assumptions:

1. Given the rising price point of video games over the past seven years, and the current initial retail price for games like Madden and FIFA, it is not at all unreasonable to imagine an initial release price of $59.99 to $79.99 for a new NCAA Football game.
2. It is almost certain that a return of the NCAA Football series would sell far more than two million copies in its first year on the market. Considering that A) no previous editions exist for modern consoles and B) a live football season might not transpire for college football fans, an NCAA Football game could easily reach Madden levels of five-plus million sales.

Let’s think conservatively about this now that we can operate from a few assumptions. Working from the most conservative possible numbers, let’s do some quick napkin math.

At $59.99 per copy, even three million sales would bring EA Sports $180 million in revenue.

Four million copies would result in $240 million in revenue. Five million copies equate to $300 million for the company. Bump that up to $79.99 per unit and those numbers jump to $240 million, $320 million, and $400 million of potential revenue.

There is a real economic incentive to bring back the video game. EA Sports could have a huge revenue driver for the company if they put NCAA Football back on the market.

With video game revenue enjoying a surge due to the self-isolation measures being employed around the globe to flatten the curve of the coronavirus pandemic, hitting five million units in sales is by no means out of the reach. Even if it “only” comes to three million sales, EA Sports has a real opportunity to triple the annual revenue generated by its previous iteration of the series.

Then again, it was never a matter of sufficient revenue that led the company to pull the game from the market in the first place.

Obviously this is a win for EA Sports. How do schools, players win?

For universities featured in the NCAA Football series, the game was never about generating revenue. The kind of brand recognition and growth that is possible from having one’s stadium, uniforms, logos, mascot, and other unique aspects of regional college football experiences digitized and doled out by the millions to fans is the kind of advertising that usually requires one to pay out money rather than get paid for the trouble.

When the series was previously released, there was a four-tier system for paying out schools. Where teams fell within the respective tiers depended on their performance in the AP Top 25 poll over a rotating 10-year basis. Here is how the respective minimum payouts fell by tier, and the percentage of the average payout constituted by each level:

• TIER 1: $78,000/year minimum (191%)
• TIER 2: $47,000/year minimum (115%)
• TIER 3: $31,000/year minimum (75%)
• TIER 4: $7,500/year minimum (19%)

Again, this is a matter of schools effectively being paid to advertise their product rather than paying for the privilege. Even those smallest sums are better for the brand than refraining from inclusion in the video game.

That said, there is a real market opportunity for schools to recoup at least a small portion of their lost revenue should the college football season be canceled.

Let’s step back and think about the pay structure for other games

Specifically, let’s look a bit at the Madden NFL series. EA Sports pays out $50 million annually in a lump-sum payment to divide between the NFL and the NFL Players’ Association.

The NFL has 32 franchises, and 53 roster players and 10 practice squad players per franchise. In effect, their $50 million gets divided between 2,016 players and those 32 teams. Imagining this payout solely at the FBS level, 130 teams and an average of 117 players per roster would divide smaller portions of a lump sum of this size. (This average of players was determined through the previous five years of available data from the Department of Education.)

Even so, for 15,210 players and the 130 schools, $50 million could go a long way. Imagine if that amount was shared between college football programs and the players who comprise those programs. Accounting for the tier splits and a 50/50 divide between players and schools, here is what it would look like:

Schools could potentially pull in around five times as much potential revenue from a new NCAA Football game than they did seven years ago. Players, as well, could earn thousands of dollars apiece to have their name, image, and likeness included in the video game.

The beautiful part about this as well is that there is also an opportunity to close those gaps some in terms of revenue. At a time when students are increasingly finding themselves in a world of uncertainty, any relief is helpful but more relief is better. Likewise, for the smallest athletic departments the windfall of even tens of thousands of dollars just for allowing EA Sports to market their program would be huge.

In this scenario, the largest schools would still receive nearly three times as much money as they previously did for participating in the video game. The smallest programs would receive a boost in video game revenue nearly 12 times as large as they previously received under the old model.

Players, too, would benefit from this situation to an even greater extent. Splitting 60 percent of the revenue between the 15,210 players at the FBS level would result in each player receiving a check for nearly $2,000. Bump that up to a 65/35 split for the players and the check gets even bigger while still allowing for significant increases in revenue for all schools.

So why isn’t this happening already if it is a win-win-win?

There are still a lot of moving parts to be worked out, but without sports going on anywhere right now the NCAA has plenty of time on its hands to fast-track name, image, and likeness rights for athletes. That really is the last roadblock to finding some equitable solution that leaves all parties happy.

Quibble about the percentages for each tier, or how much should go to schools versus players. Question whether EA Sports should pay out the same amount for college football rights as NCAA rights. I’ve provided a handy calculator for you to play with the figures yourself.

Ultimately, though, what this exercise proves is that it is entirely feasible to launch NCAA Football once again for gaming systems in time for a potentially canceled 2020 season.

Make this happen, EA Sports. A nation deprived of sports would be in your eternal debt if this comes to fruition.