NCAA, CLC, EA could lose $1 billion-plus

September, 20, 2012
9/20/12
5:08
PM ET
Earlier this week, emails filed as exhibits in the lawsuit by former college players against Electronic Arts, Collegiate Licensing Company and the NCAA were released, and the material suggests that the defendants knew they were using athlete likenesses, as the suit alleges.

[+] EnlargeNCAA logo
Lance King/Getty ImagesThe NCAA is among the bodies facing big losses because of a recent lawsuit.
"This whole area of name and likeness and the NCAA is a disaster leading to catastrophe as far as I can tell," wrote Nebraska chancellor Harvey Perlman in an email to Big 12 commissioner Dan Beebe and Texas president Bill Powers in 2009. "I have asked that it be placed on the agenda for the Board meeting on August 6th. I'm still trying to figure out by what authority the NCAA licenses these rights to the game makers and others. I looked at what our student-athletes sign by way of waiver, and it doesn't come close."

Powers wrote back: "I'm not sure I fully understand the claim, but it looks like the NCAA makes money from these licenses," Powers wrote. "Why should we be defendants in this, rather than plaintiffs representing our students?"

The case, which has been combined with Ed O'Bannon's antitrust suit that alleges that the NCAA wrongly uses and sells content related to specific athletes beyond the years of their eligibility, is currently in the hands of the Ninth Circuit in California because Electronic Arts' defense is that they had a right to use the athletes thanks to the First Amendment. The decision of the panel of judges could come down any day now. If the judges affirm the district court's rejection of EA's defense, the case would go to trial.

So how much is on the line for Electronic Arts, CLC and the NCAA if they eventually lose?

Well, much of that will depend on whether the defense of CLC and the NCAA -- that they didn't expressly license anything more than trademarks to the video game maker -- is any better than EA's argument.

It is not known exactly how many players will be included in the class action suit, but at most, it's every player in every game on each platform from 2007 on. Including all the games on every platform, that's 22 games in the past six years. There's roughly 15,300 individual players in each game.

Each player can be awarded up to $1,000 per likeness, per platform. That works out to $336.6 million. Then there's the NCAA basketball game, where roughly 3,600 players were featured in four games on eight platforms. There's another $28.8 million.

But that $365.4 million could be trebled, thanks to an Indiana publicity rights statute that would penalize them for a "knowing, willful or intentional" violation. Total potential loss? $1.09 billion, which would then be split among the defendants.

Darren Rovell | email

ESPN.com Sports Business reporter

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