FIFA, the videogame, is in conflict with FIFA, soccer's governing body. After licensing talks that stalled over a seven figure fee, Electronic Arts is now looking at a generic option for its $20 billion-a-year franchise.
EA's FIFA license contract expires at the 2022 World Cup in December. The company has not reached a new agreement. The New York Times reports that negotiations between the two parties have been ongoing for over two years. The key issue is money. According to The Times, FIFA wants more than twice the amount it receives from EA to $1 billion per four-year World Cup cycle. FIFA also wants to use its brand beyond EA's video games, and seeks new partnerships that are not part of its exclusive deal.
We are also looking ahead and considering renaming the global EA Sports games. EA Sports Cam Weber wrote this after the launch of FIFA 22, in October. We were also reviewing the FIFA naming rights agreement, which is separate to all of our official licenses and partnerships across football.
It is difficult to imagine FIFA without FIFA. EA's deal with FIFA is only one of the 300 licenses that powers the video game. FIFA is soccer's international governing body. It enforces soccer's rules and facilitates player transfers. And, of course, it runs the World Cup which is watched by billions. EA is more concerned with FIFA's control of soccer's various clubs, leagues and players. EA's FIFA license is, essentially, a very large, very important name.
Peter Moore says that the fear we had always had was the amount of money FIFA was paying us for what we got. Moore was present at FIFA licensing negotiations for 10 years, having served as EA's head of EA Sports, and then as COO. He left EA in 2017. Moore calls the current situation unprecedented, especially since there is only one year to go on the licensing agreement.
Moore, now a Unity employee, said authenticity is what sports fans are looking for in a game. FIFA 22 recreated 17,000 players and 30 leagues, 700 team teams, and more than 90 stadiums with remarkable fidelity. FIFA is not responsible for much of this. A large part of the game could still be played through national teams, leagues and clubs. Moore also says that FIFA has been the subject of controversy in recent times, including the 2015 corruption scandal and allegations of bribery. Moore says that although the FIFA brand has immense value, it is less well-known to younger people than a corporate entity.
Moore says this is the time to say goodbye FIFA. Moore says that EA Sports F.C. was recently granted trademark registrations in the UK, EU and Canada. Moore recommends that EA only spend half the millions it has spent on FIFA licensing to build out the game. Moore says that it is time for both sides to consider doing something else.
