Analysts Weigh in on Madden’s Mega Licensing Fees

Yesterday, GamePolitics broke the news that Madden publisher Electronic Arts paid the National Football League Players Association more than $35 million in licensing fees during 2007.

We asked a couple of financial gurus to comment on the eye-popping figure, which is buried within a massive document filed by the NFLPA with the U.S. Department of Labor.

Wedbush-Morgan financial analyst Michael Pachter told GP:

The [Madden licensing] deal is likely a guarantee of around $50 million total, and $35 million [going] to the players makes sense. The old deal was around $15 million per year, and I know that it went up substantially when renewed in 2005.
[EA sells] around 5.5 million copies a year, so they’re burdened with [about] $9/unit in licensing. That’s reasonable, on par with the royalty paid to the console manufacturers.

So, Mike, yesterday GP speculated that the league would get at least as much as the NFLPA from EA. Are you saying we were wrong and that the NFLPA actually gets more than the NFL?

Most definitely.


The product is the players, and the league used to get most of the money. The reason the royalty went up was the players, not the league. The league looks at the game as a marketing tool, but the players want to be paid for their likenesses.

Meanwhile, analyst Doug Creutz of Cowen and Company termed the $35 million paid by EA to the NFLPA "a gigantic number," adding:

I’d estimate Madden generates $350-400 million in revenue for EA annually.


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  1. 0
    DeepThorn says:

    They won’t be losing anything, they will always have the last copy EA made, they just have to make the roster update themselves with the create a player. (or with the last version that has that)

    Maybe another company will make football games those people like too, but the majority of Madden fans from years past are sick of this recycling of the game.

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  2. 0
    insanejedi says:

    True, but that’s because NFL is an actual license. If people want American football, you can go somewhere else for that. Are you the same person who complains about the fact that Activision is the only company that can make spider-man games?

  3. 0
    insanejedi says:

    But there are people who ligitimatly like Madden (crazy I know!). Why do you want to encurage the death of madden, and as a result people who like the game can no longer play it anymore?

  4. 0
    Meohfumado says:

    "Backbreaker looked to be a Madden killer if the NFL would allow the license. But the shitty players in the league demand too much for their likenesses. Horrible role models."


    Yes….how dare they ask to be fairly compensated for using their likenesses….


    It wasn’t the players.  The League gave EA sole video game rights.  That means no NFL video games that isn’t Madden.  You wanna blame anybody, blame EA for asking for such protection.



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  5. 0
    MrKlorox says:

    Madden is the Tony Hawk Pro Skater of football games. People want NFL, there is only one choice. That doesn’t mean it was good by any means. I played THPS because I enjoy skateboarding.. not because I like Tony Hawk. Now that I have an option to choose a different game (skate), I certainly will.

    Backbreaker looked to be a Madden killer if the NFL would allow the license. But the shitty players in the league demand too much for their likenesses. Horrible role models.

  6. 0
    TK n Happy Ness says:

    Of course Madden makes that much. What other NFL choice do people have? None, because of these assholes at EA and their exclusive deal!

    When Jack Thompson runs his mouth, does anyone really care what he has to say anymore?

  7. 0
    Bennett Beeny says:

    Because of the ban on other games on using player likenesses and names, EA has a virtual monopoly on football games.  I like Madden Football, but I’d like to have the choice between competing game designs.  Lack of competition is not good for anyone – it encourages the sort of stagnation that we’ve seen in EA’s sports line-up in the last few years.

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