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Take-Two, Baseball Union Sign Videogame Agreement
By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL
January 24, 2005; Page B4
In the latest turn of a contest over the future of sports videogames, Take-Two Interactive Software Inc. reached a game-software licensing agreement with the union representing Major League Baseball players, according to people familiar with the matter.
Under the seven-year agreement, which could be announced as early as this week, Take-Two has agreed to pay a licensing fee of between $80 million and $90 million to the Major League Baseball Players Association, for rights to begin publishing baseball videogames starting next year, the people said. A person close to the union said the group is valuing the deal closer to $150 million, including commitments by the company to market future baseball videogames.
Take-Two has also been negotiating with Major League Baseball for rights to use team names and other assets in a baseball videogame; the status of those talks couldn't be learned. The deal with the union, though, is a crucial precursor to any deal with the league because it allows Take-Two to use the names and likenesses of professional ballplayers in its games. A spokesman for Take-Two, New York, declined to comment.
The deal is a win for Take-Two in sports, a category that accounted for about $1.1 billion, or nearly a fifth, of all U.S. console-game sales last year. The company has suffered a string of blows in sports at the hands of Electronic Arts Inc., the biggest game publisher, which recently struck exclusive agreements with the National Football League and Walt Disney Co.'s ESPN sports channel.
Take-Two holds rights to co-publish sports titles, including football, under the ESPN name, though those rights won't be renewed because of the recent EA deals. EA agreed to pay ESPN about $850 million and advertising commitments over their 15-year deal, while EA signed a five-year deal valued at more than $300 million with the NFL and the football players association, people familiar with the pacts said.
Take-Two's deal with the baseball players union gives it exclusive "third-party publishing" rights to do a videogame featuring professional ballplayers -- a provision that shuts out companies like EA from the category while allowing makers of game consoles such as Sony Corp., Microsoft Corp. and Nintendo Corp. to publish their own baseball games, people familiar with the deal said. EA was among the losing publishers in the bidding for a deal with the baseball players union.
A spokesman for EA, of Redwood City, Calif., said Take-Two's deal appear to be pricey because it still allows competition from console makers. "If that's the agreement, it's not exclusive -- it simply excludes EA and lets several other publishers make MLB baseball games," said the spokesman, Jeff Brown.
By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL
January 24, 2005; Page B4
In the latest turn of a contest over the future of sports videogames, Take-Two Interactive Software Inc. reached a game-software licensing agreement with the union representing Major League Baseball players, according to people familiar with the matter.
Under the seven-year agreement, which could be announced as early as this week, Take-Two has agreed to pay a licensing fee of between $80 million and $90 million to the Major League Baseball Players Association, for rights to begin publishing baseball videogames starting next year, the people said. A person close to the union said the group is valuing the deal closer to $150 million, including commitments by the company to market future baseball videogames.
Take-Two has also been negotiating with Major League Baseball for rights to use team names and other assets in a baseball videogame; the status of those talks couldn't be learned. The deal with the union, though, is a crucial precursor to any deal with the league because it allows Take-Two to use the names and likenesses of professional ballplayers in its games. A spokesman for Take-Two, New York, declined to comment.
The deal is a win for Take-Two in sports, a category that accounted for about $1.1 billion, or nearly a fifth, of all U.S. console-game sales last year. The company has suffered a string of blows in sports at the hands of Electronic Arts Inc., the biggest game publisher, which recently struck exclusive agreements with the National Football League and Walt Disney Co.'s ESPN sports channel.
Take-Two holds rights to co-publish sports titles, including football, under the ESPN name, though those rights won't be renewed because of the recent EA deals. EA agreed to pay ESPN about $850 million and advertising commitments over their 15-year deal, while EA signed a five-year deal valued at more than $300 million with the NFL and the football players association, people familiar with the pacts said.
Take-Two's deal with the baseball players union gives it exclusive "third-party publishing" rights to do a videogame featuring professional ballplayers -- a provision that shuts out companies like EA from the category while allowing makers of game consoles such as Sony Corp., Microsoft Corp. and Nintendo Corp. to publish their own baseball games, people familiar with the deal said. EA was among the losing publishers in the bidding for a deal with the baseball players union.
A spokesman for EA, of Redwood City, Calif., said Take-Two's deal appear to be pricey because it still allows competition from console makers. "If that's the agreement, it's not exclusive -- it simply excludes EA and lets several other publishers make MLB baseball games," said the spokesman, Jeff Brown.
This is the kind of news that makes me laugh and cry at the same time. It looks like the entire sports game market is at risk of going to **** because of all this crap that companies are pulling.
I mean, good lord, this is getting ridiculous.
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