scored another sports deal Monday, announcing an exclusive agreement to produce college football video games.
Under the six-year deal with the Collegiate Licensing Company -- a marketing company that represents the National Collegiate Athletic Association and more than 200 colleges and universities -- EA will have the sole right to produce games for consoles and handhelds. As part of the deal, the CLC gave EA the right to use team names and stadiums in the games.
The deal will begin later this summer with the release of EA's
NCAA Football 2006
. The companies did not disclose the financial terms of the arrangement.
"Our NCAA football franchise is a key element in our EA Sports brand lineup and we are pleased to have secured the NCAA license," said Jeff Karp, EA's group vice president of marketing, in a statement.
Representatives of EA and the CLC did not immediately return calls seeking comment.
The deal is only the latest volley in the sports game wars.
In recent years, EA has been the dominant sports game maker. But last year,
cut into EA's market share by teaming up with Sega to offer the ESPN line of sports games at discount prices.
EA reacted initially by offering promotions and slashing prices. But it then took the offensive, signing exclusive arrangements with the
National Football League and with
ESPN division. Take-Two later
responded by signing a limited exclusive deal with Major League Baseball.
EA's deal with CLC is more about warding off potential threats than responding to actual ones. As EA noted in its statement on the deal, its
NCAA Football 2005
was the only college football title released last year.
The move indicates that EA realizes how important the sports segment is to its overall business, said Michael Pachter, an analyst with Wedbush Morgan Securities.
"They're making sure they secure all those franchises and have recurring revenue from sports without competition," said Pachter, whose firm has not done any recent investment banking business with Electronic Arts.
But Pachter noted that EA was sold on the news, indicating at least some skepticism with the exclusives strategy, especially in a case such as with college football where the company didn't have any present competitors.
"These guys are spending more money and seeing cost structure go up, at least in the short term," he said.
In recent trading, shares of EA were off 77 cents, or 1.5%, to $50.29.