Players to receive $40 million
Video game producer EA Sports and Collegiate Licensing Company will pay around $40 million to settle lawsuits brought by former players whose likenesses were used without compensation, a source familiar with the negotiations told ESPN's Tom Farrey on Friday.
The number of players to benefit is between 200,000 and 300,000, said Steve Berman, managing partner of the law firm Hagens Berman, who served as co-lead counsel in the class-action lawsuit brought by the players.
Current players are eligible to take part in the settlement, sources told ESPN, raising questions about how the NCAA will treat any such financial awards under its rules, which prohibit players from making money from their name as an athlete.
Stacy Osborn, NCAA spokeswoman, told ESPN: "Since we have not had a chance to review the proposed terms of the settlement, we won't speculate."
Rob Carey, a lawyer for the plaintiffs, said there is precedent for allowing such payments in the "Johnny Football" case.
A man who sold shirts using Texas A&M quarterback Johnny Manziel's trademarked name was sued, and the NCAA has ruled that if Manziel collects damages, he can keep them, even during his eligibility.
It has not yet been determined how the settlement money will be divided. Much of the focus of the lawsuits has been on EA Sports' college football game. Since the lawsuit brought by former UCLA basketball player Ed O'Bannon was also settled, though, former players who did not appear in video games will still receive some sort of compensation, a source told ESPN.
Although the video games did not use their names, the former college athletes alleged EA Sports used the same jersey numbers, heights, weights, skin tones, hair colors and home states in its in-game bios, not only without permission but also without compensation.
Berman said negotiations started in earnest the past few weeks on the heels of an appellate court affirming in July a U.S. District Court decision that EA could not use a First Amendment defense of free speech.
EA Sports -- which will not admit any wrongdoing as part of the settlement agreement -- said in a statement Thursday that "we follow rules that are set by the NCAA -- but those rules are being challenged by some student-athletes."
The NCAA said earlier this year that it would take its name off the college football game, but that does not absolve the governing body of previous legal exposure. With EA Sports and CLC dropped as defendants, the NCAA will be litigated against alone in the class-action lawsuits spearheaded by former college quarterback Sam Keller and O'Bannon.
NCAA chief legal officer Donald Remy told USA Today that the NCAA was "not prepared to compromise on this case."
Michael Hausfeld, another of the plaintiffs lawyer, believes the NCAA will argue the case all the way to the Supreme Court.
"I think that's a realization that that's where they have to take it," he said. "You don't make that announcement if you have comfort that you're going to win at the trial and appellate stages."
Beginning next year, EA Sports no longer will produce its popular "NCAA Football" game, which included former Michigan star Denard Robinson on the cover for the 2014 version, which was released in July.Information from ESPN business reporter Darren Rovell was used in this report.