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Electronic Arts may be dropping the FIFA license for one simple reason: it costs too much

chelsea players punching the air after scoring a goal
(Image credit: EA)

FIFA is an extraordinarily lucrative license for Electronic Arts. The annual FIFA games are always major sellers, but the real money is in Ultimate Team: EA said in its Q3 FY21 report that net revenues arising from "extra content sales" for Ultimate Team games (which includes NFL and NHL games, but is primarily FIFA) were nearly $1.5 billion in its 2020 fiscal year.

Given the size of that money mountain, it seemed a bit odd that EA would consider terminating the relationship, yet that's exactly what it did in a press release issued last week. "As we look ahead, we’re also exploring the idea of renaming our global EA Sports football games," EA Sports Group general manager Cam Weber said. "This means we’re reviewing our naming rights agreement with FIFA, which is separate from all our other official partnerships and licenses across the football world."

Shortly after that, it made the move to trademark EA Sports FC in Europe, for "computer game software" and "entertainment services." While EA didn't comment on the filings, some fans saw it as the writing on the wall: Early-stage preparation for the looming, inevitable end of EA's partnership with FIFA. But why?

According to the New York Times, the reason is entirely predictable: money. The report says FIFA wants more than twice as much as it is currently getting for the licensing rights, which would take EA's cost to more than $1 billion for each four-year cycle between World Cups. FIFA also apparently wants to put limits on EA's exclusivity: EA Sports reportedly wants to pursue other FIFA-related monetization options such as highlights of real soccer games, tournaments, and NFTs, because of course NFTs are involved. FIFA—which by the way stands for Fédération Internationale de Football Association, or International Federation of Association Football—would rather reserve some of those money-making options for itself.

It's not a done deal yet, but EA is clearly gearing up for a FIFA-free future. It sounds potentially catastrophic, but as the NYT report points out, EA's absolute dominance of the soccer subgenre (including dozens of other league licenses) means it may be able to emerge from such a dramatic rebranding relatively unscathed. EA recently renewed its partnership with worldwide professional soccer players union FIFPro, for instance, which gives it the right to use "thousands of player names and likenesses" in its games. And even if it has to give up the FIFA license, it will still have exclusive rights to UEFA Champions League, CONMEBOL Libertadores, Premier League, Bundesliga, and LaLiga Santander, among others.

Former EA Sports boss Peter Moore, who left Electronic Arts in 2017 to head up Liverpool FC, said EA may also be concerned about where the FIFA license ends up if it agrees to accept narrower exclusivity terms, which could be why it's willing to walk away from the whole thing rather than share.

"I’m going to say, 'Wait a second: We have literally spent hundreds of millions of dollars building this and you’re telling me that Epic Games can come in and get a license to the name that we have built and that we have put front and center and that has become synonymous with games?'" Moore said. "Then, yeah, I’m negotiating and I’m fighting that."

A decision on the future of EA's FIFA license is expected by the end of the year.