EA Sports is proposing a 10% revenue share for universities who agree to be in their College Football video game set to be released in July 2024.
Schools who choose to participate will receive guaranteed payouts of between $10,000 and $100,000 per year. Those payouts will be based on a tier system based primarily on historical end of year top 25 rankings in the AP Poll.
While this is good money for minimal work, the money isn’t the real incentive here. Most big time college football programs routinely bring in $50 million+ per year in revenue. The extra $100,000 per year they’ll receive from EA will be little more than a rounding error.
The real incentive is not being left behind in recruiting battles. Yes, it is incredibly silly that a high school recruit might base a huge life decision (at least in part) on which school they played with in their favorite video game.
But 17 year old kids don’t always make the most rational decisions and the reality is that very few programs would intentionally exclude themselves from the game. College kids love to play video games especially one where they can play as themselves.
We already know that the vast majority of college football programs will be in the game. Every major conference and the expended 12 team College Football playoff has also signed on.
The terms of those deals haven’t yet (and may never be) known. However, we do know the terms for the colleges. They will receive guaranteed revenue based on this tier system:
- Tier 1 – $104,900
- Tier 2 -$62,900
- Tier 3 – $41,900
- Tier 4 – $10,400
Big time schools like Alabama and Ohio State will be in Tier 1 and will receive a guaranteed payout of $104,900 per year. Programs that haven’t seen as much success will have lower payouts.
The payout structure was proposed for an initial term of 4 years. Schools will move up and down in the tiers each year based on how their seasons go.
The numbers above represent guaranteed money for schools. Each school can make additional money based on how well the game sells and from in-game content sales (read Ultimate Team).
EA has proposed a total of 10% revenue share. Based on the tier system, as well as making a few assumptions, we can forecast how much revenue EA expects their College Football 25 game to bring it.
There are approximately 130 FBS schools and at this point we don’t know how many programs will be in each tier. However, just as a quick exercise let’s assume that they are evenly distributed among the different tiers. In that case, there will be 32.5 schools in each tier.
32.5 teams will get paid $104,900, 32.5 teams will get paid $62,900, 32.5 teams will get paid $41,900, and 32.5 teams will get paid $10,400.
That results in a total yearly payout to schools of: $7,153,250. The schools receive a 10% revenue share so that tells us EA expects to make revenue of a little over $70 million on game sales.
With an average sale price of $69.99 per game sold, that translates into a forecast of about 1 million games sold per year. Remember though, Ultimate Team is the big revenue generator historically bringing in 3 times more money than game sales.
Ultimate Team is already confirmed to be included in the EA Sports College Football 25 game. If Ultimate Team has similar success in college football as it has in EA Sports’ other video games, schools could see significantly increased payouts.
Along with the schools, conferences, and playoffs EA will have to pay current college players for usage of their name, image, and likeness (NIL). We project for payments to student athletes to account for another ~10% of revenue.
The 10% revenue share for schools was an increased proposal from EA’s original revenue share offer to schools. Nothing has been finalized yet so we don’t know if that 10% number is set in stone or just a starting spot for negotiations. As we get more information this, we’ll be sure to pass it along.
Thoughts on this?
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