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Report: EA Sports, college athletes agree on settlement of $40 million

May 31, 2014, 1:10 PM EDT

Video game manufacturer and NCAA licensing partner EA Sports has reached a $40 million settlement with college football and basketball players for improperly using the likenesses of athletes, according to a report from ESPN.com‘s Tom Farrey.

The settlement was reached with a federal court in Oakland, California on Friday night and it leaves the NCAA alone to defend itself in the upcoming antitrust trial spearheaded by former UCLA basketball star Ed O’Bannon.

The settlement could deliver up to $4,000 to as many as 100,000 current and former NCAA athletes who appeared in EA Sports college basketball and college football video games since 2003.

“I’m thrilled that for the first time in the history of college sports, athletes will get compensated for their performance,” said Steve Berman, co-lead counsel for the plaintiffs to Farrey. “It’s pretty groundbreaking.”

Berman represents former Nebraska and Arizona State quarterback Sam Keller and 77 percent of this latest proposed settlement would go to players represented by Berman. O’Bannon’s class of players would receive 12 percent of the settlement while former Rutgets football player Ryan Hart and former West Virginia football player Shawne Alston would receive the final 10 percent for their group of players.

O’Bannon, Keller, Hart, Alston and all other named plaintiffs will also receive payments between $2,500 and $15,000 for their time and efforts in representing the classes in the case.

The settlement still needs approval from U.S. District Court Judge Claudia Wilken, and if it is approved, the lawyers in the case will receive up to one-third of the settlement funds, or $13.2 million, plus a maximum of $2.5 million in legal fees.

If Wilken approves, former players in EA Sports video games since 2003 will be alerted to the availability of payments and will need to register to collect. Each player will use a formula based on how many years they appeared on rosters in EA Sports video games. Lawyers representing to plaintiffs estimate that there are approximately 140,000 to 200,000 annual roster appearances in all three classes.

Some current college athletes would also be due compensation under this proposed settlement and the legal outcome creates a new dilemma in the NCAA’s quest to keep athletes from profiting from the use of their images as athletes.

An agreement in principle happened last September through Electronic Arts and the Collegiate Licensing Corporation, but issues held up the proposed settlement. The NCAA objected to their co-defendants leaving and the lawyers representing the three different classes of players couldn’t agree on the financial aspect.

In September of 2013, EA Sports announced that it’s college football series would be placed on hiatus with no new game coming in 2014 while EA hasn’t made a college basketball video game since NCAA Basketball 2010.

This is a landmark settlement as college athletes look like they’ll finally claim some money for their NCAA likenesses appearing in video games and it sets up an interesting court battle between O’Bannon and the NCAA in the upcoming antitrust lawsuit that is scheduled to begin on June 9th.

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