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FIFA And EA Sports’ Potential Breakup Reveals A Massive Power Shift

By News Creatives Authors , in Business , at October 27, 2021

Just days after the successful launch of the world’s most popular soccer video game, FIFA 22, makers EA Sports hinted of a massive change.

“As we look ahead,” wrote EA Sports Group general manager Cam Weber in a blog post, “we’re exploring the idea of renaming our global EA Sports [soccer] games. This means we’re reviewing our naming rights agreement with FIFA.”

In other words, the FIFA branding might go, breaking a 30-year partnership that has become iconic.

The pair’s current ten-year deal expires after the next edition, or up until the 2022 Qatar World Cup, and although there might yet be a new agreement struck, rarely do negotiations that are progressing well result in public statements about alternative solutions.

Reports suggest there are a couple of reasons FIFA and EA Sports may part ways. 

The first is financial: FIFA wants a raise that, according to the New York Times, would earn them more than $1 billion for every four-year World Cup cycle, a significant bump on the current $150 million EA Sports pays.

Another apparent stumbling block comes from the other side of the negotiating table. The video game manufacturer is reportedly keen to increase what it was getting from FIFA, with real game highlights and fan tokens identified as areas for expansion.

But the bigger question is: Does EA Sports need a deal with soccer’s official governing body at all?

As Weber pointed out in his statement, before hinting at a potential split with FIFA, the organization is not exactly lacking in the agreements that give them the rights to feature soccer’s biggest players and most popular clubs.

“We focus so much energy on the collective strength of over 300 individual licensed partners that give us access to 17,000+ athletes across 700+ teams, in 100 stadiums and over 30 leagues around the world,” said the GM. “We continually invest in the partnerships and licenses that are most meaningful to players, and because of that, our game is the only place you can authentically play in the iconic UEFA Champions League, UEFA Europa League, CONMEBOL Libertadores, Premier League, Bundesliga, and LaLiga Santander.”

The only gold nugget missing from that elite roster of soccer intellectual property is of course the World Cup, which belongs to FIFA. But with the competition coming around only every four years, EA Sports could be forgiven for thinking gamers might not switch off because they can’t replicate the competition’s action point-by-point down to the trademarked trophy.

Even in a FIFA-less EA Sports universe, stars like Kylian Mbappe, Neymar and Erling Haaland will be just as accessible in their club uniforms on the world’s most popular soccer game.

Beyond the significance of breaking up a three-decade-old super-brand, the reason a split between FIFA and EA Sport would be so significant is that it would represent a break in the traditional power structure. 

It is a sign that the governing body and its flagship event might not be the zenith of the game any longer.

If that is changing, then there could be a lot more to follow.

FIFA, UEFA and the odd power dynamic

In his book Goal: The Ball Doesn’t Go In By Chance, Manchester City chief executive Ferran Soriano points out the unusual power dynamic that exists between the sport’s governing bodies and those it regulates.

“The National Associations, UEFA, and FIFA are the [soccer] industry regulators,” he wrote,” but they also have their own teams—the national teams—that compete in competitions they regulate and run. Thus, they compete with the clubs for the audience: Television channels can decide to buy the World Cup or the Champions League. In one case, the income goes to FIFA, and in the other, it goes to UEFA and the clubs.

“They also compete for sponsors, who can choose to support the national team or the Euro Cup instead of sponsoring a club or the Champions League. They exercise their powers in very favourable conditions, they fix the calendar, the competition rules, and, especially, they take employees (the players) from the clubs as required and do so without paying them.”

A more “normal situation,” Soriano suggests, would be for the UEFA and FIFA to “regulate and not compete.”

He then adds that he tried to improve the situation while he was chief executive at FC Barcelona by lobbying for clubs to have greater participation in the decision-making processes.

The most substantial effort to do just that came this April with the failed attempt by 20 of the world’s biggest teams to form a breakaway European Super League.

Although the attempt failed, it demonstrated just how far that clubs are now willing to test the unique relationship described by Soriano. The value in the market FIFA and UEFA currently possess is under threat.

The governing bodies pulled rank when the clubs tried to make the break, warning that players who competed in the ESL would be banned from international tournaments, but the whole affair showed their vulnerability.

It is only the continued cooperation of these teams—whose brands in many cases are arguably as great as, if not greater than, the competitions in which they play—that allows FIFA and UEFA to continue running the show.

The authority of those organizations is breaking down in other ways too.

At the September international break, the pre-eminence of international soccer was challenged by several Premier League clubs. The teams did not want to release their players to South American nations because Covid-19 regulations would then rule them out of future club games.

In this context, the prospect of EA Sports shedding the FIFA name feels inevitable. 

The vast majority of clubs already individually deal with the company, so what use is it spending a billion dollars on the regulator’s name?

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