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As Legal Battle Continues, N.C.A.A. Ends Tie With Electronic Arts

July 17, 2013 by Leave a Comment

For years, the N.C.A.A. heard concerns that the video games bearing its name and logo infringed on the rights of student-athletes. The animated avatars often bore a resemblance to actual players, with similar attributes and physical characteristics, even the same jersey numbers.

But N.C.A.A. executives dismissed the criticism and did not limit the game’s maker, Electronic Arts, from producing as realistic an experience as possible, for fear of losing the lucrative contract.

On Wednesday, however, the N.C.A.A. became the one to sever ties, announcing that it would not renew its contract with E.A. next year. The decision is perhaps the biggest real-world development in a more than four-year-old legal battle focused on the rights of college athletes on how their likenesses can be used and what, if any, compensation they should receive.

The suit, filed by the former U.C.L.A. basketball player Ed O’Bannon, could change the landscape of college athletics by requiring that student-athletes receive a share of revenue from video games and broadcast rights.

The N.C.A.A. has mounted a vigorous legal defense in the case and maintained Wednesday that it “has never licensed the use of current student-athlete names, images or likenesses to E.A.,” which is also a defendant in the case.

The N.C.A.A. cautioned that its decision not to renew the video game contract should not be seen as a signal that it would back away from its legal stand.

“We are confident in our legal position regarding the use of our trademarks in video games,” the N.C.A.A. said. “But given the current business climate and costs of litigation, we determined participating in this game is not in the best interests of the N.C.A.A.”

The N.C.A.A. said that universities licensed their own trademarks for the video game, meaning it could live on without the association’s name on it. The universities “will have to independently decide whether to continue those business arrangements in the future,” the N.C.A.A. said.

Many universities license their rights through Collegiate Licensing Company, which is also a defendant in the case.

O’Bannon’s legal team saw the N.C.A.A.’s move as “arrogant, petty, and punitive,” saying it “undermined” its position “by unilaterally” ending the relationship with E.A.

“Rather than share any proceeds from the use of the likeness and names of players in the E.A. game, they bite their nose to spite their face and hurt the players and the consumers,” said Michael Hausfeld, O’Bannon’s lawyer.

Stacey Osburn, a spokeswoman for the N.C.A.A., said, “This decision and the N.C.A.A.’s business relationship with E.A. only pertained to the N.C.A.A. logo and name.”

“Student-athletes were never a part of this relationship, and plaintiffs’ attorneys know it,” she said, adding that the N.C.A.A. was paid $545,000 annually, which she said was used to support student-athletes.

E.A. has denied any wrongdoing in the case.

A federal judge in Oakland, Calif., is considering whether to allow the case to proceed as a class action, potentially making way for thousands of college athletes past and present to join the case. The judge, Claudia Wilken, heard arguments on the class-action motion last month.

The case file includes e-mails in which N.C.A.A. executives discussed concerns that the video games were “too close to reality.” In 2003, one executive warned another in an e-mail to “be cautious” about addressing such issues because “any more ‘watering down’ of the video games will likely move the manufacturers to cease operations with us.”

Robert Boland, a sports law professor at New York University, said the move could signal a fracture between the N.C.A.A. and E.A.

“You say that in a normal course of business, almost no one would give up the video game, and certainly E.A. is the biggest” game maker in the genre, Boland said. “But from a legal standpoint, it looks like the N.C.A.A. has determined that maybe this isn’t a place it should be in.”

Sonny Vaccaro, a former sports marketing executive and a longtime critic of the N.C.A.A., who originally put O’Bannon in touch with his lawyers in this case, said Wednesday’s announcement was “a big victory for college athletes” and evidence that the lawsuit was “starting to gain some traction in the world we live in.”

“I’m very happy because I see it as the N.C.A.A. starting to get the feeling that there can be changes in the future,” Vaccaro said.

The N.C.A.A. said that NCAA Football 2014, which was released this month, would be the last to include the organization’s name and logo. It said it announced its decision now, well in advance of the contract expiring next June, to give E.A. time to plan for next year.

“I’m sure gamers are wondering what this means,” Andrew Wilson, the executive vice president of E.A. Sports, said in a statement. “This is simple: E.A. Sports will continue to develop and publish college football games, but we will no longer include the N.C.A.A. names and marks.

“Our relationship with the Collegiate Licensing Company is strong, and we are already working on a new game for next-generation consoles which will launch next year and feature the college teams, leagues and all the innovation fans expect from E.A. Sports.”

Article source: http://www.nytimes.com/2013/07/18/sports/as-legal-battle-continues-ncaa-ends-tie-with-electronic-arts.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Fair Game: New York Fed Agreed to Testify for Bank of America

March 2, 2013 by Leave a Comment

A.I.G., which is suing Bank of America to recover losses it suffered on those securities, has calculated the value of the fraud claims at $7 billion.

Late on Thursday, a copy of the actual agreement came to light. It was filed by Bank of America in a California court that is hearing the matter of who owns those fraud claims — A.I.G. or the New York Fed. The agreement was also filed by the New York Fed in a related lawsuit in the Southern District of New York, where the New York Fed asked that the court keep the agreement under seal.

A reading of the document makes it clear why.

The agreement spells out the terms of a deal in which the New York Fed received $43 million from Bank of America’s Countrywide unit. The money changed hands to settle a narrow dispute involving cash flows on several mortgage securities held by an investment vehicle, known as Maiden Lane II. That vehicle was created by the New York Fed as part of the rescue of A.I.G., which had held the Countrywide securities. The previously confidential agreement released Bank of America from all litigation claims on the securities held by Maiden Lane II.

But in exchange for that $43 million, the New York Fed did something else for Bank of America. It agreed to testify on behalf of the bank in its legal battle against A.I.G. over fraud claims.

In that matter, Bank of America has argued that A.I.G. has no right to sue it for fraud because A.I.G. sold the securities to Maiden Lane II and so transferred the litigation rights to the New York Fed. A.I.G., however, maintains that the Maiden Lane agreement never specified the transfer of the right to sue for fraud and that an explicit transfer is required by New York law, which governs the agreement. The New York Fed provided Bank of America with two affidavits supporting the bank’s view of who owned the mortgage securities’ fraud claims.

Two weeks ago, it was unclear why the New York Fed gave Bank of America the affidavits. But now, its promise to testify “as needed,” shown in the formerly confidential settlement, addresses that oddity. It was a contractual obligation.

Interestingly, the New York Fed did not tell the California court that its affidavits came about because of its deal with Bank of America. The affidavits came from James M. Mahoney, a vice president at the New York Fed, and Stephanie A. Heller, its deputy general counsel.

But those affidavits differ from the position taken earlier by Thomas C. Baxter Jr., the New York Fed’s general counsel. In a letter to A.I.G. in October 2011, Mr. Baxter said that he and his colleagues “agree that A.I.G. has the right to seek damages” under securities laws for the instruments it sold to Maiden Lane II.

Michael Carlinsky, A.I.G.’s lawyer at Quinn Emanuel Urquhart Sullivan, said on Friday that he found it “disturbing” that the New York Fed made a contract to “assist Bank of America in its defense of A.I.G.’s lawsuit.”

Also on Friday, I asked the New York Fed why it had included this promise of legal support for Bank of America in the settlement agreement. Jack Gutt, a spokesman, said in a statement that the New York Fed had intended to hold the litigation rights and that the declarations were true.

“The New York Fed did not agree to provide the declarations to benefit B. of A., but rather because doing so helped the New York Fed obtain the best possible settlement” for Maiden Lane II, Mr. Gutt said. “In agreeing to this provision as part of what the New York Fed believed was a favorable settlement agreement, the New York Fed was concerned exclusively with advancing the taxpayer interest.”

I also asked a Bank of America spokesman whether the bank had paid more in the settlement because of the New York Fed’s promise to testify. He declined to answer that question, saying, “Countrywide provided fair value for a complete release of claims by the Federal Reserve Bank of New York, and the Fed agreed to provide testimony standing behind what it had formally represented to Countrywide regarding the assignment of claims from A.I.G.”  

Article source: http://www.nytimes.com/2013/03/03/business/new-york-fed-agreed-to-testify-for-bank-of-america.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Consumer Protection Nominee Promises Cooperation

September 6, 2011 by Leave a Comment

WASHINGTON (AP) — President Barack Obama’s nominee to head the new Consumer Financial Protection Bureau is promising to be accountable to Congress and is playing down the lawsuits his agency will be able to file against banks and other financial institutions.

Even so, Richard Cordray’s chances of winning Senate approval to lead the agency remained uncertain. Republicans have promised to block any nominee to head the agency unless the bureau is changed in ways they say will make it more accountable. Democrats say those changes would weaken its powers.

In remarks prepared for his confirmation hearing Tuesday with the Senate Banking Committee, Cordray said his experience as former Ohio attorney general taught him that litigation can be slow, costly and unnecessarily acrimonious. He said he would use lawsuits “judiciously,” and noted that the bureau has other powers to resolve problems, including issuing rules, writing reports and examining large banks and many nonbank institutions.

“Enforcement, of course, will still have an important role at the consumer bureau,” he said.

In a bid to reach out to Republicans, Cordray also said that if confirmed, “I promise that you will have one person who will always be accountable to you for how we are carrying out the laws laid down by Congress and I will be eager to hear your thoughts about how we should do our work.”

The new bureau, which began functioning in July, was created after the financial crisis of three years ago. The bureau was part of the market regulation overhaul that President Barack Obama pushed through Congress last year over solid GOP opposition. It is designed to protect consumers taking out loans, using credit cards and making other financial transactions.

Obama appointed Harvard law professor Elizabeth Warren, a longtime consumer advocate, to help set up the agency. But facing staunch Republican opposition, he never nominated her to head it despite lobbying on her behalf by liberals and consumer groups.

Though Democrats control the Senate, the chamber’s 44 Republicans have said they will oppose any nominee without a revamping of the bureau that would include replacing the director with a bipartisan commission and giving Congress direct power over its budget. Democrats in the 100-member Senate can only count on 53 votes to end delaying tactics — seven short of the 60 needed to do so.

“Opposition to or support of Mr. Cordray’s nomination will become relevant as soon as the president agrees to make the structural changes we’ve requested,” Sen. Richard Shelby of Alabama, top Republican on the banking panel, said in a written statement. Shelby said that until then, Republicans still say, “No accountability, no confirmation.”

Hoping to bolster Cordray’s chances, five state treasurers — all Democrats — released a letter Monday that they sent last week to Shelby and banking committee chairman Tim Johnson, D-S.D., supporting Cordray, a former Ohio treasurer.

“Rich understands that sober, conservative and even-handed fiscal management produces the best financial results over the long term,” they wrote.

Article source: http://feeds.nytimes.com/click.phdo?i=884bf3cc57a8973bb54b81ef328f4079

Filed Under: Business News Tagged With: , ,