Retirees file class-action suit vs. union for video-game royalties

Updated: October 19, 2008, 12:38 PM ET
Associated Press

SAN FRANCISCO -- Fans of the popular "Madden NFL" video game by Electronic Arts Inc. can play vintage matchups such as the 1967 Green Bay Packers against the 1971 Dallas Cowboys.

Just don't look for either team's dominant left cornerback: Hall of Famer Herb Adderley, who played for both Super Bowl champions. There is only an anonymous video game figure with Adderley's weight and height displayed at left cornerback on each defense.

That did not sit well with Adderley, so he sued. His class action lawsuit on behalf of more than 2,000 retired players is set to start Monday in federal court, with the retirees accusing the NFL Players Association of cheating them out of millions of dollars in royalties from video games, trading cards and others sports products.

They contend that the union actively sought to cut them out of licensing deals so active players could receive bigger royalty payments. As proof, the retirees point to a 2001 letter from an NFLPA executive telling EA to scramble the images of retired players in "Madden NFL," otherwise the company would have to pay them.

Retired players complain that, even though they signed licensing agreements with the NFLPA during a four-year period that ended in February 2007, they have earned little from the union's lucrative contract with EA.

The $35 million annual contract is the union's largest marketing deal, and the lawsuit is the latest salvo in the increasingly rancorous relationship between retirees and a union they say has given them short financial shrift.

Last year, the union reported to the federal government that it took in $49.8 million in marketing revenue and distributed $26.9 million to active players, while keeping the rest for operating expenses.

The union's central position is that the vast majority of retired players are not very marketable and that companies pay only for access to active players or for marquee retired players such as former 49ers quarterback Joe Montana.

EA did pay $400,000 for rights of NFL Hall of Fame players to market a special edition of "Madden NFL." Adderley and other Hall of Fame members received several thousand dollars each in a deal brokered by the union. Now the retired players say they could have received more from an EA competitor.

Early last year, NFLPA executive Clay Walker told union lawyer Joe Nahra that he forged a deal that gave EA exclusive rights to the Hall of Fame players at "significantly below market." Walker said that Take Two Interactive probably would have paid more to the Hall of Famers to create a rival video game.

Union trial lawyer Jeffrey Kessler defended the deal. "For many, many retired players, there is no market," he said in an interview.

On Wednesday, U.S. District Court Judge William Alsup temporarily barred Adderley's lawyers from telling the jury about the Hall of Fame deal. But the judge said there's a "50-50 chance" he will reverse himself depending on how the union disputes the marketability of retired players.

An EA spokesman did not return telephone calls.

The union's chief defense is that EA, trading card companies such as Topps and Upper Deck and other companies that paid licensing fees "unanimously confirmed that those revenues were paid solely for the rights of active players," according to court documents. The union intends to call company executives to the stand to testify about their disinterest in paying for rights for retired players.

Many retirees have complained that the union has forgotten what past players have contributed to building the NFL into a highly profitable industry that richly compensates owners and players alike.

For the 69-year-old Adderley, who says he is in poor health and struggling to pay medical bills on his $179-a-month NFL pension, the suit is the culmination of his years-long dissatisfaction with the union, including the adequacy of health benefits.

"This is my chance to get some acknowledgment," Adderley said. "The union has treated the retired players poorly and they've succeeded in turning the active players against us."


Copyright 2008 by The Associated Press