• Take-Two, NBA Extend Global Partnership & Licensing Deal

    This morning, the NBA and Take Two have announced a multi-year global partnership extension believed to be for seven years and worth up to $1.1 billion to the NBA and the NBA Players Association. The Wall Street Journal is reporting that this extension is worth more than double their previous deal in 2011. The deal value is based off sales of Take Two's NBA games, coming on the heels of NBA 2K18 selling over 10 million copies.

    If the numbers are correct, this puts the value of the deal over $157 million dollars per year. Where does this leave other potential licensees and competitors? Could Take Two have just priced out other competitors, such as EA SPORTS' NBA LIVE Franchise? Or will the NBA give them and others a deal based purely on sales? It is worth watching to see if/when any extension with the NBA/NBAP and EA SPORTS is made or announced.

    In 2011, the NBA put out a press release announcing the extension of deals with both Electronic Arts and Take Two Interactive. Today's announcement focused solely on Take Two.

    Is EA on a different contract timetable than Take Two? It is worth monitoring if/when any future announcements are made regarding extension of that deal, as well as terms.

    Also, given the large value of this deal, is it possible Take Two will honor the request of Charles Barkley and be giving money to the NBA Retired Players Association?

    Take Two's NBA portfolio currently includes: NBA 2K, NBA 2K Online and NBA 2K Online 2, NBA 2K Mobile, MyNBA 2K19 (mobile), publishing NBA 2K Playgrounds 2, and the NBA 2K League.
    This article was originally published in forum thread: Take-Two, NBA Extend Global Partnership & Licensing Deal started by cdj View original post
    Comments 2 Comments
    1. Rudy's Avatar
      Rudy -
      I thought I read Live has its own deal based on percentages. I don’t think 2K is worrie about them tho lol.
    1. cdj's Avatar
      cdj -
      Quote Originally Posted by Rudy View Post
      I thought I read Live has its own deal based on percentages. I don’t think 2K is worrie about them tho lol.
      Pretty sure they do, but I wonder if 2K put the squeeze on them. Here's my math/thinking:

      I assume there is a flat rate for the license. This way, no matter how many copies are sold the NBA & NBAP get something. (And, I guess this plus approval helps keep shovelware or garbage products from flooding market.)

      Beyond that, the WSJ assumed that royalties include typically around 15% of sales, but also assume 2K is paying north of that in this deal.

      Maaaaybe, the league keeps the same base rate + royalty rate and nothing changes for EA. However, if one partner is willing and able to pay a higher royalty rate, why wouldn't it be expected of all partners? If the WSJ is correct on that belief, it doesn't make sense that a company (Take Two/2K) would pay (let's say) 20% on royalties while a competitor (even a distant one like EA) is paying less.

      IMHO, the fact we've heard nothing on an extension from EA & the NBA is worth watching and the longer we go without, the more likely something has gone wrong or is changing. (In 2011, the previous year each signed a licensing extension, it was announced in a singular press release by the NBA.)

      EA has an investor conference call on February 5, so maybe something is disclosed then. Should EA be leaving the NBA market or even going solely to streetball with the player license (not the league one), I doubt we hear anything until post-release support of NBA LIVE 19 has concluded. That could be anywhere after the All-Star Game or as late as NBA Finals, really. ASG likely the last patch with game content; Finals the last bit of LUT content.