The Video Game Loophole – Why Madden Pays Players But Highlights Don't

The Video Game Loophole

Why Madden Pays Players But Highlights Don't

Who Owns The Game? – Part 6 | February 13, 2026

WHO OWNS THE GAME?
Part 0: Who Owns The Catch? — The overview
Part 1: You're Not A Creator — Copyright law and athletic performances
Part 2: The Immaculate Theft — 50 years, $0 to Franco Harris
Part 3: The Residuals Gap — Why actors get paid forever
Part 4: The Taylor Swift Strategy — Reclaiming your masters
Part 5: The Hidden Revenue — What the NFL won't disclose
Part 6: The Video Game Loophole ← YOU ARE HERE
Part 7: The International Comparison — How other countries handle sports IP
Part 8: The Case Nobody Will File — The lawsuit that could change everything

In 2020, EA Sports signed a deal with the NFLPA worth $1.6 billion over seven years for the right to use player names, likenesses, and jersey numbers in Madden NFL video games. That's $228 million per year distributed to active and retired players. Patrick Mahomes gets paid when his digital avatar throws a touchdown in Madden. Tom Brady's estate will get paid every time someone plays as him in franchise mode. The NFLPA negotiated this deal as part of its group licensing program—a collective agreement that allows companies to use player likenesses in exchange for compensation. Now compare that to highlights. When ESPN shows Patrick Mahomes throwing a real touchdown on SportsCenter, Mahomes gets paid nothing. When NFL Films uses Tom Brady's actual Super Bowl footage in a documentary, Brady gets nothing. When a network airs the Immaculate Reception for the ten-thousandth time, Franco Harris's estate gets nothing. Same players. Same performances. But in one case (video games), players get paid. In the other (real footage), they don't. Why? The legal distinction is razor-thin. Madden uses player names and jersey numbers—that's publicity rights, and those survive copyright preemption in video games because the game isn't a "copyrighted broadcast." Real game footage is a copyrighted broadcast—so publicity rights are preempted, and players have no claim. It's the same player. The same likeness. But one triggers payment and the other doesn't, based entirely on whether it's rendered in polygons or captured on film. This is the video game loophole. And it reveals just how arbitrary—and exploitable—the current system really is.

The Madden Deal: How It Works

Let's start with what players actually get from video games.

In 2020, EA Sports (the publisher of Madden NFL) signed a seven-year extension with the NFLPA worth $1.6 billion. This deal gives EA the exclusive right to use NFL player names, likenesses, and jersey numbers in Madden.

Here's how the money flows:

1. EA pays the NFLPA $228 million per year (on average).

This is a group licensing fee. EA isn't negotiating with individual players—it's negotiating with the union, which represents all players collectively.

2. The NFLPA distributes the money to players.

Active players receive a share based on a formula that considers:

• Playing time (starters get more than backups)
• Pro Bowl/All-Pro selections
• Madden rating (higher-rated players in the game get slightly more, though the difference is small)

Estimated payout per active player: $10,000 - $30,000 annually (varies by playing time and accolades).

Retired players also get a share, though it's smaller. The NFLPA allocates a portion of the EA payment to the "Retired Player Fund," which distributes money to former players based on years of service.

Estimated payout per retired player: $1,000 - $5,000 annually (varies by career length).

3. Superstars can negotiate separate deals.

While most players are covered by the group licensing agreement, a few superstars (like Patrick Mahomes, who's on the Madden cover) negotiate separate deals with EA for promotional rights. These deals can be worth millions.

But even without a separate deal, every player in Madden gets paid something through the NFLPA's group licensing pool.

THE MADDEN DEAL: HOW PLAYERS GET PAID

THE CONTRACT (2020):
• EA Sports pays NFLPA $1.6 billion over 7 years
• $228 million/year (average)
• Exclusive rights to use player names, likenesses, jersey numbers in Madden

DISTRIBUTION TO ACTIVE PLAYERS:
• Formula based on playing time, Pro Bowl selections, Madden rating
• Starters get more than backups
• Stars get more than role players
• Estimated payout: $10,000 - $30,000/player/year
• ~1,700 active players = ~$120M total to actives

DISTRIBUTION TO RETIRED PLAYERS:
• NFLPA allocates portion to "Retired Player Fund"
• Distributed based on years of service
• Estimated payout: $1,000 - $5,000/player/year
• ~20,000 living retired players = ~$50M total to retirees

ADDITIONAL DEALS (COVER ATHLETES):
• Superstars negotiate separate deals for cover/promo rights
• Patrick Mahomes, John Madden estate, etc.
• Worth $1M - $5M+ depending on player

TOTAL ANNUAL PLAYER COMPENSATION FROM MADDEN:
$170M - $200M/year to current and former players

WHY THIS WORKS:
Video games use names and numbers (publicity rights). Publicity rights survive in
video games because the game isn't a "copyrighted broadcast." So players have leverage.
NFLPA negotiated group licensing deal. EA pays. Players get checks.

Why Video Games Pay But Highlights Don't

The Madden deal proves players can get paid when their likenesses are used commercially. So why don't they get paid when real game footage is used?

The answer is entirely legal—not economic, not moral, just legal.

The Legal Distinction: Publicity Rights vs. Copyright

Video games (Madden):

• EA creates digital avatars of players using their names, jersey numbers, physical likenesses, and playing styles.
• This is commercial use of publicity rights—state-law protections that give individuals control over use of their name, image, and likeness.
• Video games are not copyrighted broadcasts. They're original creative works (the game software is copyrighted by EA, but it's not a recording of a real event).
• Because video games aren't broadcasts, copyright preemption doesn't apply. Players' publicity rights survive.
• So players (via the NFLPA) can demand payment for use of their likenesses in Madden. EA has to pay or it can't use their names/numbers.

Game footage (highlights, documentaries):

• The NFL (or networks) films real games, creating copyrighted audiovisual works (broadcasts).
• Using that footage is an exercise of federal copyright law, which protects broadcasts as fixed works.
• Players appear in the footage, but their publicity rights are preempted by copyright (Section 301(a) of the Copyright Act).
• This was settled in Dryer v. NFL (2016): copyright preempts publicity rights when the use involves a copyrighted broadcast.
• So players can't demand payment for use of their likenesses in game footage. The NFL owns the copyright. Players have no claim.

The distinction is absurd from a fairness perspective:

• Digital Patrick Mahomes throwing a touchdown in Madden = player gets paid (publicity rights apply)
• Real Patrick Mahomes throwing a touchdown on SportsCenter = player gets $0 (copyright preempts publicity rights)

It's the same player, the same likeness, the same performance. But one is rendered in polygons (not a copyrighted broadcast) and the other is captured on film (copyrighted broadcast). That's the only difference. And it's worth hundreds of millions of dollars.

🔥 WHY VIDEO GAMES PAY BUT HIGHLIGHTS DON'T

MADDEN (VIDEO GAME):
• Uses player names, numbers, likenesses (publicity rights)
• Video game ≠ copyrighted broadcast (it's original creative work, not recording of real event)
• Copyright preemption doesn't apply
• Players' publicity rights survive
• NFLPA can demand payment → EA pays $228M/year
• Players get checks

HIGHLIGHTS (REAL FOOTAGE):
• Uses real game footage (copyrighted broadcast)
• NFL owns copyright to broadcasts (17 U.S.C. § 101)
• Using footage = exercise of copyright (federal law)
• Copyright preempts publicity rights (17 U.S.C. § 301(a))
• Dryer v. NFL (2016): Players can't override NFL's copyright with publicity claims
• Players get $0

THE ABSURDITY:
• Digital Mahomes in Madden → Player gets paid
• Real Mahomes in SportsCenter highlight → Player gets $0
• Same player, same likeness, same performance
• One is polygons (not broadcast), one is film (broadcast)
• That's the only legal difference

WHY IT MATTERS:
The distinction is arbitrary. If publicity rights can survive in video games, why can't
they survive in some uses of real footage (e.g., commercials, documentaries sold for
profit)? The law says copyright always wins. But that's a choice Congress made, not
an immutable fact of nature.

The Ed O'Bannon Case: The NCAA Version

The Madden payment structure didn't always exist. Players had to fight for it. And the fight started in college sports.

In 2009, former UCLA basketball star Ed O'Bannon sued EA Sports and the NCAA. The issue: EA's NCAA Basketball video game used college players' likenesses (jersey numbers, playing styles, physical attributes) without paying them.

EA and the NCAA argued:

• "We don't use players' names, so we're not using their publicity rights."
• "The avatars are generic representations, not specific likenesses."

O'Bannon responded:

• "If you put a 6'8" power forward with #31 on a UCLA roster in 1995, everyone knows that's me. You're using my likeness even if you don't use my name."

The case went to trial. In 2014, a federal judge ruled in O'Bannon's favor:

• EA and the NCAA were using players' likenesses without compensation.
• This violated players' publicity rights.
• The NCAA's amateurism rules (which prohibited paying college athletes) were unlawful as applied to group licensing.

The ruling forced the NCAA to allow college athletes to be compensated for use of their likenesses in video games. EA settled with O'Bannon and other players for $60 million. The company also stopped making NCAA Football and NCAA Basketball games for several years (they've since resumed with new licensing deals that pay players).

The O'Bannon case established the principle: If a video game uses player likenesses—even without names—players must be compensated.

This is why EA now pays the NFLPA $1.6 billion for Madden. The legal precedent made it clear that players have rights in video game contexts.

But that precedent doesn't extend to real game footage. Because footage is copyrighted, and copyright preempts publicity.

THE ED O'BANNON CASE: HOW PLAYERS WON VIDEO GAME RIGHTS

THE SETUP (2009):
• EA Sports makes NCAA Basketball video game
• Uses college players' likenesses (jersey numbers, stats, physical attributes)
• Doesn't use names, claims avatars are "generic"
• Pays players $0 (NCAA rules prohibit payment to amateurs)

THE LAWSUIT:
• Ed O'Bannon (former UCLA star) sues EA and NCAA
• Argument: "If you put #31 on UCLA roster in 1995, that's me—you're using my likeness"
• Claim: Violation of publicity rights, NCAA amateurism rules unlawful

THE RULING (2014):
• Federal judge rules for O'Bannon
• EA/NCAA were using likenesses without compensation
• Violated players' publicity rights
• NCAA amateurism rules unlawful as applied to group licensing

THE SETTLEMENT:
• EA pays $60M to O'Bannon and other players
• EA stops making NCAA Football/Basketball games (resumed years later with payment)
• NCAA forced to allow athletes to be compensated for likeness use in video games

THE PRECEDENT:
Video games that use player likenesses (even without names) must compensate players.
This is why EA now pays NFLPA $1.6B for Madden. O'Bannon established the principle.

WHY IT DOESN'T APPLY TO FOOTAGE:
O'Bannon case was about video games (publicity rights apply). Real game footage =
copyrighted broadcasts (publicity rights preempted). Different legal framework.

Could the Madden Model Expand to Footage?

If players can demand payment for video game use of their likenesses, could they demand payment for footage use?

The legal answer is no—because of copyright preemption. But let's explore whether there's any argument that could work.

Argument 1: Documentary Use Is Commercial, Not Journalistic

One possible distinction: news/journalistic use vs. commercial use.

When ESPN shows highlights on SportsCenter, that's arguably journalistic—reporting on the game. Courts have held that journalistic use of copyrighted material (including footage of people) is protected and doesn't require consent.

But when NFL Films licenses the Immaculate Reception to a beer commercial, or when a streaming platform pays to air a documentary about Tom Brady's career, that's commercial use—not journalism.

Could players argue that their publicity rights survive copyright preemption in commercial contexts (ads, for-profit documentaries) even if they're preempted in journalistic contexts (news highlights)?

Maybe. But this has never been tested. And Dryer v. NFL rejected a similar argument. The 8th Circuit ruled that NFL Films documentaries are "expressive works" protected by copyright, not "commercial speech" subject to publicity rights. The fact that the NFL profits from them doesn't change their legal status.

So this argument probably fails.

Argument 2: Video Game Licensing Proves Publicity Rights Have Value

Another approach: use the Madden deal as evidence that players' likenesses have independent commercial value separate from the copyrighted broadcasts.

The argument:

• EA pays $228 million/year for the right to use player likenesses in a video game.
• If a digital likeness is worth that much, a real likeness in actual game footage is worth at least as much—probably more.
• The NFL earns billions from footage licensing (as we estimated in Part 5). A significant portion of that value comes from the players' identities, not just the league's copyright in the broadcast.
• Players should be entitled to compensation for the value their likenesses add to the footage, separate from the NFL's copyright ownership.

This is a fairness argument, not a legal one. Courts don't typically override copyright law because the outcome seems unfair. But it could be persuasive in contract negotiations.

The NFLPA could argue to the NFL: "You accept that players' likenesses have value—you allow us to license them for Madden. Why shouldn't we get a share of footage licensing revenue, which also derives value from our likenesses?"

The NFL's response: "Footage licensing is part of media rights, which is already shared with players via the CBA. You get 48.5% of all revenue, including media. We're not paying you twice."

This is a negotiating position, not a legal requirement. But it's the argument the NFLPA would need to make to expand the Madden model to footage.

Argument 3: Exclude Archival Footage from Copyright Preemption

The most aggressive legal argument: ask Congress to amend the Copyright Act to exclude archival sports footage from copyright preemption.

Currently, Section 301(a) of the Copyright Act preempts state publicity rights when the use involves a work that falls "within the subject matter of copyright." Sports broadcasts fall within that subject matter, so publicity rights are preempted.

Congress could amend Section 301 to create an exception:

"Notwithstanding subsection (a), the use of an individual's name, image, or likeness in audiovisual works depicting live sporting events shall not preempt state-law publicity rights when such works are licensed for commercial purposes more than [1 year / 5 years / 10 years] after the original broadcast."

This would mean:

• Live broadcasts and immediate highlights = still covered by copyright preemption (NFL owns footage, players have no claim)
• Archival footage licensed years later for commercials, documentaries, or other commercial purposes = publicity rights survive (players can demand compensation)

This would essentially create the Madden model for old footage: the NFL still owns the copyright, but if they want to license Franco Harris's image in a 50-year-old play for commercial use, they need his estate's permission and have to pay.

Why this won't happen:

• Congress has no incentive to act (no political pressure, strong industry opposition)
• The NFL and networks would lobby aggressively against it
• It would complicate licensing and reduce the value of sports archives
• The NFLPA has never pushed for it

So it's a theoretical solution with zero chance of becoming law.

COULD THE MADDEN MODEL EXPAND TO FOOTAGE?

ARGUMENT 1: COMMERCIAL VS. JOURNALISTIC USE
• Highlights on SportsCenter = journalistic (protected, no payment required)
• Footage in beer commercial or for-profit documentary = commercial
• Could publicity rights survive preemption in commercial contexts?
• Problem: Dryer v. NFL rejected this (docs are "expressive works," not "commercial speech")
• Likelihood of success: Very low

ARGUMENT 2: VIDEO GAMES PROVE LIKENESSES HAVE VALUE
• EA pays $228M/year for digital likenesses in Madden
• Real likenesses in footage worth at least as much
• NFL earns billions from footage, much of that value = players' identities
• Players should get share of footage revenue like they get share of Madden revenue
• Problem: This is fairness argument, not legal requirement
• Could work in CBA negotiations but not in court
• Likelihood of success: Depends on NFLPA leverage (currently low)

ARGUMENT 3: AMEND COPYRIGHT ACT TO EXCLUDE ARCHIVAL FOOTAGE
• Congress amends § 301(a) to create exception for old sports footage
• Live broadcasts + immediate highlights = still preempted (NFL owns, players get $0)
• Archival footage licensed years later for commercial use = publicity rights survive (players get paid)
• Example: NFL can show 2024 game highlights without player permission, but if they license
1972 Immaculate Reception for beer ad in 2027, they need Franco Harris estate's consent + payment
• Problem: Congress won't act (no political will, industry opposition, NFLPA not pushing)
• Likelihood of success: 0%

CONCLUSION:
Madden model works because video games aren't copyrighted broadcasts. Real footage is
copyrighted, so publicity rights are preempted. Expanding the model would require either
(a) NFL voluntarily agreeing in CBA (unlikely without massive leverage), or (b) Congress
changing copyright law (not happening). So players get paid for Madden, get $0 for footage.

The NCAA's Shift: What It Reveals

There's one more piece of evidence that the current system is arbitrary and changeable: the NCAA now pays college athletes for video game use.

After the O'Bannon case, the NCAA initially stopped allowing EA to make college sports games. But in 2021, the NCAA changed its rules to allow athletes to profit from their name, image, and likeness (NIL).

When EA relaunched College Football 25 in 2024, it negotiated direct payments to college athletes for use of their likenesses in the game. Athletes can opt in (and get paid) or opt out (and not appear in the game).

Reported payments: $600 - $1,200 per player per year, plus potential bonuses based on the game's success.

This proves a few things:

1. Paying players for likeness use doesn't destroy the business model. EA is still making college football games. The games are still profitable. Paying players didn't kill the product.

2. "Amateurism" was never a real barrier—it was a choice. The NCAA claimed for decades that paying athletes would violate amateurism and ruin college sports. Then they changed the rule and nothing collapsed. It was always about control, not principle.

3. If college athletes can get paid for video game likenesses, why can't they (or pro athletes) get paid for footage? The legal distinction (video games vs. broadcasts) is real, but the underlying fairness question remains: if someone is profiting from your image, shouldn't you get a share?

The NCAA's shift proves that payment structures can change when there's pressure. The question is whether NFL players will ever generate enough pressure to force a similar change.

Why the Loophole Matters

The video game loophole reveals something important: the system isn't immutable.

Players get paid for Madden because:

• The O'Bannon case established that video game use of likenesses requires compensation
• The NFLPA organized and negotiated a group licensing deal
• EA agreed to pay rather than fight

None of that was inevitable. It happened because players (starting with Ed O'Bannon) sued, won, and set a precedent.

If players could do the same for footage—if they could find a legal theory that survives copyright preemption, or if they could negotiate footage residuals in the CBA—they'd get paid.

But so far, they haven't. The Madden loophole exists. The footage loophole doesn't. And the gap between them is worth billions.

In Part 7, we'll look at how other countries handle sports IP. Do athletes in Europe, Asia, or South America have better protections than American athletes? Is there a model we could adopt? Or is the extraction universal?

HOW WE BUILT THIS (HUMAN/AI COLLABORATION)

RESEARCH APPROACH:
Randy directed focus: Why does Madden pay players but highlights don't? Claude researched EA-NFLPA licensing deal (2020 agreement, $1.6B over 7 years), group licensing structure and payout formulas, Ed O'Bannon v. NCAA case (2009-2014, legal reasoning and settlement), publicity rights vs. copyright preemption distinction (Dryer v. NFL comparison), NCAA NIL rule changes (2021-present), and College Football 25 player payments (2024). All legal analysis sourced to case law and Copyright Act provisions.

FINDINGS:
• EA pays NFLPA $228M/year for Madden player likenesses (publicity rights apply in video games)
• Active players get $10K-$30K/year, retired players get $1K-$5K/year from Madden deal
• Real game footage = copyrighted broadcasts → publicity rights preempted (Dryer v. NFL)
• Same player, same likeness: digital = paid, real = $0 (absurd but legally sound)
• Ed O'Bannon case (2014) established video game use requires compensation → forced EA to pay
• Potential expansions to footage (commercial use exception, CBA negotiation, Congressional amendment) all unlikely
• NCAA now pays college athletes for video game use ($600-$1,200/year) after NIL rule change
• Proves payment doesn't destroy business model; "amateurism" was choice, not necessity

WHAT THIS MEANS:
The video game loophole proves the system can change when there's legal precedent and leverage. O'Bannon sued, won, created precedent. NFLPA negotiated group licensing. EA pays. Players get checks. But that model doesn't extend to footage because copyright preempts publicity rights in broadcasts. The legal distinction is real but arbitrary from fairness perspective. If players could find a legal theory that survives preemption (or negotiate footage residuals in CBA), they'd get paid. But they haven't. So Madden pays billions, highlights pay zero.

NEXT IN SERIES:
Part 7 examines international comparisons: Do athletes in Europe, Asia, South America have better IP protections than American athletes? Is there a model the U.S. could adopt? Or is extraction universal across all sports globally?

Sources: EA-NFLPA licensing agreement (2020, public reporting); NFLPA group licensing payout structure (union statements, player reports); Ed O'Bannon v. NCAA, 7 F.Supp.3d 955 (N.D. Cal. 2014); O'Bannon settlement ($60M, public filings); NCAA NIL rule changes (2021, NCAA policy updates); College Football 25 player payments (public reporting, EA statements); 17 U.S.C. § 301(a) (copyright preemption); Dryer v. NFL, 814 F.3d 938 (8th Cir. 2016). Full citations available on request.

Thank you for reading.