Electronic Arts 2014 Annual Report Download - page 165

Annual Report
The unrecognized amounts represented in the table above reflect our minimum cash obligations for the respective
fiscal years, but do not necessarily represent the periods in which they will be recognized and expensed in our
Consolidated Financial Statements. In addition, the amounts in the table above are presented based on the dates
the amounts are contractually due as of March 31, 2014; however, certain payment obligations may be
accelerated depending on the performance of our operating results.
In addition to what is included in the table above, as of March 31, 2014, we had a liability for unrecognized tax
benefits and an accrual for the payment of related interest totaling $188 million, of which we are unable to make
a reasonably reliable estimate of when cash settlement with a taxing authority will occur.
Subsequent to March 31, 2014, we entered into or amended various licensor and lease agreements with third
parties, which contingently commits us to pay an additional approximately $110 million at various dates through
fiscal year 2025.
Also, in addition to what is included in the table above as of March 31, 2014, in connection with our KlickNation
and Chillingo acquisitions, we may be required to pay an additional $10 million of cash consideration based upon
the achievement of certain performance milestones through March 31, 2015. As of March 31, 2014, we have
accrued $4 million of contingent consideration on our Consolidated Balance Sheet representing the estimated fair
value of the contingent consideration.
Legal Proceedings
We are a defendant in several actions that allege we misappropriated the likenesses of various college athletes in
certain of our college-themed sports games.
• We are defending a putative class action lawsuit brought by Ryan Hart, a former college football
player, in the United States District Court for the District of New Jersey in June 2009, which alleges
that we misappropriated his likeness in our college-themed football game. The complaint seeks actual
damages and other unspecified damages, which have not been quantified. In September 2011, the
district court granted our motion to dismiss the complaint. On May 21, 2013, the Third Circuit Court of
Appeal reversed the district court’s decision and remanded the case back to the district court.
• The In re NCAA Student-Athlete Name & Likeness Licensing litigation pending in the United States
District Court for the Northern District of California involves two groups of common claims brought
by several different former collegiate student-athletes in 2009. These various actions were consolidated
into one action in February 2010. The first group of claims is a class action against us, the NCAA and
the Collegiate Licensing Company (CLC) alleging that our college-themed video games
misappropriated the likenesses of collegiate student-athletes without their authorization. This group of
claims seeks actual damages, statutory damages and other unspecified damages, which have not been
quantified. On July 31, 2013, the Ninth Circuit Court of Appeals affirmed the trial court’s denial of our
motion to strike the complaint. The second group of claims is a federal antitrust class action against us,
the NCAA and the CLC that challenges NCAA/CLC licensing practices and the NCAA By-Laws and
regulations. This group of claims seeks unspecified damages, which have not been quantified.
In September 2013, we reached an agreement to settle all actions brought by college athletes. We and counsel for
plaintiffs are in the process of preparing a written settlement agreement and other documents to present to the
respective courts for approval of the settlement. We recognized a $30 million accrual during the second quarter of
fiscal 2014 associated with the anticipated settlement. On November 4, 2013, the NCAA filed a complaint against
the Company and CLC in the Superior Court of Fulton County, Georgia. The complaint seeks unspecified damages
and alleges that the Company is contractually obligated to defend and indemnify the NCAA against claims asserted
in In re NCAA Student-Athlete Name & Likeness Licensing concerning the alleged misappropriation of student-
athletes’ publicity rights in EA’s collegiate video games. We have not yet responded to the NCAA’s complaint.
On December 17, 2013, a purported shareholder class action lawsuit was filed in the United States District Court
for the Northern District of California against the Company and certain of its officers by an individual purporting
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