Electronic Arts 2014 Annual Report Download - page 92

Item 1B: Unresolved Staff Comments
None.
Item 2: Properties
We own our 660,000-square-foot Redwood Shores headquarters facilities located in Redwood City, California,
which includes a product development studio and administrative and sales functions. We also own a 418,000-
square-foot product development studio facility in Burnaby, Canada. In addition to the properties we own, we
lease approximately 1.2 million square feet in North America and 0.9 million square feet in Europe and Asia at
various research and development, sales and administration and distribution facilities, including leases for our
development studios in Orlando, Florida and Stockholm, Sweden.
While we continually evaluate our facility requirements, we believe that suitable additional or substitute space
will be available as needed to accommodate our future needs. For information regarding our lease commitments,
see Note 13 of the Notes to Consolidated Financial Statements, included in Item 8 in this report. For information
on long-lived assets by geography, see Note 18 of the Notes to Consolidated Financial Statements, included in
Item 8 in this report.
Item 3: 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 the 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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