Take-Two inks deal with baseball players' union

Video game publisher Take-Two Interactive Software Inc. has signed an exclusive seven-year licensing deal with the union representing Major League Baseball players, the union said Monday.

The Major League Baseball Players Association said the deal makes Take-Two the only independent publisher authorized by the union to produce baseball video games for current- and next-generation console and handheld platforms.

But game console manufacturers would still have the right to produce their own baseball titles, the union said, and Take-Two rival Electronic Arts Inc. said it was looking into the possibility of a publisher tying up with a hardware maker on a baseball game.

The Take-Two deal with the players union starts with the 2006 season, although it was not clear whether the game developer had a licensing relationship with Major League Baseball itself for that season and beyond. A spokesman for the league was not immediately available to comment.

Analysts, anticipating the deal in notes Monday morning, said the deal would be "mildly positive" for Take-Two.

"Take-Two appears to us to be confident in its ability to compete in the sports video game arena, and appears intent upon challenging Electronic Arts' leadership in the category," Wedbush Morgan analyst Michael Pachter said in a note.

"On balance, we view this news as mildly positive for Take-Two, as it appears that the company will continue to publish baseball video games using the MLB players and will turn a modest profit should it capture 2 million units of sales in 2006."

Take-Two develops and distributes sports video games in partnership with Sega Sammy Holdings Inc. , and it holds an option to acquire Sega's sports studio Visual Concepts.

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It recently lost its license to the ESPN brand to rival Electronic Arts starting in 2006.

EA also struck an exclusive deal with the National Football League and its players' union recently for pro football video games, cutting off Take-Two's most successful sports franchise after heavy competition between the two.

An EA spokesman said the company was exploring the possibility that an independent publisher (known in the industry as a third-party publisher) could still team up with one of the console makers to produce a baseball title.

"The possibility of a third-party partnering with someone else to make a baseball game is something that I imagine a lot of people are going to be looking into," EA spokesman Jeff Brown said.

While sports video games were the second-largest industry category in 2004, at $1.18 billion in sales, baseball titles were far down the list. Of the top-10 titles in 2004 by units sold, according to the marketing information provider NPD Group, four were sports games — three football and one basketball.