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Electronic Arts Signs 15-Year Deal With ESPN

Electronic Arts Inc. (ERTS) has signed a 15-year agreement giving it the exclusive right to use the sports channel ESPN brand in its video games.

The leading video game maker's deal with ESPN (search), announced Monday, is designed to bolster its dominance in sports games against competitors Sega Sammy Holdings (search) and Take-Two Interactive (TTWO).

The two firms gained ground on EA last fall by co-publishing a football game that sold at the cut-rate price of $20. Take-Two's three-year agreement with ESPN expires at the end of this year, and EA's deal picks up in 2006.

Financial terms were not disclosed, but sources close to the deal told The Wall Street Journal and New York Times that EA will pay at least $750 million, with some of the money to be used for commercials promoting the games on ESPN channels.

"EA Sports recreates the real life experience fans enjoy while watching or playing their favorite sport," said Electronic Arts Chairman and CEO Larry Probst, "while ESPN programming captures the look, sound and excitement of the sports they follow."

Frank Gibeau, EA's senior vice president of marketing, said the agreement could help the company create new game franchises "like poker and X Games."

Take-Two said in a statement that it would continue to publish sports games.

"The ESPN license was principally a branding tool and as such does not have a meaningful impact on game play," the firm said.

The ESPN deal is similar to one last month in which EA reached an exclusive agreement with the National Football League and its players' association. That deal prevents other publishers from making games that include actual NFL teams and players.