Video game giant Electronic Arts (Nasdaq: ERTS) just got some professional help. EA Sports is teaming up with sports agency IMG to take the "brand deeper into the fabric of sports and lifestyle entertainment."
EA's license portfolio already includes exclusive rights to develop games based on NFL and NCAA football, as well as NASCAR racing. You could call this a BRIC (Brazil, Russia, India, China) play by EA, because IMG's core competence lies far away from Yankee Stadium.
IMG is big in "world sports," where it represents and conceivably could come up with exclusive rights for the English Football Association, international rugby or cricket tournaments, and a staggering number of the top tournaments and stars in golf or tennis. It doesn't own the rights for the Olympic Games, but does have a long history of wrangling media contracts for Olympian athletes and sports.
You already know how important the international market has become for American companies. Everybody from IBM (NYSE: IBM) and Coca-Cola (NYSE: KO) to Wal-Mart (NYSE: WMT) and eBay (Nasdaq: EBAY) pulls in significant portions of their sales from abroad, and their fortunes wax and wane more with the global economy than the domestic one.
Electronic Arts is smart to broaden its exposure to places like Eastern Europe, India, and the Pacific Rim, where IMG's sports have a massive following and expanding middle-class wealth. Activision (Nasdaq: ATVI) is merging with Vivendi's game development division for a similar reason: European and Far Eastern distribution.
It will take some time to milk benefits out of the EA-IMG partnership, because there are direct licensing deals to negotiate and some game code to be written. These things take time. But a patient investor should reap real rewards from this partnership in a year or two.
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