Looks like the word leaked out a few hours early. Reuters is reporting that the National Basketball Association signed long-term game licensing deals with not one, but five game publishers. Electronic Arts, Take-Two Interactive, Midway, Sony and Atari all get a piece of the action. The deal, which includes five and six year contracts, is said to be worth more than $400 million.

The NBA declined to comment further Monday, but said that they decided to go with an open deal instead of an exclusive deal because they think competition enhances quality. NBA Senior VP Sal LaRocca got straight to the point:

Its been our experience that relative competition among the (publishers) has inspired a tremendous amount of creativity. We felt that having a real diverse offering of products that runs the gamut in terms of demographics ... that we would maintain a greater share of mind day in and day out.

Under the deal, EA and Take-Two get to make games every year for multiple platforms while Sony has the right to create PS2 and PSP games. This means Xbox is going to have to be third party only, it looks like.

The deal also allows EA and Midway to take turns making their respective arcade basketball games and that Atari get to tap the much ignored kids market with its Backyard Basketball franchise.

Perhaps most interesting is the fact that all of the deals give the NBA the right to sell in-game advertising, inserting virtual signage in games the way they do during telecasts.

In the online games, we can insert virtual signage in the same way we do during the telecasts. As part of the reality we're going to be selling advertising in the same way we do in our arenas.

Yay, just what we need more ads in games.

I still plan on attending the conference call this afternoon, so stay tuned for more updates.

NBA Signs Video Game Licenses with Five Publishers [Reuters]

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