What is in My Esports Contract?
It is a turbulent time in esports with organizations like Counter Logic Gaming being sold off, Team SoloMid scaling down its operations, and Evil Geniuses overhauling the majority of its League Championship Series (LCS) roster. With so much change, it is important that esports players understand their contracts and best protect their interests. The following are items typically found within an esports agreement:
1. The Parties and their Relationship to Eachother
The most basic part of every contract is who are the parties. These are the people or business entities responsible for carrying out the terms of the contract and liable for any breach. Once the parties are correctly established, the contract will state the relationship between the parties such as whether the esports athlete will be an employee of the organization or whether they are being contracted as an independent contractor.
2. Payment Terms (Amount, Bonuses, Schedule)
Every contract is going to have payment terms. This is typically in the form of a salary but can also include things like performance bonuses, revenue sharing from tournament prizes, merchandise sales, and more. This section will also include when the player is due to be paid, such as end of the month, quarterly, etc.
3. Term / Duration
This section details how long the parties wish to work together. In other words, how long do the parties want the contract to last? Despite it’s simplicity, the term of a contract is incredibly important to both parties. A long of short-term contract has both risks and rewards. A long-term contract gives the player extra security, but may lock them in if their performance is more than the monetary value of the agreement. Conversely, the organization benefits because it has the player locked in for less money than the player would get on the open market. Short-term contracts have similar pros and cons. The player has less security in their position, but if they exceed expectations, they can quickly turn that into more money on the open market. Meanwhile for the organization, they run the risk of losing high performing talent, but they also aren’t locked into paying the player for a long time if they perform poorly.
4. Endorsements and Sponsorships
Endorsements and sponsorships are ubiquitous in e-sports. The contract should be explicit about whether each party is allowed to solicit their own branding deals and whether any of the proceeds from those deals must be shared with the other party.
5. Intellectual Property and Moral Rights
This section details the intellectual property rights of the parties. If the player creates other content (e.g., streams, YouTube videos, TikToks, etc.), to what extent do they retain ownership of that content? Additionally, creators may have certain “moral rights” to the content. Moral rights are the rights of creators of copyrighted works that typically include the right to attribution and the right to the integrity of the work. In other words, the creator has the right to (dis)continue their name being attributed to the work and to prevent distortion or modification of the work. The extent to which a creator has moral rights and whether those rights can be waived depends on the jurisdiction. Federally, the United States does not afford moral rights to creators of electronic media.
6. Benching/Trading
Esports are like any other competitive league where a player may be benched or traded. With regards to benching, the agreement should be explicit about whether the player still receives their full compensation even if they are not on the starting roster. The parties may also want to consider a clause whereby if the player remains benched for a certain period of time, they may seek to terminate the agreement and find employment elsewhere.
Additionally, the agreement should note if the player can be traded to another organization, and what restrictions there are if anyway. For example, players should consider requesting that they only be traded to other organizations within a certain region. High profile players may want to protect themselves with no-trade clauses.
7. Non-compete / Cooling Period
An organization may include a non-compete or a “cooling period” clause in the agreement. These require the player not to sign with or represent any other organization for a certain period of time.
8. Termination
This section details how the agreement can be terminated by either party. This can include whether both parties have the right to terminate the agreement or whether only the organization has the right to terminate. It will also include how much notice is required (e.g., thirty days’ notice) and what the player’s compensation will be. This section may list specific acts or omissions that give rise to a right of termination and whether the other party is given time to remedy those before the other party can terminate.
In conclusion, understanding the content of an esports contract is crucial for any professional gamer looking to secure a long-term career in the industry. The contract outlines the terms of payment, duration of the agreement, intellectual property rights, non-compete clauses, and termination provisions, among other things. By familiarizing themselves with these elements and working with an experienced attorney, esports players can better protect their interests, negotiate better deals, and navigate the rapidly evolving landscape of professional gaming. Overall, a well-drafted esports contract can help ensure a mutually beneficial relationship between players and organizations, and create a solid foundation for success in the world of competitive gaming. For help with your esports contract or other legal matters, contact Sprowls Law.