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Insights

24 January 2020

Esports player contracts - knowing your worth and 'equalising' the contractual playing field

Esports is booming; there can be no question. The explosive rate at which the industry has grown in recent years has taken the community and the markets by surprise. With competitive games such as League of Legends, Fortnite, Overwatch and Hearthstone drawing in talented young players, an ecosystem has rapidly developed to support and foster this community in the form of teams, tournaments and fans. This has not come without cost however, and as esports continues to surge in popularity, so too do the reasonable expectations of players. As salary, sponsorship and team negotiations enter the forefront of discussions during the ongoing League of Legends pre-season, it feels appropriate to reflect on the functionality of this fledgeling ecosystem. This article focusses specifically on contracts between teams and players.

Developing world

The commercial framework for top-tier esports tournaments has developed rapidly, with franchise leagues and clear contractual frameworks an increasingly common model. However, many aspects of the esports ecosystem, even at the top level, remain developing. One such aspect being the dynamic between teams and players, as recent examples from the League of Legends World Championship demonstrate.

G2 Esports are an extremely successful team and won the League of Legends European Championship (LEC) in 2019. However, in the wake of perhaps the most bitterly disappointing European defeat in League of Legends history at the hands of the Chinese team FPX, G2 fans around the globe are asking themselves one question: now what? G2’s European roster was heralded for greatness and built to dominate following perhaps the most ambitious and daring roster swaps in LoL history. Ultimately they fell short.

Prior to 2019, top players Wunder, Jankos, Caps, Perkz and Mikyx reportedly locked in their contracts with G2 until 15th November 2021; they surely believed that they had a real shot at becoming the undisputed World Champions of League of Legends. After such a fantastic and expectation-defying performance in the LEC and at the Mid-Season Invitational, the world certainly saw them as real contenders. Perhaps they saw this as an opportunity to protect their unique and synergistic team environment in the hopes of challenging SKT as the most successful team of all time. Maybe G2’s owner Ocelote saw this as an opportunity to cement G2’s brand by locking in 5 of the most talented and creative players for the foreseeable future.

However, the manner in which G2 were defeated uncovered weaknesses that G2 management may want to resolve during the off-season. Whilst the accomplishments of G2 should be recognised as the fantastic victories that they are, it may be prudent to pause and reflect on the context of contracting esports players for both players and team.

Burn out

Things can change quickly in esports – players can and do burn out in far shorter periods than 2 years. Some would describe it as a gamble to commit to long player contracts which assume roster longevity. The shelf life of the average professional esports player is fleeting by any professional standard, which creates difficulties for both players in extracting the maximum benefit from what may be a very short career and teams in committing to players and building successful teams. However, teams also want to protect their key assets if players to continue to perform and thus contracting players for 2-3 years may be seen as an acceptable risk.

This can be contrasted with some traditional sports where player contracts of 4-5 years for top talent are common offering security of income for the players and balancing risks and rewards for the teams.

Of course, G2 are by no means down for the count. You would be pushed to find a more resilient group of players and some think that this roster has a tremendous amount of potential to reach greater heights. This is not necessarily the case for other players and teams and disputes in the industry are common.

Contracting pain 

Having clear contracts in place is a strong benefit to both teams and players, but this remains an area where many esports organisations have much room for improvement.

Many teams have suffered players walking away during contracted periods and found that the contracts they had been signed up to are far from watertight. Such issues can be further execrated by the absence of player unions or associations in many esports providing advice to players and a mediation framework when things go wrong.

Further, the recent contractual controversy between team Griffin and Kanavi (in which a key member of Griffin’s staff was found to have pressured a player to sign agreements and bypassed legal representatives in relation to the transfer of a player to another team) emphasises that, even where contracts exist, there may be other practices causing concern.

These cases emphasise the importance of both sides obtaining legal advice prior to signing contracts, meaning teams and players stand a better chance of protecting their interests and clarifying their intentions from the outset.

Contracting gain 

The esports industry is growing at a staggering rate and before long the scene will no longer be in its adolescence. The wider community also has a role to play in ensuring that this rapid growth does not come at the cost of integrity in the industry, and players and teams should consider carefully terms being negotiated and the potential impact going forward.

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