eSports Law 101: Contract Advantages and Legal Agreements

esports contracts lawyer

State of the eSports Union: The Economic Forecast Is Exceptionally Favorable

Interested in eSports? Well then check out these facts and figures:

  1. Last year, every month, more than 90 million gamers logged onto Twitch, a streaming arena where fans can live chat with other spectators while watching eSport matches. (It’s the 21st century equivalent of going to a baseball game, without the stress of traffic and parking.)
  2. Last year, pro-gaming teams generated about $750 million in revenue; North American teams earned $224 million.
  3. Currently, video game publishers and event arenas are making the bulk of the money because many players are chained to unfavorable contracts.
  4. According to industry experts, eSport revenues will reach multi-billion-dollar territory within two years.

So, what does all this mean for pro- and semi-pro players? It’s time to protect your profits and professional freedoms.

How Do Cyber Athletes Earn Money?

No longer reliant on competition purses, so-called “cyber athletes” earn money in a number of ways. In addition to winning prize money, they can:

  1. Generate revenue through game play subscription services, like Twitch.
  2. Make advertising dollars through streaming channels.
  3. Join a professional, salaried team.
  4. Secure corporate sponsorships and endorsements. Currently, mostly publishers and developers establish partnerships. However, as eSports grow, lifestyle companies, in search of unique branding opportunities, are also wooing gamers.
  5. Write and self-publish playbooks and blogs.

eSports Contracts: What Players Should Consider Before Signing

Whether it’s an agreement between companies and players, players and teams — or some other combination — contracts are the heart of professional eSports. Here’s a list of things cyber athletes need to consider before signing on the dotted line.

  1. Sponsorships: The ideal player contract should be hyper-specific with meticulously defined expectations. Looking to work with several sponsors simultaneously? Triple check the fine print for exclusivity clauses.
  2. Advertising: Agreements should specify advertising parameters, for both players and sponsors. Do you want different rules to apply to certain types of advertising opportunities? These types of questions must be considered.
  3. Event Participation: For player and team contracts, it’s wise to include a season schedule that lists event participation expectations and related earnings percentages.
  4. Duration: Team contracts should stipulate start and end dates. Also, most include some sort of contract extension clause.
  5. Agency: Do you want free agency stipulations? Make sure it’s in your contract.
  6. Employment Laws: U.S.-based pro-gamers must consider employment laws in their respective jurisdictions. If not, you could suffer serious headaches related to health insurance, hours of service, overtime and off-season compensation.
  7. Subscriptions: If a sponsorship or endorsement contract is contingent on subscription statistics or viewer numbers, performance goals and compensation must be detailed in the contract.

ESports Contract Drafting & Negotiations

Aaron Kelly, Daniel Warner and Raees Mohamed help pro-gamers and eSports teams with business and legal needs. A pioneer in gaming and Internet law, we’re an ideal fit for established and emerging cyber athletes and organizations.

Are you ready to speak with an experienced, down-to-earth attorney about a gaming business or pro-gaming contract?  Get in touch today.

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