eSports Law 101: Contract Advantages and Legal Agreements
State of the eSports Union: The Economic Forecast Is Exceptionally Favorable
Interested in eSports? Well then check out these facts and figures:
- 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.)
- Last year, pro-gaming teams generated about $750 million in revenue; North American teams earned $224 million.
- Currently, video game publishers and event arenas are making the bulk of the money because many players are chained to unfavorable contracts.
- 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:
- Generate revenue through game play subscription services, like Twitch.
- Make advertising dollars through streaming channels.
- Join a professional, salaried team.
- 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.
- 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.
- 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.
- 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.
- Event Participation: For player and team contracts, it’s wise to include a season schedule that lists event participation expectations and related earnings percentages.
- Duration: Team contracts should stipulate start and end dates. Also, most include some sort of contract extension clause.
- Agency: Do you want free agency stipulations? Make sure it’s in your contract.
- 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.
- 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.