Why Every Esports Player Needs a Contract

15.3. 2020Tomáš Klečka
Pete Lewin is an esports and video games lawyer at Purewal & Partners, a digital entertainment law firm based in London. This article was originally posted on Pete Lewin’s blog. 

Last month professional Dota 2 player Jacky ‘EternaLEnVy’ Mao released a 5600 word blog post about his time in one of Europe’s top esports organisations. This included allegations of unfulfilled salary commitments, unapproved org deductions from prize winnings and significant delays in payments to players. One of the most worrying parts though (if true) of EternaLEnVy’s post—and one which lies at the heart of a number of the claims made—is the apparent absence of contracts between the org and its players.

Here’s my TLDR: player agreements are essential—they should benefit both the orgs and players—they are probably some of the most important documents players will ever sign during their relatively short yet hopefully profitable esport careers—players should always get a contract—they should always read and understand it—they should preferably seek advice from friends, family and/or professionals.

My goal with this piece isn’t to provide a definitive list of things that can or should go into a player agreement, but rather to highlight some of the intricacies around the team-player relations which make contracts so crucial. Thinking about questions like those outlined below—and importantly, setting the answers to these out in writing—is beneficial to both players and orgs and could prevent major headaches in the future. To some these may seem excessive, but when it comes to contracts, the devil really is in the detail.

Money – what, when and how much

Regardless of your love for the game, money matters and the financial provisions will be some of the most important parts of any player agreement. This should include the obvious things like prize money split and perhaps a monthly salary, but there are a number of other less obvious (but equally important) things these sections might cover:

  • Sponsors. Does the player get a cut from team sponsorship deals? Is the player allowed personal sponsors and, if so, does the team get a cut of these? Are there any restrictions placed on personal sponsorships?
  • Merchandise. Does the player get a cut from merchandise sales? Does this differ between physical (e.g. t-shirts) or digital (e.g. skins / in-game items)? What if it’s just one player’s name on that product rather than the whole team?
  • Streaming. What percentage of streaming revenue do players keep? Does this include all types of stream revenue including ad revenue, donations, subs, tips, cheers etc? Who collects this money in the first place from the platform?
  • Bonuses. If the team reaches certain rankings on say HLTV or GosuGamers or appears at certain major events, is there any bonus?
  • Benching. What do players get if they only play for part of an event? Is any prize money distributed according to the number of games the player actually played?
  • Deductions. What expenses can the team deduct from prize monies? What about tax—who deals with this? Are these deductions in addition to the team’s cut of prizes?
  • Expenses. What expenses will players be reimbursed for (travel, accommodation etc)? Do these all have to be agreed with the org in advance or is there a monthly allowance?
  • Timings. When do players get paid? Do players have to submit an invoice? If so, how long after submitting one do players get paid? Do timings differ between prize money and other regular monthly payments?

Obligations – who does what

When it comes to who has to do what and when, it’s in the interest of both the org and the players to set this out in the player agreement. Aside from the obvious obligations like practicing the game and competing in tournaments, a number of other commonly included topics are:

  • Additional Content. Do players have to produce any content for the org website (e.g. guides, articles etc)? If so, how much and how often?
  • Promotional Events. Are players required to attend sponsor / promotional events outside of regular tournaments? Is there a limit of the number of hours these can take up per month?
  • Conduct. Is there a separate code of conduct that sets out additional behavioral rules? Is this actually made available to players somewhere?
  • Equipment. What gear do players get from the orgs (computers, clothing etc)? Who actually owns this and who keeps it once the agreement ends?
  • Housing. Does the org provide any other facilities such as a team house, cleaners, chefs, physio, gym memberships etc?

Termination and Restrictions

Whenever an org signs a new player there’s risk on both sides; the org is relying on the player performing well and the player is relying on the org keeping up their end of the deal. As a result, when, how and on what conditions a player agreement can be ended by either party is absolutely fundamental. Things to consider here include:

  • Duration. How long does the agreement actually last (i.e. what’s the ‘term’)? Does the agreement automatically renew? Does the agreement end in-line with relevant roster locks / transfer windows?
  • Active Roster. Is the player guaranteed a spot on the team’s active roster for the duration of their contract? When can a player be benched? How does this impact any prize money etc?
  • Non-competes. Does the contract contain any non-competes (i.e. restrictions on the player to not play for any other orgs for X months after leaving their current org)?
  • Termination. When and for what reasons can the org terminate the contract? When can the player terminate the contract? Is there a buyout clause? Is there an early termination fee?
  • Disciplinary Processes. Does the agreement or code of conduct detail what happens if the player breaches the agreement? If not, what’s the actual process like if this happens?

Airing issues early

It’s absolutely essential for orgs and players to discuss questions like these before partnering with each other. That way, potential future problems can be identified, discussed and hopefully resolved before they ever actually arise. And if something comes up which the two sides simply cannot agree on for whatever reason, while understandably not a great position to be in for either side, it’s sometimes better to walk away from a deal rather than be locked in a bad one for years.

What can players do?

The importance of player agreements cannot be overstated. These are the documents that will govern the next several years of a player’s life and determine what happens to the thousands, perhaps millions of dollars that the player earns. These are not documents that players should enter into blindly. Here are some tips for players when it comes to contract negotiations:

  • Read it! Please. There’s always time for at least this.
  • Understand it. This one’s a little harder because some contracts are more clearly written than others, but if you’re ever unsure of what something means in the contract, ask the org or a friend or family member to help explain this.
  • Give yourself enough time. This is also a hard one whilst balancing practice schedules, transfer windows and roster locks, but wherever possible ask for contracts early enough to allow for at least some review and negotiation.
  • Separate needs from wants. You’ll never get everything you want in the contract, so it’s important to focus on what’s important to you and being prepared to compromise on other points.
  • Work together. Negotiating a deal is a two-way street—keep things civil, realistic, listen to the org’s side of things and balance that with what you’re asking for.
  • Be prepared to walk away. This isn’t always easy to do, but giving yourself enough options so that you actually have the power to say no is really important.
  • Get help. Whether this is from friends, family, fellow players, agents, advisors or lawyers—don’t be embarrassed to look for external help; any cost associated with this will be marginal in comparison to what you could be putting on the line with a bad contract.