In the quickly evolving world of esports, managing relationships between an esport organisation and esport players can be difficult. The consequences of handling a player dispute badly or getting a player contract wrong can be costly to say the least.
A well-drafted player contract is just one way of protecting an organisation's and a player's future, benefiting both parties by providing clarity and legally enforceable obligations.
Why are player contracts particularly important in esports?
Unlike traditional sports, which operate within a recognised regulatory framework, no such overarching framework governs esports.
In the absence of any industry regulation, having an enforceable player contract is essential to both parties in the event they need to enforce or protect their rights.
Who should player contracts benefit?
Well-drafted player contracts benefit both esport organisations and the players.
They should create a clear understanding of the expectations of both parties. Addressing any potential issues at the outset will go a long way to preventing future difficulties for both parties.
What should a good esport player contract include?
Unfortunately, there are no "standard" esport contractual provisions which can be simply copied and pasted into every player contract for every game to cater for every eventuality.
esport leagues and video game publishers may even impose their own requirements which will need to be incorporated into player contracts. Some leagues restrict the number of foreign players permitted per team in domestic or regional leagues, or impose caps on the length of time a player can be contracted to a single organisation.
We have listed below some of the essential considerations all well-drafted esport player contracts should include.
As in most contracts, the most important terms will be the financial provisions: how much will the player be paid, and on what basis?
The split of prize money, sponsorship agreements, merchandise agreements, social media and streaming revenue, expenses and deductions all need to be clearly defined. If pay is performance-related, this must be clearly detailed.
Player poaching, non-competes and duration
Poaching is a real threat to esport teams. They need to be able to invest in players and plan effectively for the future without the constant fear of suddenly losing a star player to a competitor.
Players can also fall victim to being benched at a critical moment in their career without any recourse or ability to move to another team.
Contracts should therefore clearly state the duration of the contract, with provisions for early termination for both parties. They also should detail the circumstances in which a player can be benched or taken off an active roster, and possibly contain non-compete provisions depending on the circumstances.
Obligations and code of conduct
Player contracts should clearly set out the obligations of both parties, and the code of conduct players are expected to abide by.
For example: are players expected to produce online content for the organisation, such as product reviews, online articles, Twitch streams or YouTube videos? Are players restricted from hosting their own content online on such media channels? Are players tied into exclusive sponsorship agreements with their team? The relevant parties should always be thinking about how the content (and associated IP rights) should be owned and licensed. In particular, the organisation will want to make sure that it retains IP ownership in any content produced by the player and that it has the right to fully commercialise the player's image.
Does the organisation have an existing code of conduct and a disciplinary procedure in place? If so, are players aware of the organisation's code of conduct and the consequences of breaching it?
There are a variety of factors to consider when drafting an effective contract, and it can be useful to seek legal advice to ensure that it benefits all parties.