The ESI Podcast on image rights - the player vs the team?

Posted on 09 May 2019

The ESI Podcast on image rights

The ESI Podcast on image rights - the player vs the team?

 

Voiceover
Welcome to the Esports Insider broadcast in partnership with Mishcon de Reya. 

[Music]

Ollie
Welcome to the Esports Insider broadcast in partnership with Mishcon de Reya. I’m your host Ollie and I’m joined by three wonderful guests yet again. To my right I have the wonderful Anna.

 

Anna
Hello.

 

Ollie
What do you do?

 

Anna
Nice to see you, what do I do? So hi I’m Anna, I’m a Managing Director and General Counsellor for Team Rogue which participates in the um Ali C in the League of Legends European Championship and before that I have actually advised um players as well as teams as well as you know sponsors or football clubs in the Esports transactions as a lawyer for a couple of years before joining Rogue in November 2018.

 

Ollie
Nice. Then we have Seb.

 

Seb
Yes, Seb Cole Michael Brown. I am one of the Founders and Commercial Director of Hashtag United which is a real life football team. We now play in the non-league pyramid and we create a lot of content about our escapades behind the scenes, we have done that for the last three years. And also we have an Esports team which is obviously the point of this conversation.  Yeah so we have four FIFA professionals; so we have a roster very much focused around the world we operate in which is football and that’s the same within our Esports team as well although we do have additional rosters when we play in the G Finity Elite Series which is currently a Street Fighter and Rocky league as well.

 

Ollie 
Awesome. What he doesn’t tell you is he did score a goal at Wembley.

 

Seb  
Yeah it’s true, it’s true. It’s my pin tweet.

[Laughter]

Ollie
No I mean that’s what I do. And last but very not least we have Tom.
 

Tom   
Hiya, yeah I haven’t scored a goal at Wembley unfortunately. 

 

[Laughter]
 

Seb
Yet.

 

Ollie
He’s got a dodgy leg though, you can’t see it under the table but he is bionic man in his right leg so.

 

Tom   
My secretary keeps laughing at me and she keeps on saying, she keeps on calling me the bionic man which is some 80s reference apparently. She finds it hilarious. Um so yeah I’m a sport and commercial lawyer, so I basically sit in the inter section between sport and commercial law. Um I have worked with sort of football clubs, um football players, boxers, athletes, governing bodies um and then increasingly more and more on Esport side of things helping clubs who want to become Esports ready or get involved in Esports and helping to advise on that sort of thing and um also on the sort of sponsorship side as well.

 

Ollie
Awesome. I guess that is kind of where I wanted to start and kind of a pretty interesting area as Esports continues to grow as an industry is kind of when you look at players individually and you look at teams. So teams we are seeing all of this big sponsorship growth, we are seeing it in kind of er leagues as well so the LEC they are getting a lot of non-endemic interest but players you don't have so much the individual Adidas sponsorships that Harry Kane might have or this in the football space. So is that a space that we are going to see develop um and kind of why do you think it’s not as developed in the Esports scene at the moment.

 

Tom
Um, yeah, I think that it’s just a matter of time to be honest.  I don't think – I mean if you look at how the growth of Esports its only going to be the next couple of years where you will see players really come to the forefront and become almost as footballers have is the true icon so people now aren't really supporting Manchester United they are supporting Paul Pogba and more and more fans are becoming obsessed with the individuals at the club or within a team and um I think it’s only going to be a matter of time before that happens within Esports as well. I think that the likes of, I’m not sure you will see the likes of say Adidas or Nike moving in to sponsor individual players purely because the teams are already going to be signing up in merchandise deals with individual companies. It’s going – there will be some difficulty there sort of trying to bridge the gap between the two um but yeah I think in terms of different sponsorships there is no reason why that should be prevented.

 

Seb
I think that’s the big thing you mention there is that traditionally Esports you are seeing from the waist up so you are talking about in football you’ve got, you may have Lionel Messi playing in a Nike sponsored jersey for Barcelona wearing Adidas boots but then you can’t really have that same cross over when it comes to Esports. And I also feel that certainly from my own perspective within a FIFA Esport you have, it is such a new world that you are finding player and club contracts and also franchise contracts within certain competitions are so young and without putting them down, immature in their development, that you have like a… there hasn’t been situations where there’s been those conflicts yet or there hasn’t been enough um commercial sort of er er weight behind driving it either way but I absolutely agree it is just a matter of time before that. We’ve had some of our players have had external individual partnerships with individual beverage companies for example um and there has been a few clashes over the years where there has been er like one of their partners wants them to wear their hat while they are taking part for us and then you know if we don’t have a hat and then that potentially clashes one of our partners, these are all nuances that sort of all being ironed out as you go but certainly from a FIFA Esports perspective I think the industry has got a lot of growing up to do in that world and that will have to happen as you know, the stakes get higher I guess.

 

Anna
Of course I mean one thing when you look at the industry structure in general what you have to keep in mind is that um Esports currently is figuring out which rights belong to whom. So the inventory of a league and then the inventory of the teams participating and what’s left for the players and I think what’s actually comparable to football, you mentioned having the shoes and the shirt and different brands there so equipment is a big point of contention sometimes with players too. So usually when they are represented by lawyers or agents you might have cough-outs in the contracts just because they believe certain mic or keyboards that’s the only thing they can play their best with whether this is then having an individual sponsorship or it shows you know white labelling actually on the product when they are participating in the league and what’s on display. When it comes to the players themselves and their individual sponsorship I think it was announced that Uzi actually got an individual sponsorship. So I also believe we were on the verge there but it’s also, let’s be honest, player brands usually are not big enough yet to draw the respective sponsorships. So we talked about this briefly earlier, Dr Lupo in Rogue, yes he’s a huge influence on twitch so and he has now an individual state farm sponsorship but the angle and the engagement there is not comparable to an individual player in the LEC or somewhere else.

 

Ollie 
Yeah I get that. That’s kind of an interesting point is the kind of cross over between influencers and Esports right is that we are seeing increasingly now you only have to look at Ninja where some people conflate him with an Esport star, obviously he has competitive history but some people would say he’s not strictly an Esports player now but obviously one of the biggest influencers in the world and we see a lot of players that are very, very good and especially in the Battle Royale Jungle, where the Esport scene hasn’t quite grown up yet. We have a lot of these players/influencers/- um do you think there's, there's like an issue with Esports and influencers becoming conflated or is it just an opportunity for the industry to continue growing and equally do you think that the contracts for these, obviously you have people under a brand as an influencer rather than a pro player, are they being approached different contractually or is it the same?

 

Tom
I think that’s a sort of society wide phenomenon now where, particularly with players, those who are most popular for streaming for example won’t necessarily be the best players they can be the most entertaining and I think that players will slowly but surely realise that their overall commercial value is far greater than their worth on the pitch. I mean you guys will have found this, your best player might not necessarily be the one who is the most popular or the one who gets most likes or follows and if you look at someone like, to get back to football, look at someone like David Beckham, towards the end of his career you know he wasn't, he was nowhere near the top player…

 

Ollie
Woah, woah, woah

 

Tom
…but his commercial value as soon as he was transferred to a club led to a huge increase in sales. So I kind of think it doesn’t really matter anymore.

 

Seb   
Yeah I agree with that definitely.

 

Tom
We are trying to create an entertainment product here and we want to entertain people and you can do that by either having someone who is incredibly talented but might not necessarily be the best brand or you can have someone who is highly influential and people you know what to hear what he or she has to say but their playing ability might be slightly lower.

 

Seb  
I think the biggest thing there is just the word influencer. Like it’s just em hate it, I absolutely hate it you know. Technically being a guy that as well as my work with Hashtag and the business side of that I have my own YouTube channel on golf, technically I’m an influencer right but if you look at someone like a David Beckham or a Ninja so they are just basically someone of public interests right. Whatever they do they have followers so does it then therefore mean anyone who that has a social media account of a certain size is an influencer and therefore David Beckham is an influencer right. So that’s what he is, he’s a celebrity so I think as the generations continue to adapt and evolve it will just become a new version of celebrity. There is a massive distinction between someone that creates content online.  Um basically all the people that create content on line you don't, people are called influencers or YouTubers or whatever, you don't call people interneters you know, there are very different kinds of people that create content on YouTube. There are people that will make really basic standard content from a bedroom on an Iphone and then there are people that have million pound budgets to create weekly shows on YouTube. They are all YouTubers but what a difference those two things are. So I think um Ninja is a personality and he happens to make content that entertains as well as you know like I said has a competitive background. What we find the same at Hashtag United you know for us coming into it from a content perspective er is probably equally as important to us as to the individuals and their personalities and what content we can make with them as much as it for them to be competitive in events you know. Definitely want people to be competitive in events don't get me wrong but it’s not just about that, if it were we would have made very different recruitment decisions in the past just to go and get people who have got the best chance of winning. Instead we have looked to try and give us a good chance of competing but also what, what- who are in line with our core values and our brand beliefs and at the end of the day we are telling an overall story I think. The sort of cheesy thing we like to say is we can be all things to all football fans is that we have got a football team you can actually support that are now playing non-league football but also you have got the entire generation that don't just like playing football they want to play, they want to watch in gaming and compete in gaming as well. It’s a very different landscape so to try and broach that it’s one of the reasons we haven’t branched out as of yet massively into other titles because we’re a football club so therefore our Esports team is a football Esports team and if it were just a commercial decision we absolutely would probably have started a Fortnite team or whatever you know but we haven’t done that as of yet for a particular reason.

 

Anna
Well I believe from a commercial point of view it doesn’t matter whether you know, you name them influencers or whether they come from gaming or Esports, it’s more about what they actually display. They display this kind of unique personality entertainer within a societal context representing a societal phenomenon which is simply gaming and striving to be good at what you are doing whether this is me being at home, an individual loving to play League of Legends or whether this is one of our players performing at their best in the league and everybody aspiring to be them basically. Obviously that’s for me not an option anymore being rather too old for that, but generally I believe it doesn’t matter that the main point is that it’s important that all those people support the positive message about gaming is a part of society now, it actually has a lot of positive effects and um we love to be a part of this.

 

Ollie  
Yeah, no I am completely on the same page and I agree there. And kind of looking back over the last couple of years is, why do you… I mean we have loads of issues around kind of player contracts, some that you probably wouldn’t see really in the traditional sports world where players are rushing into contracts, you have a lot of rules that are being set up by I would say people maybe with good intentions or some with completely malicious intentions but people that don't really understand business, we are kind of seeing that fade a little bit.  Do you still see that as a danger in the Esport space and kind of what… how is that going, is that just going to iron out over time?

 

Tom
I think, just to give Anna…  I think the work that ESIC are doing is great for the industry and I think it’s going to allow the industry to build around a regulatory framework that leads to, ultimately leads to improvements behind the way players are treated. I think players, you know the top players are earning huge six figure sums if not more in salaries and prize money but let’s also not forget these people are relatively vulnerable. You know if you are twenty one and you have to move away from your family, you are going to live in you know, a foreign country and you are going to be streaming for eight hours a day or practicing and then competing in tournaments, you are under a huge amount of pressure there and I think that this needs to be reflected in the contracts. I think if you look at stuff like LEC or any of the other sort of franchise leagues there has been an improvement because there is stuff like minimum salary requirements, or just general requirements in terms of how you treat players and fairness provisions and I think that can only be a good thing for the industry, particularly one that involves so many er young people.

 

Anna  
Yeah maybe also when we look at the industry as a whole I think on the very top level, the pro level, you probably don't face that many problems any more just because the governance is there whether it’s from the league organisers, whether it’s from the publishers, there is also a commercial interest there to have a well governed space. I think that the bigger challenge actually lies in the semi-professional/amateur area where players are even younger, they might even be only twelve, thirteen and I think governance in that space is a very interesting topic.  Many countries in Europe currently come up with their own Esports Associations who actually you know start governing the space, build a network with local Esports clubs and I believe we we…also we as pro Esports clubs should support this scene, this official association scene that contributes positively to the governance.

 

Ollie
Yeah I agree and probably the publishers need to help a little bit more in all levels. Um kind of interestingly, obviously like we sort of said we are still fairly infant in kind of when you, in the commercial landscape when we compare it to the traditional sports world where things were a lot more advanced and I guess if you look at team value, I don’t know it was a Forbes report that said Cloud Nine could become the first billion dollar Esports club but when you actually look they don't even have a stadium, they don't really have much capital and I don't know where the numbers were plucked from but they seemed a little wild on the old valuation. Um when you look at Man United where the value you can see it, kind of what key learnings can Esports take and apply from sports and um how do you see the value in terms of kind of Esports teams from a team side and from a players side being grown commercially?

 

Seb  
I mean I think the other guys will probably be able to speak a lot more than I would on that but my own viewpoint on it is I think that there has obviously been a big move towards venture capitalist investment in Esports teams and therefore that has led to certain multipliers being put in place for how they value the clubs. I think a lot of those clubs are losing money you know. They have got huge revenues but they have a negative balance sheet so certainly the biggest ones because they are spending so heavily. You know it’s a land grab right now. So that’s the model, that’s not a negative thing um but I think what will have to happen is that those businesses will mature as the industry continues to and then you will probably find a rationalisation of some of these valuations and how the Esports teams are valued being more linked to you know profitability over a long period as opposed to ‘oh my God everyone is investing in Esports let’s go crazy’ you know, who’s making the most noise, who’s got the most followers or what have you.

 

Ollie
Yeah when talking about Hashtag do you, when you talk about sponsorships and you talk about commercial opportunities obviously you have your sports side which you then create amazing content around it and when you go to approach it more commercially is it a very different package, the Esports side to what you have built on the traditional sports side or are you kind of now seeing kind of a more all-round interest?

 

Seb  
I think it’s both to be honest. So we fundamentally will on the football side apply the model is that we are a team, we are the broadcaster on our own channel you know we broadcast our own rights and we have you know a very, very, very healthy viewership so we are able to work with some big brand partners on the football side like Adidas and Football Manager.  On the Esports side our main partner is Scuff Gaming so that is a totally different partnership. I think we obviously make a lot of content behind the scenes about the Esports events that our guys are qualifying for and competing for but then they have their own independent broadcaster like you know all the other Esports teams do. So that’s the real difference between Esports and football for us is that in football we are the unique operation that we are the football team and the broadcaster and then in Esports I think what we are trying to learn more of is how we can um how we can do a better job for our partners, or how we can do a better job for ourselves with our partners on leveraging the value we have by appearing in other people’s content. That’s a different model for us and I think being so heavily involved in the FIFA Esports side that doesn’t have such a well-trodden path with events yet. The events are changing every year; the events are growing all the time so it’s a great opportunity but I don't think sponsors have properly understood how much value there can be or maybe how under-priced some of the FIFA sponsorships are right now um because of that, because it’s such a rapidly changing sport I think.

 

Anna
Ollie, I believe your question brings up you know a so important aspect which is basically what are the hard assets of Esports teams? So there are you see some of these teams are focussing only on competitive success; I believe that might be a dangerous road to go down just because as you mentioned traditionally Esports teams don't have a stadium, they don’t have other revenue streams apart from participating in competitions and making that their inventory there to money. So I believe it’s actually, you can see this across a couple of teams that a broader approach is probably more successful.  Even we at Rogue we have education programmes and a programme that is called Junior Rogue, you know, involving youth development, community outreach and on top of that we work with celebrities.  Looking at other teams you can also see that they just branch out and um see what kind of services can they provide on top of having Esports teams and that’s quite important I believe to to have more than one pillar your success is depending on.

 

Tom  
I agree and I think in terms of you know, talking about valuations and whether or not you have to have hard assets to be the staple to your valuation, if you look at all of the most successful companies in the world at the moment, say Uber doesn’t own any cars, Airbnb doesn’t own any hotels, Deliveroo doesn’t own any restaurants, um all of these again is part of a general change where the value of ideas and the value of intellectual property is where the real value of a company valuation comes from. So I don't necessarily think it’s, I think there has been some sort of staggering valuations recently you mentioned the Cloud Nine one um but I don't think this is necessarily out of all realms of belief that these teams and entities could reach that type of valuation. I also think if we look at…looking at football, I’m not sure if that’s the best way to try and think ‘oh this is how we should be valuing clubs and this is how we should be running the businesses'. If you look at most football clubs the vast majority of their revenue comes from broadcast deals, those multi-multi-million deals but most clubs operate at a loss, particularly the most successful, Man United, have got incredible amounts of debt yet they also have incredible amounts of revenue so. I was speaking to them the other day talking about G-Finity and saying how supposedly they are in £13 million worth of debt. That’s only a problem if your revenue, revenue model isn’t structured in the right way. Uber have been losing money since it started up but they had set up in a particular way where eventually they will turn the screws and be able to start earning money. Same with Amazon; Amazon has always operated at a loss but what their plan is they have complete market domination and then turn the screw and then your profitability figures rise significantly. So I think it’s kind of a race to the top of the mountain for a lot of teams and those who are able to be most successful within the field and to take that and it is a land grab, if they can take that land first and then say ‘oh well this is ours now’ you can see the valuations coming through.

 

Ollie
Yeah one thing I always find kind of interesting is generally, I mean obviously player contracts terms are disclosed too heavily, I think recently we have seen a couple of kind of like three year deals trying to tie players in a little bit longer, and we kind of now more see players getting benched and then being brought out which is good rather than just you don't really hear anything and a player disappears or whatever.  But the one thing I always see about Esport when you compare it to traditional sports is there is very few times I can really think of in football where a player has been at their prime at the age of twenty six and then the next day, well say this is for example, the next day the FA changes the rules and the game is completely different.  Esports literally a patch can hit and a player, middle aged champion that he was once dominate on can be gone.  Um how do you see Esports and players being protected in that sense and obviously the contract is in place but because professional success and the cycle seems to be like a kind of hyper-accelerated cycle from any sport, um how do you see that kind of changing in the future, do you see players having more longevity in the space or is it always going to be kind of quick fire, quick fire, quick fire?

 

Tom  
As a lawyer you would probably expect this answer but I think that players obtaining legal advice at an early stage is going to be, is going to increase and I would encourage it because when you are negotiating with a team that’s backed by a VC fund they have top lawyers in place that can negotiate their contracts and they are not going to put in place the terms that are favourable to you, the same with your sponsorship deals. People need to be getting advice at an early stage so they can protect their position not only commercially to give, you know rather than being a one year deal it would be three year deal but to have certain, have remuneration structured so that that is guaranteed over a certain period and they are not left out in the lurch but I completely agree, I think Esports is an industry that is completely dominated by the publishers and the publishers can do pretty much whatever they want. If I was really good at FIFA 17; I was awful at FIFA 18. [Laughter] I was honestly I was playing on seasons as division 1, picked up the controller a couple of months later and I was useless I just couldn't play anymore um and you know I can completely see why there is sympathy but I suppose that’s why you know they are paid the top bucks because they have to be adaptable, they have to be able to and people want to see new games or new patches being released and um new versions to keep things interesting I think otherwise titles only have a certain amount of time where they can maintain the focus and attention of people before something else comes along the way and replaces it.

 

Anna
Yeah but I do believe it’s not necessarily right that organisations aim for short contracts. So in the scene on the pro level I think it’s rather driven by the players just because the growth is exponential currently. So you do not know how the market for player salary actually develops.  So you would rather only sign a one year deal and then see for example, if you are this hyped up, up and coming talent. You might be able to make four times what you made in your first year and you value that over stability potentially. From an organisations perspective in our case we have signed most of the players on three year deals which is the maximum you can do because we just believe in sustainable growth.  We want to have a stable roster, we want to develop step-by-step and you cannot do that when you have players only on one year contracts just because the season is quickly over then you have free agency again which is the most stressful time of the year for the lawyers, organisations, everyone always a bit dramatic so usually you want to avoid renewal re-negotiation in this type of frenzy.  So I believe that actually the trend is more towards longer contracts, multi-year contracts.

 

Ollie  
Yeah I guess that is probably kind of the same with football right. That is you don't want to wait until they have only got a year left on the deal because you see kind of the Aaron Ramsey’s of this world and players can just be yoiked from wherever so.

 

Seb
Yeah I think it’s the luck, like you said it’s just a natural evolution of demand and the supply of that talent. You will find that players will look to protect their um own interests more and more if they get better advice as they are coming into the industry and equally you know clubs are going to try and be savvy as well and I do think that is a unique thing to Esports that isn’t really necessarily something you can mitigate it’s the fact that you know they tell us so a superstar today and a nobody tomorrow it is you know one patch away from everybody you know, so that’s par for the course and that the problem that presents is um you can't form real long-term story lines and rivalries and stardom because you know, you may not have a superstar that is at the top of his or her game for long enough to really do that so.  Equally you can say there is going to be lots of different winners you’d hope from time-to-time which everybody likes as well so it’s just unique, unique type of entertainment.

 

Ollie  
Yeah I think we do get, you get some longevity, you get some storylines and you will have like Counterstrike is twenty years long now and you have got some stories of all of Oliveirense has made every major but they are rare and they are few and far between but you never know.  We are only a few years deep so there could be those stories who knows.

 

Tom
You don't see that in other sports, you don’t see the changes in the rules that could.  I mean in football at the moment they are talking about changing the rules regarding how close your defender can stand, how close an attacking player can stand in a wall off during a free kick and saying you have to stand a metre away and that’s about the most significant change you are going to have.

[Laugher]

 

Ollie  
Have you read the new changes on the silhouette of a hand ball?  That’s quite interesting.

 

Tom
Yeah, I mean.

 

Anna  
Yeah.

 

Tom
I mean but even then the changes are so minor they are not going to impact dramatically on your ability to perform to the... unless you are, you know your sole role is to block the view of the goalkeeper in a wall and in which case you probably shouldn’t be in the team in the first.

 

Anna  
However, from a legal perspective I think it might be interesting to just look at the type of contract we are usually looking at. So in the pro team you usually have an employment contract which means you cannot I take it in most European countries just drop players on the spot, there is usually a certain commitment there from both sides so that lies particularly with the organisations and I think this is usually not said out loud but there is a financial risk usually there with the periods of notice you have to give. I mean we are operating in Germany so that is rather strict but yeah so I think, at least at the pro level, there is also a certain level of protection for players.

 

Ollie
Do, do you think we are going to see larger squads as a result? I mean for example you’ve got certain people in the LEC operating with ten player squads which is double the allotted.  Overwatch League has a minimum stipulation on players. I don’t know if the Elite Series has rules like that but obviously...

 

Seb  
There is some stuff like that yeah.

 

Ollie
...do you think in Esports we are going to see having surplus players that get rotated in and out of competition? Do you think you as a team could hedge a risk against patches by having players that are versatile in multiple roles?

 

Seb  
I think the reality is that it’s going to come down to a team’s individual strategies, budgets, resources you know and the individual title they are playing in. It’s all going to be so varied I don't think there will be a one rule fits all um even for a particular title. I think it will be unique. I still feel, certainly in our world which is predominantly FIFA, I still think everyone is still figuring it out to be honest you know and playing around with different things. We are one of the teams that have a larger roster and you know you at recent things like the eClub World Cup you see teams having to merge together just to field a single team in a team format whereas we had surplus. We were loaning our players. We loaned one of our players out to Manchester City because we are one of the teams that have quite a larger roster. Um that fits our strategy because we have a content angle you now and the more people the more of a family spirit, you know the guys are hanging out together are best friends. Some of them are living together you know, playing and training together in the house that allows us all.  We are playing football, we are playing our Sunday league team together as well so there really is a big family feel to our side of that so that dictates our strategy whereas others it might be more, right we want, who’s the best, who do we think is the absolute best that we can get a hold of and that might mean having yeah, an A and a B side you know in case there is a different patch but again you don't know what the patches are going to be so how do you, you know pick a certain skill, er it's a lottery.

 

Ollie
Very tough indeed. I guess kind of just in the interest of time the last aspect to this kind of with just kind of a commercial hat for everyone and I guess legal hat as it were. Just in terms of when you see like new games emerge right, so if we look at Apex as a very recent example where 25 million users over a weekend, you then see like Twitch rivals small competitions and you can see a player there who is an absolute God at the game but you are not sure of that player’s commercial value. You've  got some teams like NRG where they signed Dizzy who was a kind of nothing streamer and now has 15,000 subs, you’ve got a load of orgs signing these players and kind of signing in Apex squads already although there has not even been a murmur of an Apex competitive scene yet. Um are these kind of speculative commercial decisions and do you think players are at risk signing so early in a game title that doesn’t really have or just has a nascent pro team?

 

Tom  
I think that’s why you see people like Anna said signing up for a short deal. You could sign up for a year and in a year’s time if it doesn’t work out you are still probably nineteen years old and you have still got your whole life ahead of you. So yeah I think, I don't think there is too big a risk there, the only risk will be the loss of chance for you know whether you could have spent your time playing League of Legends or CSGO, you know you could, that sort of thing is the main loss but I think as long as you have a short-term contract I don't think you are at that.

 

Seb
It’s a shared risk isn’t it?  If a player keeps himself free from a higher earning potential if they are really, really good and even though they don’t know they are yet, then you know, they have a chance to make a lot more money but then equally if they are not as good then they might be without anything.  So there’s a shared risk on both sides so there just needs to be I think some sort of comfortable middle ground.

 

Anna  
Also the challenge there is as long as the player for example has representation you would usually aim for a couple of parameters in the contract that actually this player you know is successful for example. So if the player is really good you could have clauses in there that makes sure that the salary raises for example and I... usually when a game starts out and new players what they actually need usually is a bit of financial support so there is not a big risk involved teaming up with a team you know and getting some, get your own player brand going even if its short-term.

 

Tom
I think in the sports world as well it is very rare to have this is your flat salary so whenever I do a playing contract for a footballer I would always have, you know you get an appearance bonus, you get a goal bonus if you score a certain number of goals then we have an opportunity to review. You’ll find it in sponsorship deals so with Adidas for example doing a contract with them and a Premier League player and you have exactly the same performances there so if they score a certain number of goals then great you get this bonus.  If, you know if it’s deemed a success by Adidas at the end of it, the end of the term of the contract, they have a right of first refusal to sign you up again. If you want to go with Puma you then have to tell Adidas what Puma offered you and they are obviously given the opportunity to match it. So I think you know the sport model fits in quite well and can be sort of applied to Esports quite nicely, it’s just whether or not players and teams and organisations want to adopt that.

 

Anna  
I think there are a couple of differences here. One, when it comes to bonuses I’m a big fan of performance bonuses; however depending on the game it’s really hard to define what kind of bonus makes sense. So for example in League of Legends, fatal plays like, if the team is not really successful we are going to drop your salary to amount X, that’s not going to be agreed to just because it’s a team game so it’s beyond control. But then again you are mentioning goals you know in in League of Legends like what do you say so okay if you smite 17% of the Barons as a doggler then you are going to get higher. It’s, it’s just really hard to define anything that makes sense there and on top of it we are talking about salaries, yes which are six figures, sometimes even high six figures, but you know any type of bonus at least in Germany is from a tax perspective highly disincentivised so it does not make necessarily sense to have lots of bonuses in your um contract and then again football has beautiful instruments, how to handle flexibility with contracts, you mentioned right of first refusal for example. That is you know in some Leagues forbidden. Um in League of Legends riot values, league stability and over basically organisations having a handle over the players for you know multiple years. So for example that’s not an option for us in our contracts in the LEC unfortunately.

 

Tom
Yeah and I think that is definitely true. There is certain things like you know Riot have a complete prohibition of betting sponsors whereas in football you know, or in any other sport, they are the biggest sponsors of if you look at say snooker for example, it’s pretty much all betting sponsors.

 

Ollie  
Yeah I mean I think yeah you can go down the old publisher discussion and I fear that that would take another twenty years so yeah. [Laugher from Tom] Yeah I think we have kind of done spot on for time so I’d like to thank you all for joining me on this episode of the ESI podcast in partnership with Mishcon de Reya and we will be back next time.

[Music plays out]  

 

 

In this episode of the esports podcast, in collaboration with Esports Insider, we discuss the image rights of both the teams and the player involved in esports, and whether these are mutually exclusive. Given the meteoric growth that has occurred in esports, our panel of experts assess what can be learnt from the approach taken by other offline sports.

Featured in this episode are:

Tom Murray, Associate, Mishcon de Reya
Ollie Ring, Head of Media, Esports Insider (Host)
Anna Baumann, Managing Director and General Counsel, Rogue
Seb Brown, Commercial Director, Hashtag United

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