eSports player agreements: what works and what doesn’t

(in 30 mins)

Jas Purewal

27 October 2015

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What we’ll discuss

1. What works and what doesn’t, for both teams and players.

2. Case studies.

3. The bigger picture…

4. Q&A.

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Hello

I’m a video games and eSports lawyer. Over a decade of experience in international law firms in UK, Europe and California. Founded Purewal & Partners to focus on games, eSports and digital broadcast law in London in 2014.

I have advised nearly all parts of the eSports ecosystem over the last 5 years: players, teams, leagues, broadcasters and brands.

Come say hi: @gamerlaw or jas@purewalandpartners.com.

Not me

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Key parts of a player agreement

1. Rights and obligations.2. Financial terms.3. Who owns what?4. Duration and termination.5. Legal stuff.

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(1) Team and player stuff

• Quality standards.• Player participation. • Equipment/facilities.• Expenses.• Travel and

immigration.• Public appearances.

• Content creation.• Player welfare.• Minimum age?• Exclusivity.• Sponsorship.• Image rights.

The player agreement should (but doesn’t always) deal with stuff like:

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Rights and obligations – a few examples of what you might see (good and bad)

“Player must do his best to win every round and match legally.”Well-intentioned, but doesn’t really help team or player.

“Player will: use his best efforts to promote the success of the team (especially at tournaments), act professionally, fairly, legally and as a good sportsperson.”Better: more enforceable, more realistic, more balanced.

“Player is engaged by Team as a contractor and not as an employee”.Employee/contractor vitally important in player agreements (especially in European Union). Series of legal tests determine which applies. This is COMPLICATED.

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(2) Financial terms

• Basic remuneration: how much? How structured? How to incentivise players?

• Prize winnings and other revenue (stickers, merch etc): who gets what?

• Payment terms: when and how does a player get paid? Important: timings, formalities, definitions (what does ‘net revenue’ mean?)

• Tax: who pays the tax-man (and how much)? This is going to be v important in future

• Protecting players (and teams?): statements/interest/audit? Doesn’t really happen atm.

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Financial terms- a few examples (good and bad)

“Player shall keep all money from small tournaments. All money from other tournaments shall be split 80/20”. What does ‘all money’+‘small tournaments’ mean? Who gets 80 and who gets 20?

“Player shall be entitled to 50% of net profits from streaming revenue”.Better, but what does ‘net profits’ mean? What (if anything) comes off gross?

“Team will share an agreed percentage of merchandise and similar revenue with Player.”Doesn’t really mean anything – could cause headaches for team and player.

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(3) Who owns what?

Who owns all these (increasingly important) things:

• Player-made content? (e.g. blogs, videos, streams)• Player equipment?• Awards/trophies?• Data?• Player name/logo/persona?

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(4) Term and termination rights – how long does the contract last?

“This Agreement will run for 2 years from its effective date. Player grants Team an unlimited option to extend this Agreement for additional periods of 1 year per on the same terms and conditions applicable to the term of this Agreement.”How long is the right basic term? Down to commercial negotiation. Other wording gives team indefinite extension powers: is that desirable for either side in long term?

“This Agreement shall run for 1 year (“Initial Term”), following which it shall automatically renew for successive one (1) year periods (“Renewal Term”) unless either party provides a written termination notice at least thirty (30) days prior to the expiration date of the relevant Initial Term or Renewal Term.”Better: basic term, extends automatically but both sides can say no. In effect gives the player some control, which results in a more equal bargaining power.

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Who can terminate the contract and when?

“Team can release Player early if it is in the best interest of Team.”Very team-oriented but again could lead to headaches with players. What is team really trying to achieve and can be done better?

“Player cannot terminate this Agreement before it expires for any reason except as provided herein. Team can terminate this Agreement at convenience.”Again, very team-oriented. E.g. if objective is for team and player to try out a relationship, a probation period might work better for both sides.

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Transfers and penalties

“Player will not sign with any other team during this Agreement, unless Team approves it in writing. Any breach of this Agreement will lead to a penalty of at least Euro 5,000-50,000 as set by Team.”In most countries, a clause that is only intended to penalise a breach of contract could be legally unenforceable (and could make whole contract unenforceable). This hurts team more than player. If team needs to have control, there are better legal ways to do it.

“Player will follow Team’s Code of Conduct and acknowledges that breach could cause Team substantial damages. The parties agree that such damages will be assessed by reference to the breach but are likely to be around [AMOUNT], which constitutes liquidated damages and not a penalty”.Much better legally: more likely to be enforced (but still subject to applicable laws).

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What happens after the player leaves?

“If this Agreement is not renewed, the Player may not enter into discussion with or engage with any other third party eSports business or team for no less than 2 years from the date this Agreement expires.”Unlikely to be enforceable: non-compete clauses need to be very carefully drafted, otherwise unenforceable.

“You must not, without the prior written approval of Team, for a period of six (6) months from the termination date of this Agreement directly or indirectly induce, solicit, entice or procure any Team member, employee or other staff member to leave Team or provide their services to any third party.”More likely to be enforceable: focuses on staff poaching, shorter timeframe, better drafted.

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(5) Legal stuff

• Liability stuff (i.e. what happens when there’s legal trouble).• Confidentiality (should be mutual, protecting team and player).• Resolving disputes (they do happen – how do we resolve them?)• Language (both team and player should understand it!)• Governing law and jurisdiction (which country’s rules govern the contract?)

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Some wider considerations

• Higher profile for ‘problem areas’, e.g. cheating, PEDs, poaching.

• The exclusivity arms race.

• eSports regulation?

Thanks!

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........................................................E: jas@purewalandpartners.comW: www.purewalandpartners.com

T: @gamerlaw........................................................