In the second part of our guest from Mischon de Reya LLP, Alex Byfield spoke to Simon Leaf and Max Nicolaides of Mishcon de Reya LLP to find out more about the Tfue v FaZe fiasco.
You can find part one HERE.
Disclaimer: This is a guest post from Mishcon de Reya.
Alex Byfield spoke to Simon Leaf, Sports and Technology Lawyer at Mishcon de Reya, and Max Nicolaides, Paralegal in the Esports Group at Mishcon de Reya, to discuss esports player contracts in light of the recent Tfue controversy. Simon and Max have a wealth of experience advising on Sports and Esports matters, including acting for both players and teams on a variety of different contractual, IP and image rights-related matters.
The current Tfue contract situation, which is stealing the esports headlines this week, isn’t the first time a young and promising talent has signed a long term contract in their late teens, which has ultimately filled them with regret later on. With your extensive knowledge on contracts, both traditional sports and esports, what advice would you give any up and coming player who came to you seeking advice after being approached with an offer from an organisation too good to be true?
Simon: My primary advice to a young talented player is: don’t be afraid to try to ask questions and negotiate. You’ve received the offer because you’re clearly good at what you do – so don’t just assume that you have to sign what’s put in front of you without speaking to others first.
I’ve seen many talented athletes just sign whatever is put in front of them by their agents without understanding what it is they are signing.
For those under the age of 18 who have signed contracts they now regret, it may be possible to exit the contract on turning 18. It is far better not to have to rely on this and to get advice on the agreement before it is signed.
What are the drawbacks to younger players signing multi-year contracts? Should young players avoid them?
Max: For younger players, the danger is that they become ‘trapped’ in a deal that looks really good at the time, but that doesn’t work for them in the long run. Younger players looking for their first big break into esports are often keen to sign a contract with a team as soon as possible and often aren’t thinking about where they might be in two or three years’ time.
The good news is that the more established teams out there are less likely to draft unfair multi-year contracts for younger players. Signing a player involves a big investment for an organisation as they have to provide equipment, housing, travel and coaching for the players (not to mention pay their salaries!).
Esports teams are in a constant balancing act between finding the next generation of talented players and fostering their existing players. This means they will often sign younger players on a short contract at first, with an option to extend it should the player perform well.
It is important to remember that players and teams are always free to renegotiate their relationship at any point, but if what you want is not in the contract then there is no obligation on the other party to agree to your requests.
What are the biggest red flags in any contract that players should be aware of?
Simon: Red flags can appear anywhere in a contract. I’ve seen sponsorship contracts with massive global brands that have effectively obliged the player to wear the brand’s clothing 24/7 – with the only carve out being the attendance at black tie events!
Thankfully, these types of clauses are not typical; however, there are lots of other issues that regularly come up where players have been tripped up. These range from exclusivity clauses that prevent the player from working with any other third party, irrespective of whether they are a competitor to the team or its sponsors – as we’ve seen recently with Tfue, to termination rights that could effectively leave the player without a team on very short notice, irrespective of whether the player has done anything wrong.
The other big items to watch out for are ‘image rights’, specifically what rights is the team looking to take in relation to the exploitation/commercialisation of the player’s image, and ‘payment terms’ in order to make sure that the player promptly gets paid each month.
Do you believe we could ever see anti-player poaching regulations in esports? If so, how do you believe it could work in this current landscape?
Max: It’s doubtful we will see uniform anti-player poaching regulations across the whole of esports. In the same way, different rules apply to different sports; the same goes for esports. The added complication is that as the owner of the IP in the esports title, video game publishers can exert a huge amount of control over the esports ecosystems in their games should they choose to do so.
For franchised leagues such as the LEC or OWL, the publishers have taken a very active role in governing how and when players can be transferred between teams.
For esports titles where the publisher licences the game to be used across a number of different leagues, it’s not so simple. Take CS:GO as an example, a team may be competing in leagues run by ESL, FACEIT, ELEAGUE and more. While there may be some uniformity on what can and cannot be done between leagues, each league will have different calendars and different rules governing what is and is not allowed. This can make it a tricky landscape for both teams and players to navigate.
If a publisher doesn’t want to regulate a league or game, they can delegate that responsibility to a third party league or to set up a governing body. The new governing body for College League of Legends set up by Riot in the USA is a good example of this.
Ultimately it depends on how active the publishers choose to be. The bigger franchised esports titles are likely to be governed by strict rules dictated by the publishers, whereas smaller titles, or open titles such as CSGO and DOTA2, will remain unregulated.
We’ve seen players tweet about their frustrations with their contract, players simply refuse to play and bench themselves, and now we have Tfue filling a lawsuit; what do you believe is the best way to handle a contract dispute that you may have with your organisation?
Simon: I think primarily all sides need to remain calm and approach any discussions to try to resolve the dispute with a sensible attitude. Litigation is an expensive – and rarely productive – experience, so ideally, a pragmatic solution should be sought that avoids the stress and cost of going to court.
Having said that, it’s important that all sides understand what their rights and obligations are under the agreement. It is therefore vital that the agreement is looked at in detail before it is signed, and certainly when there’s a hint of the relationship going sour. Good advice at the outset can save a lot of money and angst later.
Max: When frustrations or problems do arise, both parties should look for practical solutions. Understanding what both parties’ rights and obligations are under the contract is the starting point when trying to find an acceptable solution without further escalation.
Players tweeting about their frustrations can often be counter-productive, and issuing a claim in court is a step that should not be taken lightly and should be used as a last resort.
If you want to discuss or have any questions about esports player contracts, please contact Simon Leaf and Max Nicolaides of Mishcon de Reya at firstname.lastname@example.org and email@example.com.