Creating an Esport Player Contract Template: Part 1
Attorney Disclaimer: This Article is meant for informational purposes only. Your jurisdiction's laws may differ from what is discussed below. In addition, laws change over time, and the language discussed below may not reflect the current state of the law. You should always consult with a lawyer before signing, or before presenting a contract to someone else to sign. I am not your attorney unless we enter into a written retainer agreement.
The project I am beginning today will be, at its core, an imperfect one. There is no such thing as a perfect template, especially when it comes to "talent contracts," a broad descriptive term that applies to esports player contracts. However, I've come to the decision that even my basic knowledge of the subject area of contract law can do nothing but help to improve the current amateur attempts that are currently circulating the internet when it comes to esports player contracts. Those that are able to obtain a more refined contract are already in such a position that my small effort will have no impact on them. This series will instead be directed at a few discrete groups of people: (1) those that are considering entering into contracts and are curious about what they should be looking for; and (2) those who are simply interested in terms and conditions that may apply to some of their favorite professional esports players.
With these initial thoughts in mind, I feel it is important to reiterate at this point that all templates should be taken at a grain of salt, and if anyone is seriously considering into entering into a contractual agreement, (either a team, or a player) it is my ardent suggestion that you have your contract at least reviewed by an attorney, even if you do not have the resources to retain counsel throughout the entire process. Contract review is a small price to pay to avoid a situation that you could regret for a long period of time (some attorneys may even be willing to do basic contract review pro bono as a service to the esports community).
I plan on doing this project in multiple posts. I will post the completed template at the end of the process. The standard disclaimer will apply--any such template is not a finished document, and should be seen as nothing more than a guidepost to important subjects that should be addressed in any esports player contract.
With all this in mind, let's get started!
The best place look for guidance in starting to create an esports player contract template is with an actual esports player contract. Lawyers do not like reinventing the wheel--we just improve on the vehicle once we see where the wheels came off on prior attempts.
There is only one set of professional player contracts (to my knowledge) that have been released to the general public: BattleSnake Gaming a/k/a Speed Gaming's contract with their Dota 2 team back in 2013. The CEO of Speed Gaming actually released the full contracts to the public, thereby verifying their authenticity. I will use this contract as a start point, and as we shall soon see, I would not consider it a great example of drafting. I will be using Speed Gaming's contract with WehSing "SingSing" Yuen as the baseline.
Here is a link to the full PDF of the contract between BattleSnake Gaming and SingSing. I will reference to this throughout as "The SG Contract." Go ahead and take a look before reading on--it is important to see the contract as a whole before breaking it down into its various pieces.
Parties to the Contract
The first part of the contract (as Speed Gaming rightly addressed) is to determine the parties to the contract. This seems self explanatory, but is actually significantly more important than it would initially appear.
The SG Contract states:
THIS CONTRACT is between WehSing Yuen, alias SingSing, hereinafter referred to as "Player" and Ru Gao Shi Rattlesnake Software Development Co, LTD ("RSnake"), registered at No.3 Ru Gao Shi Ru Cheng Zhen Jie Fang Road, Jiang Su Provice, China. Player hereeby agrees to play for RSnake as a contracted player.
There will generally be two parties to an esports player contract: the Player and the Organization.
The Player:
This is self explanatory. The full legal name of the player should be included in the contract for the party to be legally bound to the contract, and to avoid any confusion as to the signatory. Including the gamertag (SingSing in The SG Contract) is unnecessary, but reasonable step to take given the industry. Something tells me some of Dwayne Johnson's contracts included "The Rock" in them.
The Organization:
This is the party that bears the greater scrutiny at this point in the process. The name of the organization included in the contract is of extreme importance--protracted lawsuits have been fought over the inclusion of "LLC" instead of "Inc". in contractual language. Be positive that the organization named is the full name of the Organization as registered in whatever jurisdiction that they are incorporated in (for the United States, you can check the Secretary of State for their state of incorporation).
This is also important for another reason: the organization listed on the contract is the organization that will be liable for upholding their half of the contract. Of key note: the individuals working for the corporation are not (usually) on the hook should something go wrong, the corporation itself is. If you've ever heard the term "shell corporation" used in popular parlance, the term should help explain why the corporation listed on the contract is of such great importance. If the organization reneges on the contract, they are the only organization liable to the player for their broken contract (this usually occurs by failure to pay salary, prize winnings, or housing costs, if applicable).
What does all this mean? The Player singing a esports player contract should take careful note that the organization signing on the dotted line is a reputable one, so that should something go wrong, there will be an avenue for recovering what they are owed. Do some basic research, and make sure that they are truly a registered entity somewhere, and inquire into their past business dealings before committing yourself to a legal relationship.
I am not in love with the last sentence of the Parties to the Contract section--"Player hereby agrees to play for RSnake as a contracted player." Not only is this ambiguous (plays? contracted player?), but it rightly should fall under its own subheading of "Purpose of the Contract" to help set some introductory expectations. So, I'll remove this sentence from our template.
In addition, for increased visibility and clarity, I would include the date that this contract was entered into at the top, as well as at the signatory lines at the bottom. This is more of a stylistic choice than a requirement under legal standards, but hey, most of the battle in these contracts is clarity for all parties involved.
Here is the language I'll be adding to my template
This Player Contract (the "Contract") is made and entered into on ______ __, ____. ("Effective Date")
By and Between:
PLAYER, alias TAG,
(hereinafter referred to as "Player")
[address]
and
ORGANIZATION
(hereinafter referred to as "The Organization")
registered and incorporated in ____________,
[principal address]
Background Section
(a/k/a "Purpose of the Contract")
Next up, the purpose of the contract section, which can also aptly be titled the "Background" section (which is the term I will be using). It is also sometimes called the "recitals" section. I prefer the plain language term.
The Background section can accurately be described as the least legally significant yet most contextually important section of a contract. Generally, the Background section will not include any legally binding promises between the parties. Instead, this section is best used to describe, in laymen's terms, the purpose of the contract, and the general understanding between the parties as to the nature of the contractual relationship.
This section can also be used to describe the past relationship between the parties. Should any dispute arise between the Player and Organization, this will help illustrate where the parties were prior to the contract, and help provide context to either a Court or an Arbitrator, so that they can fairly resolve the conflict. While this section, again, is not legally binding, it can help describe the intent of the parties involved whenever the intent is raised as an issue.
Please note that this section will be one of the most unique to any given contract. Any template language I provide below will need to be highly individualized to the given situation. When in doubt, provide more information rather than less, and consider acquiring counsel for finalizing the language.
Here is the language I will be including for the Background section:
BACKGROUND
A. The Player wishes to contract with the Organization in order to obtain [compensation, publicity, structured training environment, housing, teammates, etc.] from the Organization in return for his professional services as a [player, athlete, competitor, pick your term of choice] for [Dota 2, CS:GO, Dragon Ball FigherZ, etc.]; and
B. The Organization, by way of its experience, contacts in the esports industry, resources, and staff, wishes to provide the services mentioned in Part A to the Player, in return for the Player's services representing the Organization through [tournaments, streaming, licensing deals, etc.]. The Organization also desires and requires that the Player comport [himself/herself] in a professional manner as to not damage the reputation of the Organization through their association with one another.
C. Both parties wish this contractual relationship to increase their respective prestige and marketability in the esports industry, and both parties desire to use their contractual relationship for the benefit of both parties, and do not wish to use the contractual relationship to take actions to the detriment of the other party.
Therefore, in consideration of the mutual promises herein contained, it is AGREED and understood as follows:
Term of Contract
The next section is a simple one: the term (length) of the contract. Don't be fooled though--this is one of the most important terms to both the Player and the Organization. There are pros and cons to both short and long contract terms that should be considered by both parties to the agreement.
Short-Term
Pros: A short contract allows for flexibility. Neither party is "married" to the other. Instead, both the Player and Organization are only obligated to maintain their duties to one another for a short span of time--which helps minimize the likelihood any external complications or interruptions (such as injury of the Player, bankruptcy of the Company, or other external changes to the esports scene).
Cons: The biggest one is lack of stability. Humans operate better when they know that they'll have food on the table six months down the road. There is also less stress when the Player knows that he's still planning on living in the Organization's team house for the foreseeable future. It is also hard for Organization's to make long term licensing and sponsorship deals when the Player is not locked into a long term agreement.
Long-Term
Pros: The aforementioned stability is the biggest point in favor of long contract terms. Longer terms allows for the Player to focus more on their gameplay, and less on external concerns. Longer terms will also give the Organization the ability to more effectively conduct business with third-parties, as the third-party will feel more confident if the star player will be remaining with the team for the next three years.
Cons: The strong possibility of a change in circumstances to either the Player, the Organization, or both, is the biggest concern with long-term contracts. For example: the Player is hired as a young player who has not yet reached his full potential. The Player is given a moderate salary, and the contract term is for three years. A year down the road, the Player wins the World Championships. Suddenly, the player is worth five times as much as he was worth a year prior, but the team is still only obligated to provide him the same salary that he earned at the start of the contact. There are some methods that can be used to avoid this situation, and also there are some points to be made in favor the the Organization holding the player to such an agreement, (sometimes a team may acquire and pay a player with potential, in the hopes that they flourish and recoup the investment) but I will address these potential bonus provisions at a later date.
There is also another large con for long-term contracts--the rapidly changing nature of the esports scene in general. In many instances, this is a positive. There is no doubt that esports are a whole are experiencing explosive growth. This is sadly not true for every individual esports title. The slow deaths of games such as Heroes of Newerth, or the sudden death of games when a "sequel" is released (Counterstrike: Global Offensive, Dota 2, Marvel vs. Capcom: Infinity, etc) can wreak havoc on the financial realities for both Players and Organizations. A team may be unable or unwilling to provide financial compensation for years after a Player's game has been rendered obsolete.
Hopefully the above discussion will help any prospective Players or Organization's to start to consider the factors involved in calculating the correct length of a contract.
One additional piece of language to consider including would be a "renewal" provision. This will allow for the contract to be renewed for an additional term as described in the contract if neither party objects to the extension. This is much easier than having to sign a whole new agreement if both parties are happy with the current arrangement.
With all this in mind, the actual language included in the contract is actually quite simple:
Here is the language I will be including for the Term section:
DURATION AND TERM OF AGREEMENT
The term of the agreement shall be for _____ year(s), beginning on Effective Date of the Contract. This Contract shall be automatically renewed with the same terms for an additional ________ [month(s),year(s)], unless either party gives thirty (30) days written notice to the other party of their intent not to renew the agreement prior to the expiration of the agreement. This agreement may be renewed for as many terms as the parties desire.
I hope that this first part of my creation of the esports player contract template has been informative. I plan on continuing this format of explanation, and then providing the relevant contractual language, for the rest of this article series.
Here is a PDF of the first part of this template. I will continue to include new sections as I release articles on the respective content.
As always, I recommend reaching out to an attorney if either a Player or Organization desire entering into a contractual relationship if any real money or time is involved. I am, however, well aware of the realities of the esports landscape. I am always available by email, should you have an individual inquiry. Also, if you'd like to share contract language from one you've been involved in, I'd be more than happy to take a look, both for tweaking my own template creation process, and to provide feedback.
Update: Part 2 is now live and may be found here.