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Creating an Esports Contract Template: Part 2

July 10, 2018

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.

 

This is Part 2 in a multi-part series on the creation of an esports contract, and an extremely basic template to accompany the discussion.  You can find Part 1 Here, and I would suggest that you begin your exploration of the topic with the first part of this series, as I explain in detail why I have undertaken this project.  

 

My standard disclaimer still applies: this discussion and contract template should not be taken as a finished product.  It should be instead considered as the explanatory vehicle it is; my attempt at going through the basic parts of a contract in an attempt to educate anyone who will listen.  I highly recommend that you seek legal advice in your jurisdiction of choice before signing any contract. 

 

As an interesting side note,  most of the organic "Google Search" hits to my website have come from people searching for information on "esports player contract templates."  The people have spoken as to what they are interested in, and I will belatedly oblige my audience's interests.

 

With my customary rambling now out of the way, let's get down to business.

 

Resources to be used while reading this Article

I will also be using the NBA Uniform Player Contract. I discussed this contract, and why esports should look to traditional sports for help in how to structure player, team, and league agreements in my article on the Overwatch League and Player Unions.  While there will not be a direct 1 to 1 comparison between traditional sports and esports, there's no better place to start.  

Compensation

 

Now we're finally to the real meat of the contract (at least to a third-party observer who enjoys seeing what their favorite players are being paid)!   This section can range from extremely simple to horribly complex, depending on how the Organization and Player wish to structure their deal.  There can also be external forces that require specific baseline compensation--the best example is that the Overwatch League reportedly required Teams to pay a base salary of $50,000 to each player on the roster.  Unions can also influence salary requirements, but such discussion is beyond the scope of a basic esports player contract (I do discuss this subject in some detail in my Overwatch article linked above). 

 

Here are some of the sample types of compensation that the Organization could offer to a Player:

  • Salary 

  • Performance bonuses

  • Benefits (housing stipends, health insurance, etc.)

  • Coverage of expenses for Player travel to events

  • Percentage cut of team winnings (this may or may not be tied to performance bonuses) 

  • Royalties for team advertising sponsorship (unlikely in most instances)

  • Really, this list is only limited by the imagination of the contracting parties (and public policy), which is part of the reason contractual agreements are so interesting

 

The SG Contract included the following applicable language as to compensation:

 

RSnake agrees to provide support, agreed upon between Player, Player’s Manager(s) and Officers of RSnake (“Officers”), for registration, travel, and lodging expenses for Player to events, including, but not limited to, tournaments and team houses, when financially able to provide for such.

 

RSnake agrees to provide equipment, and gaming house when the team arrives in China, including, good living conditions, and monthly salaries.

 

RSnake agrees to support Player in any manner possible upon request, if such request is deemed necessary by Manager(s) of Player’s team and Officers.

 

I hope that the absolutely crazy issues with this contractual language are self-evident (hint: they're in bold). 

 

  1. Who gets to decide when the Team has the financial resources to provide support to the Player, the Team?  

  2. When mentioning support for the Player, it again references how the request is vetted by the "Manager(s)," this is again leaving support to the subjective whims of the Team. 

 

I would never allow a contract I was vetting to contain any of this language.  Contracts are supposed to remove uncertainty, not induce additional layers of uncertainty.  I discuss similar concerns of uncertainty and ambiguity with "morality" clauses in contracts in my Overwatch League article, and I also address these concerns briefly below.

 

The SG contract does specify that the Player shall receive $1,000 a month salary, with assorted prize splits based upon placement in major tournaments.  Most of the fourth section (titled "Revenue") of the SG Contract is well drafted, and I recommend that you take a look at it yourself. 

 

 

This is the basic language I am including in my contract template:

 

The Team agrees to pay the Player for rendering the services and performing the obligations described herein an amount of ________ per month, pro rata, less all amounts required to be withheld by any governmental authority.  

 

"Pro rata" means a proportional payment for a partial time period less than a month.  This is far more simple than it sounds.  An example: a half month period would be paid half the monthly salary amount agreed to in the Contract.

 

Insert the following compensation sections below if applicable:

 

[Signing Bonus]

[Performance Bonus]

[Equipment Provided to Player]

[Housing Stipend]

[Health Insurance or any other benefits]

[Trade Payments] 

[Advertising and Intellectual Property Compensation]

 

These sections will be highly specialized, and are not easily addressable in a basic template.  I may do an additional article on these sub-sections at a later date.

 

 

 Services

 

The obvious corollary to the compensation paid to the Player are the services that the Player provides to the team.  These are the obligations that the Player is contractually agreeing to preform in order to receive the agreed-to salary and other assorted benefits.  This is another area that can be influenced by third party agreements (such as Collective Bargaining Agreements ("CBA") or standards imposed by league or game developer regulations).  There will also be standards imposed by the jurisdiction's worker protection laws.  It is an unfortunate fact that some teams will attempt to take advantage of their less savvy players when it comes to how much practice, play, and media obligations are imposed on their Players.   Local laws can help Players avoid these awkward situations, although the Player may need to retain counsel to be adequately advised of their rights.  

 

Here's the Services language from the SG Contract: 

 

Player agrees to play for RSnake as an independent contractor. Through their signature, Player confirms that they have no other legal binding to any other team or organization. Player shall not enter into another contractual relationship with any other team or organization in the field during the term of this Contract until arriving in China.

 

Player agrees to play matches to the best of their ability, when selected, to participate in team and individual practice, and to maintain a healthy lifestyle.

 

Player must wear official RSnake clothing at all times during events and competitions.

 

Player agrees to make themself available to Sponsors for promotional work as requested, unless previous notice is given of accepted unavailability by Player’s Manager(s).

 

Player agrees to allow RSnake to utilize their related personal rights exclusively for the duration of the Contract, including, but not limited to, personal pictures, team pictures, for advertising usage.

 

Player understands that they represent RSnake, and shall not act with bad manners including, but not limited to, cheating, violence, abuse, racism, and unsportsmanlike conduct.

 

Again, some of this language includes vague language that, in my opinion, is counterproductive to a written contract's goal of producing certainty in the contractual relationship.  I've highlighted what I see to be the biggest offenders in the SG Contract language above.

 

Some of this is just my own distaste for "morality clauses."  There is some necessity for morality clauses in the modern internet age (especially given that esports players are, for the most part, extremely active on social media) but the lack of unambiguous standards and a clearly delineated final arbitrator of who decides exactly what behavior is "immoral" is concerning.  This language vests far too much power in the hands of the Organization, to the detriment of the Players.  The morality language is better addressed in its own separate section apart from Services, which is how I will address it in my template.  

 

Player's Unions can help to defray the morality clause issue.  Major sports leagues have all taken this approach through Collective Bargaining Agreements.

 

However, we are not yet in the world of CBA's and Player Unions.  The Services section language does not ingratiate itself well to a template--but should be easily editable without too much concern for breaking something vital. Here is the language I will be including in my template:

 

The services to be rendered by the Player pursuant to this Contract shall include:
 

  • Attending ____ hours of team practices and meetings per week, with a regular schedule to be determined at a later date.

  • Attendance at team "boot camps" before all major tournaments, all travel expenses to be covered by the Team.

  • Participation at all major tournaments [as determined by the esport game at issue], and at minimum ____ minor tournaments per month.  This includes participation with "media events" at these tournaments, including, but not limited to, signings, interviews, and panels.  

  • ____ hours of streaming content on Twitch/YouTube/Facebook per month.  

  • Reasonable promotion of products that sponsor the Organization.  The Organization shall allow waivers on an individual basis for promotion of products that the Player finds offensive or immoral.

Conduct

 

This is by far the most difficult section to draft.  I think it would be fair to say that it is impossible to draft a "perfect" Conduct section.  Regulation of conduct will necessarily require some leeway and ambiguity in the construction of the contract--it is impossible to predict every potential "bad act" that the Player could undertake.  

 

The Conduct section will be the most litigated section in most contracts.  Organization and Player moral and social values will never align perfectly.  There will be times where the only correct solution is to appeal to a third-party: either a judge, jury, or arbitration panel.  All I can do, in the creation of my Conduct template language, is create an acceptable starting point.  Here is the basic language I will be including in my template: 

 

The Player agrees that his/her personal conduct reflects on the public perception of the Organization, and that his/her role as a Player for the Organization makes him/her a public face for the Organization.  To that end, the Player and Organization agree that the Conduct of the Player, both during public events and public-facing down-time, is of great importance to the Organization, and favorable Conduct is material to this ongoing contractual agreement.  The Player agrees to abide by the following behavioral standards:

 

A. The Player shall at all times abide by all applicable laws that the Player is subject to;

 

B. The Player must at all times observe the highest standards of personal integrity, and not take any actions that brings the Player's integrity into question.  

 

C. The Player must compete to the best of his/her skill level at all times.  Any form of cheating by the Player will not be tolerated.  The Player must not attempt to influence or manipulate the result of any match or tournament that the Player is involved in for pecuniary gain.

 

D. The Player is prohibited from the use, possession, or distribution of any illegal drugs while engaging in activities on behalf of the Organization.  Violation of this policy will result in an immediate severance of the contract. 

 

E.  The Player agrees to conduct himself/herself to the highest standards of sportsmanship, and to not do anything that is materially detrimental to the best interests of the Organization. [Author Note: this is the most subjective of the Behavior language.  While I think something to this effect is necessary, there needs to be checks on the subjective power of the Organization to enforce this provision.]

 

F. The Player agrees that the Organization, through its Officers, individually or collectively, are the proper party to make the decision that the Player has violated any sub-section of the Conduct provisions of this agreement.  If the Player is fined, suspended, or terminated for a violation of the Player's Conduct standards, upon request by the Player, the Organization must provide written findings of fact that supports the Organization's conclusion that the Player violated the applicable Conduct standards.  

That's it for today.  I expect that I will be able to finish the bare-bones esports player contract template in Part 3 of this series.  

 

Here is a PDF of the current progress of the Template.  

 

I am compelled to attached my (other) standard disclaimer: 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 now making myself available for esports contract review.  Please reach out to me via email if you are interested, and we can discuss it further.  I hope my readers find Part 2 informative--I am available for comments, praise, or criticisms via email, Reddit, or Twitter.  

 

 

 

 

 

 

 

 

 

 

 

 

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