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Activision Blizzard's Mishandling of the end of the Heroes of the Storm Global Championship May be Legally Actionable

December 14, 2018

 

 

For those that haven't heard the news, Activision Blizzard announced yesterday that they are discontinuing the Heroes of the Storm Global Championship, effectively immediately

 

"We’ve also evaluated our plans around Heroes esports—after looking at all of our priorities and options in light of the change with the game, the Heroes Global Championship and Heroes of the Dorm will not return in 2019. This was another very difficult decision for us to make. The love that the community has for these programs is deeply felt by everyone who works on them, but we ultimately feel this is the right decision versus moving forward in a way that would not meet the standards that players and fans have come to expect."

 

 

This comes as a complete surprise to the HotS pro scene.   According to HotS professional players and talent, they weren't given any advance knowledge that that HGC wouldn't be continuing next year.  


 

 

If accurate, this is undeniably a very unprofessional approach taken by Blizzard.  We're talking about a multi-billion dollar corporation, who apparently couldn't be bothered to let their full time contracted players know that they were about to be out of a job.

 

Now, this in and of itself isn't legally actionable.  While I haven't seen a copy of the professional player and talent contracts, I suspect that they sign new contracts every year.  With respect to the players and talent in the HGC at the start of 2018, I would be very surprised if they had any claim against Blizzard.  This is undeniably a terrible way for Blizzard to treat their contractors and employees, but this conduct is usually legally permissible.  Instead, in my opinion, Blizzard should have handled the "winding-down" process of the HGC in one of two ways:

 

 

  • Prior to the 2018 season, Blizzard should have announced that 2018 would be the last season of HGC, and celebrated it in a way benefiting its substantial history.

  • If the decision to discontinue HGC really was last minute, they should have taken the same approach with a 2019 season.  Blizzard has the resources to do so.

This is more a question of professionalism, not legally binding consequences, so I'll leave further discussion of the morality, professionalism, and public relations to other writers more intimately connected to the HGC players and scene.

Possible Legal Implications

 

"But Adam, didn't you just get through stating that all the current HGC players and talent likely don't have a claim against Blizzard since they were almost certainly contracted on a year-by-year basis?"

 

Why yes, I did say that.  However, there's one group of players we haven't discussed yet, the Fall 2018 Crucible Winners.

 

For those who aren't familiar with the HGC Crucible System, here's a brief description of how it worked:

 

In the HGC Open Division, teams from North America, Europe, Korea, and China compete for cash prizes and a chance to join the HGC.

 

Each region holds an open-entry tournament every other week. The winning teams earn points and cash prizes.

 

At the end of each Phase, the 16 teams with the most points battle it out in the Open Division Playoffs for cash prizes. Format is an 8-team double-elimination bracket with best of three for the first round, best of five finals for the second round and onward, and a best-of-seven finals with a 1-map advantage for the team from the upper bracket.

 

The 1st and 2nd-place teams from the Open Division Playoffs also earn the right to compete against HGC teams in the HGC Crucible for spots in the next Phase. In the HGC Crucible, the #1 Open Division team picks their opponent.

 

If the challenger team wins their match in the Crucible, they join the HGC, and every player in the HGC reportedly received a salary of at least $20,000.

 

Here's how Blizzard describes the Crucible match on their official website:

 

 

Scythe Esports defeated Simplicity in the Crucible, which, according to Blizzard's own rules and website, entitled them to a spot in the HGC and $100,000 for the players of the team for the season.

 

 

 

However Blizzard has since decided, after Scythe won in the Crucible, there will not be a 2019 HGC season.  This is where the potential legal claim against Blizzard resides.

There are at east two potential theories of liability Scythe Esports and its players may have against Activision Blizzard: breach of contract or detrimental reliance.

 

Breach of Contract

 

A successful breach of contract action requires the following elements:

 

 

  • Existence of a contract

  • Performance by the aggrieved party under the contract

  • Failure of the other party to perform under the contract; and

  • Damages to the aggrieved party

Here, a court would likely hold that there is a contract between Scythe Esports and Blizzard for Scythe to participate in the HGC Open Division.  A valid contract requires consideration (gain) for both parties to the contract:  

  • Blizzard's consideration was the ability to showcase Scythe Esports' play in the Open Division for promotion and advertising purposes.

  • Scythe Esports' consideration was the opportunity to play in the Open Division to earn a spot in the HGC with their guaranteed base pay.  

Scythe performed under the contract--they participated in the Open Division, finished at the top of the standings, and won the Crucible Match, thereby qualifying them for the HGC, and the rights and compensation gain thereto.

 

Blizzard has failed to perform under the contract--they canceled the HGC after Scythe finished performance under the contract, and unless there is backroom dealing going on that I am unaware of, Blizzard has made no statements that they will be paying Scythe Esports compensation for the 2019 season.

 

The damages are also obvious--Scythe Eports was entitled to monetary compensation for participation in the HGC.  

 

Absent any additional contractual agreements between the parties that I am not privy to,  this is what I believe to be Scythe's best claim against Blizzard. 

 

Detrimental Reliance

 

 Should a successful breach of contract action not be possible, Scythe may have a claim for detrimental reliance.  A successful claim under the theory of detrimental reliance requires the plaintiff to show the following:

  • a promise made by the Blizzard to induce action by Scythe Esports

  • Action on the part of Scythe Esports in justifiable reliance of Blizzard's promise

  • An injustice caused that can only be avoided by enforcement of the promise

Here, Blizzard made a promise to Scythe Esports--that should Scythe win the Open Division and Crucible Match, they would join the HGC.  

 

Scythe, in justifiable reliance on that promise, performed and won in the Open Division and Crucible Match.

 

Blizzard is now failing to carry through on their promise, and the only way to remedy this failure is to force Blizzard to perform on their promise.

 

 

This is by no means an easy cause of action to litigate.  There will likely be boilerplate language in the the Open Division contract that the Scythe Esports players signed that limits their legal ability to bring claims against Blizzard.  I have also not had the ability to review any additional contracts signed between the parties--this is just an outsider's view looking in on what has been made public at this point in time.  

 

At the end of the day, I mostly just feel terrible for the players.   They worked so hard to achieve their goal of joining the HGC, only to have it ripped out from under them.  Scythe Esports is doing their best to help their players, but I can't imagine how angry they must be.  Scythe's owner had the following message for his players: 

 

 

 

All that being said, I believe this to be an issue worth further examination.  I would welcome anyone with more information, questions, or concerns regarding this situation to reach out to me directly.

 

 

 

 

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