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What to know about esports contracts

On Behalf of | Jul 21, 2020 | Business Law

In 2020, the number of esports players is expected to reach an audience of around 500 million and make a little over $1 billion in revenue. Pro esports players are the life of the business, and they sign contracts just as a standard pro sports player would. The contracts in Indiana can be complex, with high stakes, so players should be aware of what they are signing.

Each esports game has different standards and regulations. For example, the salaries differ between racing and shooting games. The player’s age has to be considered as well. A player under 18 needs parental permission.

The terms of the contract will indicate if a player is an individual contractor or team employee, which makes a difference in the legal terms of the relationship. A team employee has more legal liability than an individual contractor, which means an employer may prefer to classify members as a contractor. However, that would not be enough to establish the working relationship.

Courts can still determine a relationship regardless of what the contract says by considering level of control and length of employment. Having clear terms in the contract is important to avoid conflicts. Players should try to negotiate a fair salary, which may include base pay, sponsorship, and contests. Since salary information is commonly transparent in this business, terms need to be detailed and include how each type of pay gets divided.

The contract should include terms regarding buyouts, termination, trading, and transfer. A lack of clear terms and flexibility in these areas could have adverse results for players. For example, a team employer could trade members without their consent or charge high buyouts without clauses. Intellectual property is another consideration since many members have social media or trademarks linked only to them.

Even when terms are clearly outlined, conflicts could still arise. If a player runs into a legal problem, seeking a business law attorney may be their best course of action.

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