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Providing legal protection for a new breed of athletes

On Behalf of | Nov 29, 2023 | Business Law

Professional athletes and sports superstars make millions of dollars from their salaries, bonuses and prize money alone. On top of that, they also generate even more significant earnings from endorsements, appearances, licensing and sponsorships. Among the highest-paid professional athletes come from the basketball and football industry.

However, the esports industry is growing quickly and drawing attention as demonstrated by its viewership statistics and overall revenue. Professional gamers make a living by engaging in competitive video games and live streaming. They also earn by joining organized tournaments and leagues. Because the esports industry is relatively young, these pro gamers may not realize how much they can earn simply by negotiating fair contracts.

How can pro gamers ensure they receive adequate compensation?

The idea of becoming a professional gamer is a dream for many video game enthusiasts. Professional gaming has only recently been recognized as an actual profession in Indianapolis. Just like any competitive sports industry, a professional gamer’s salary will depend on their level of skill and the game they play.

Their most common source of income comes from prize money. They may not realize the monetary value of a sponsorship deal, especially one that does not take advantage of their lack of legal knowledge and love for the game. Legal guidance can be invaluable when negotiating contracts with potential sponsors and partners, not only for fair pay but also for protection. An effective contract can protect a pro gamer from the following:

  • Penalties for breaches of discipline
  • Nondisclosure agreements
  • Buyout clauses
  • Partnership agreements
  • Deals with advertisers
  • Product placement agreements

Contracts can also ensure that the esports athlete earns from merchandise and ticket sales they inadvertently endorse.

Understanding the fine print

Anytime an individual or entity asks a pro gamer to sign something, they must thoroughly understand what they are agreeing to. A contract exists to protect all the parties involved, but legalese can be confusing and manipulative. What may seem like the deal of a lifetime could be a financial and legal liability in the future.

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