Esports Law: Why Every Professional Gamer Needs a Team of Professionals
By Justin M. Jacobson, Esq.
Similar to other talent based industries, including music, television, and sports; professional video game competitors participating in organized esports should have a “team” of competent professionals around them to advise them and to consult with.
While this may seem straightforward in today’s media driven world where legal issues arise daily, it has become a prevalent practice for many professional gamers to review, negotiate and sign agreements with esports organizations and teams without any assistance. They also are failing to properly handle other aspects of their career such as the press, immigration, and tax matters. While it is never required to have third-party advice, let alone an attorney or other third-party consultant or representative involved in an individual’s career, it never hurts to have a professional person assist whose daily job it is it to handle these types of matters providing an athlete with insight in addition to support. In fact, it is the norm for an entertainer, athlete, and every other personality to have a “team” of professionals assisting them with their legal, business, marketing, public relations and other day-to-day needs. These individuals assist the talent in order that they can focus on competing in their sport.
Why A Professional Gamer or Stream Might Utilize An Attorney or Independent Representative
While a gamer may have mastered their craft and honed their skills, there are a variety of other members of a professional esports competitor’s “team” that are essential to a gamer’s career longevity and potential success. Some of these professionals could include an attorney, a personal manager or player representative, a business manager, a public relations manager or any combination of or all of these. These experts are similar to the type of individuals that are commonly used by musicians in the music industry. For instance, a personal manager typically handles a musician’s day-to-day affairs, such as booking hotels, transportation to and from live performances and appearances, booking of recording sessions and other personal affairs that an artist doesn’t have time to handle. This is similar to how a player representative or manager operates on behalf of a gamer, including assisting with tournament logistics. This is in addition to the representative acting as a buffer between the gamer and other parties, especially when dealing with the press, league organizers, brands, and endorsement requests.
Another essential player typically on an entertainer’s team—and one who is frequently needed and sparsely used by gamers—is an attorney. Similar to an attorney in show business, a lawyer practicing in esports frequently handles all legal matters for its client, including managing and advising on trademarks and copyrights as well as drafting and negotiating of all industry related contracts, such as the player contract and sponsorship agreements. A lawyer may also handle business entity formation and its associated formalities as well as possibly advising and drafting wills and other estate/trust documents to preserve their client’s wealth. These services can coincide with others offered by the talent’s other representatives.
In addition to an attorney, a business manager, who may also be a tax specialists or an accountant, is extremely beneficial and standard in most entertainer’s career. This individual typically assists a musician in collecting all of the artist’s appearance and sponsorship fees, royalties, tracking and paying of an artist’s bills, helping manage an artist’s investment portfolios as well as handling tax and accounting matters.
Similarly, a professional gamer is required to pay taxes on all of the income they earn gaming, including their tournament winnings, player salaries, streaming money, and sponsorship funds, as well as any related fringe benefits, such as free mileage earned as part of an endorsement deal with an airline. It even gets more complicated because several states may require taxes from an athlete or gamer.
What an Esports Attorney or Talent Representative does
Another prominent individual on an entertainers’ team could be their public relations (PR) representative. This team member can also act as a “buffer” to the outside world of press, journalists and fans by providing media training and crisis management assistance to ensure a gamer is able to handle all that is thrown at them, especially during a time of turmoil or stress. The PR professional is also able to “pitch” the gamer to various publications and podcasts for interviews and appearances to promote the player and build their personal brand.
While there are obvious drawbacks to a third-party representative consulting and representing a gamer, the potential downfalls that may occur as a result of a miscue could have wide reaching negative implications. For instance, there have been several potentially avoidable situations that have arisen in the last few years due to the lack of proper guidance on behalf of professional gamers. One of these consistent mistakes is the absence of contract assistance on behalf of a player causing the organization to retain provisions that dramatically favor them.
One of these important clauses is the “buy-out” clause. This generally provides the team with the ability to require a specified amount paid to the team prior to releasing the player from their contract. This demand may be for a substantial amount, which may inhibit the gamer from playing elsewhere without a huge financial imposition on the new organization. For example, esports organization, Immortals set a $1M buyout for three of its players, esports organization, Counter Logic Gaming reportedly asked for over $500K for its CS:GO team and coach, and esports organization, Faze Clan allegedly paid a reported $500K buyout (one of the largest player buyouts ever paid) for pro gamer Nikola “Niko” Kovač.
Another common problem faced by many pro gamers and one that could be mitigated are visa and immigration issues. There has been a series of examples of top players for major organizations not receiving visa approval in sufficient time to compete. This is a huge problem that could cause the player to lose salary; and, if they are unable to compete in a tournament, potentially a large sum of prize money. For example, Overwatch League competitors, including Geguri and the entire Philadelphia Fusion had “player logistics issues” leading up to the league’s start. Previously, both 100 Thieves and Gambit Gaming were unable to obtain visas for its respective teams to compete in major tournaments. Again, these are avoidable hurdles that proper planning and a team of professionals assisting the gamer can hopefully avoid the entire situation.
Finally, proper public relations professionals could be a tremendous asset to gamers and hopefully help avoid some of the recent scandals as a result of the esports professional’s conduct. For example, Overwatch League professionals Felix “xQc” Lengyel and Timo “Taimou” Kettunen both encountered problems for derogatory comments made in the heat of the moment. These comments caused xQc to be suspended and fined; and, subsequently, terminated for continuous “disparaging language.” It is apparent that a seasoned professional in these gamers’ corner could have provided valuable insight and training on how to best handle these stressful situations, including advising the gamer on how to optimally respond under high pressure conditions.
As esports continues to grow and the stakes continue to increase, a professional video gamer should be aware of what they know and what they don’t and aim to bring in competent professionals who can provide the assistance they require. While a gamer may see the additional cost that a professional representative imposes as prohibitive, the long-term value, experience and problems they can help navigate or hopefully entirely avoid could be infinitely more valuable to the gamer’s long-term career advancement and justify this expense.
This article was originally posted on The Esports Observer.
This article is not intended as legal advice, as an attorney specializing in the field should be consulted.
© 2022 Justin Jacobson Law, P.C.