When an industry goes through an exploding growth in such little time like esports, all the actors involved – especially the players and clubs – soon find themselves facing pressing problems regarding governance and regulation designed specifically to protect their rights and image. We got the chance to talk about these pressing issues with Alberto González Andrades, founding partner of PROESPORTLAW, a new branch of the sports law department of Roca Abogados, a renowned Spanish law firm.
The pressing need for professionalization
“Right now,” says Alberto, “The lack of professionalization of the sector leads to the greatest problems in the workplace and social security, especially at the level of clubs that do not have the support of larger structures behind themselves, such as football clubs or major sponsors.” In countries such as Spain, he explains, the current system makes it very difficult to hire minors or the guarantee for clubs that want a certain staff stability.
It is no secret that, as the industry grows, more and more companies are looking for a way into esports, especially sports organizations that identify the growing interest of millennials in esports. However, the impact of this industry and the benefit and investment it means is not always fully grasped by other more traditional industries, making that forced, uninformed first step into the esports world an extremely dangerous one, both for the prospective company and for the hopes of the professionalization of the sector.
“A little over a year ago,” starts Alberto, “we were working with a Club to create a subdivision of esports within all of their other divisions (soccer, football, basketball, etc.), but the team’s management was reluctant to enter. Present at the meeting were some members of the club, some players and myself. The first question I received from a member of the board after discussing the possibilities was: “But… do these players charge?”. I was in shock.”
“Many managers are quite traditional and do not see that esports generates a benefit to the Club,” adds Alberto, “and in these institutions and at these levels, money is what matters at the end of the day.”
Aside from sports organizations, however, there are more and more companies that decide to invest in the esports sector, some without previous knowledge or experience in this industry.
“This is the recurring problem with companies betting on influencers… Companies don’t know how the system works, their campaign fails and the responsibility for their failure somehow falls on the YouTube.”
Alberto insists on the need for companies to investigate the sector they are looking to invest in. “If you don’t, it will surely go wrong. It is absolutely necessary for proper research to take place, or to hire the right advisors, especially in this ‘strange’ moment in which the industry finds itself.”
Alberto believes that esports is currently at a slightly delicate brand level, one in which teams are increasingly demanding more money for sponsorship and investment, in order to maintain rosters with costs which are inflated by the mere expectation generated by the sector.
Esports labor law: The challenges in protecting the rights of players
According to Alberto, the biggest problems we face in esports today are to do with contracts. “There is a brutal imbalance between Club and player, even more than in traditional sports,” he says, “And the reality is that, to this day, few Clubs would escape from the repercussions of losing a claim given the social impact of their players.”
So what can be done when most of the players don’t have an advanced legal working knowledge of how to protect themselves from unwanted clauses?
After identifying this imbalance, part of PROESPORTLAW’s mission is precise to try to make players understand what kind of clauses they should avoid at all costs in a contract, and what types of clauses can give them that “plus” in the face of an unwanted claim.
Alberto describes the contract negotiation between a club and player as a ‘harmonious dance’. However, they do go out of their way to ensure the pivotal aspects of the contract for their client, such as the player’s image and presence (social media), health in the private life of the player, creation of content and, as far as possible, the preservation of a place in the team.
“Beyond the services we provide,” he goes on, “there should undoubtedly be a union or regulatory body that protects the rights of players. A union would be the logical step to give professionals (both players and staff) a way to continue advancing in the sector and improve these conditions imposed by the Clubs. In the long run, this would eventually stabilize the market in some way.”
“Even though I understand the reasons some clubs in the highest competitions have given regarding a certain ‘bubble’ in salaries,” he adds, “I must recognize that the same defects that I identify in football I see multiplied by much in esports.”
Publishers and integrity: Should there be a separate designated organization?
Companies that develop video games and event organizers, such as Riot Games ESL, or LVP, usually have established rules to ensure the integrity of competitions. The fact that there is no separate, globally designated organization to establish such standards and ensure such integrity in an impartial manner is, according to Alberto, a complex subject.
When you compete in some type of tournament, you voluntarily submit to your own rules that you declare to know, which means that to impose a legal code and unique regulatory organization isn’t as necessary as we might think.
“The point is,” argues Alberto, “however much we talk about it, it will never happen. Riot has its regulations, just like Valve, Blizzard … they have theirs. If you have control of something that belongs to you, you are not going to give it up for good.”
“At the same time, the creation of compulsory arbitration tribunals to which both publishers and teams are subject, is, in my opinion, necessary, especially to avoid arbitrariness in the sanctions against which a certain company is accused.”
Sponsor contracts: Protecting a player’s image
Professional esports players, as in any other sport, inevitably catch the attention of different brands and sponsors, due to the fact that they represent an important advertising and marketing opportunity, and the chance to reach out to the millennial generation in the most effective of ways. We asked Alberto what players and teams should take into account when signing such contracts, and what can be done to protect the rights of the image of players in these cases.
“Given the ‘lungs’ that companies have in comparison to the players,” he says, “I will always recommend that you do not go in to sign sponsorships blinded by “easy money” without first consulting with an expert.”
“Issues of contract periods, payment terms and especially obligations in the generation of content and exploitation of image rights may end up turning a player-brand relationship into an undesired dispute.”
Such disputes are common in esports, a recent one being between Riot Games and Red Bull, which had to back out from sponsoring North America’s Team Solomid and Cloud 9 due to a conflict of interest with the publisher.
Urgent regulation: What needs solving ASAP?
The array of different issues that could potentially ‘burst the bubble’ in esports is undeniable, but some issues are clearly more pressing than others. Alberto insists on the need of focus on labor law, and a solution to issues concerning hiring minors and the challenges behind a contract that favors the Club significantly more than it does the player, especially when we take into account the short-termism of current contracts:
“We are in dire need of a distribution of obligatory awards,” he adds, “or a special system of compensation for contractual resolution, both in favor of the Club and in favor of the player.”