Esports Contract Red Flags: Spotting Dangerous Clauses

Esports players today are professional gamers, and they have to read their contracts carefully before signing.

Esports contracts today are rarely standardized. They can vary widely from team to team, showing the limits of current regulation and oversight. Players need to read each contract on its own terms.

Esports player contracts often include provisions for hefty buyouts, special relocation privileges, and extensive licensing of the player's activities and appearances. Details on exclusivity, streaming rights, revenue splits, termination clauses, and image rights can vary widely, though official resources on these terms remain limited.

Exclusivity, Roster Control, and Buyouts

Modern contracts strongly restrict who can talk to a player once they are under contract. League of Legends' 2020 global rules state that players under contract are generally prohibited from directly approaching other teams without authorization. The player remains on team property even when they are not on an active roster. Players can publicly express their desire to leave—and teams may acknowledge such intentions—but the original team typically retains the right to negotiate a buyout.

The buyout clause in a contract is where the fee a player must pay to terminate before the end date without the team’s participation is spelled out. Esports contracts that do not include a buyout clause leave teams with total discretion to deny any player's wish to leave.

Determining fairness in buyout agreements can be complex without clear guidelines or established standards, as subjective interpretations may leave the definition open to dispute.

Streaming Rights and Revenue Splits

Many young esports stars make much of their money from streaming and sponsorship deals they initiated. Young players are increasingly reliant on personal dev practices for income. Contracts often include clauses explicitly telling players what they're allowed to do with their own body and brand.

Some esports streamers may be paid based on performance metrics, though the exact terms of revenue splits and contractual agreements can vary depending on individual arrangements.

Image Rights That Outlive the Deal

If a player lands a particular shot, produces an improbably good play, or ruins a location by packing the place, she might land a Wired profile. But landing that profile will set off a royalties flanker from the org. Contracts may contain clauses restricting name, likeness or content use after departure.

Official guidance from the relevant governing body should be consulted for the most current and specific recommendations. The exact requirements may vary depending on the circumstances, so it's important to refer to the latest published standards. Following these guidelines ensures compliance with established protocols and best practices.

Housing Tied to Roster Spot

Some contracts may include team housing requirements. The conditions of those housing requirements are often found in the smallest print of the contract. Some players have launched campaigns to improve those conditions.

Team housing policies are determined by the league's official regulations, which outline specific requirements for player accommodations during the season. These rules ensure that housing provided by teams meets certain standards, though the exact details can vary based on individual contracts and team arrangements. Compliance with these guidelines is mandatory for all franchises.

What a Fair Version Looks Like

The safest contracts are the ones that leave players a fair amount of control over their own person, image and next move. Buyouts should be capped, and players should have veto over loans and trades. Build compensation directly into the buyout, write a player draft or trading schedule, and a player housing rider.