Djokovic wins Wimbledon and receives a cheque for £2.25m. Molinari wins The Open and takes home £1.4m. The Red Bull OG team win The International 2018 and pocket $11m. Unfortunately, anyone already in full-time employment is likely to be past the psychological point of throwing it all up in the air to master the online video game Dota 2. The online fantasy and action gaming world clearly eclipses those who just want to be good at EA Sports’ FIFA game (2018 prize pool being a paltry $400,000) and there are few club competitions where the level of reward is so high.
As a result, teams are springing up all over the world to play any number of games where leagues and championships are organised, be it Fortnite, Call of Duty or Clash Royale. Untold numbers of Gen X parents might well tear their hair out at the time their children spend on screens, but follow this through and within decades, for every real world major competitive game there will almost certainly be an online equivalent. The potential sales of the online games as a result of such exposure will mean that the prize money available will be, by any standards, eye-watering. It’s not traditional pension planning, but if you can get your children gaming early, you could be in for a great retirement.
Legal interaction with eSports is as important as in the non-digital world – after all, we are still talking about humans and their careers. Considerable overlaps exist with traditional sports – player contracts, competition rules, betting and integrity issues (yes, match fixing and doping affects the online game too), but there are also issues specific to e-sports which need careful handling:
- From the outset, should a player be an employee or a contractor, and at which point do the IR35 rules bring HMRC into play?
- Will that person play under the club name or something else? How will branding and wider reputation management be handled?
- Inevitably, what is the payment structure? Some combination of salary and benefits is a given, but if the club’s team did in fact win that elusive $11m, how would that be shared out?
- Player obligations – to training, appearances, club branding, extensions such as apparel collections, online presence and messaging?
- Social media – as players exploit their online profile, how much influence/control should the club have over their personal channels?
- Non-club related activities – are players allowed to work on other projects and have personal endorsements? To what extent should the club share in revenues if the player profile is due (in whole or part) to their player contract
- What sort of programme will the club provide? Team accommodation, training facilities and regime, competition entries, personal and team appraisals, dietary and physical health advice, as well as psychological and mental health support?
- How will their performance be judged – what targets must they meet, and how will their general conduct be assessed?
- How about post-term restrictive covenants should they wish to move to another club? What’s the e-athlete equivalent of “gardening leave”?
All of the above ignores the club obligations which run alongside: team administration, competition and league entry fees and broadcast rights to name a few. In case you were wondering what a team cost base might look like, just the team entry fee for the North American League of Legends Championship Series (LCS) is in the region of $10m!
If you want a real-life example of the way in which online gaming can shape a career as well as show the development of an industry, you could do better than start with the story of “Nadeshot” (real name Matt Haag) and his 100 Thieves team. Entertainment precedent indicates that what happens in the US invariably works its way over the Atlantic. The scale of existing UK gaming infrastructure, its estimated annual revenues of £2.5bn combined with a well-developed player base and commercial interest – after all, it even has its own BAFTA awards night – shows how online gaming as a sport really has become part of the furniture.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.