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Volume 21 No. 22
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Esports players have less endorsement freedom

Individual endorsements from players would presumably be part of a full-fledged brand sponsorship strategy in esports, but it’s much harder to get those solo deals done in gaming.

 

Compared to their equivalent in traditional pro sports, esports players have far less freedom to endorse products because game publishers, leagues and teams reserve so many rights for themselves and players aren’t unionized. Furthermore, all esports business is subject to the whims of the game publisher, which owns the game’s intellectual property and creates an extra level of legal authority not present in traditional sports.

“It’s a major point of differentiation from traditional sports, and it’s not because esports owners are greedy, or esports players are stupid, but because of the fundamental way esports operate,” said Bryce Blum, executive vice president of Catalyst Sports & Media and a lawyer who authored an influential template player contract.

Esports stars have limits in their ability to parlay fan interest into endorsement income.
Photo: getty images

With minimal ticketing, concession and local media revenue to work with, Blum said, sponsorships take on a disproportionate importance to esports teams. As a result, teams insist on reserving most rights for themselves, rights that are already limited by leagues and publishers above them.

Players typically sign contracts that allow them only to endorse products in categories in which the team “does not have a sponsor or anticipated sponsor,” Blum said. Even non-conflicting deals are subject to team approval.

Ryan Morrison, an agent who often is negotiating on behalf of gamer clients opposite Blum’s team clients, predicted the talent market will change this dynamic over time. Two years ago, he noted, players would be asked to sign contracts totally banning individual deals.

There are still some organizations that do that, but Morrison thinks they will be hurt in free agency as players get more savvy about their options. Blum said players one day might demand more sponsorship rights, but that would suppress salaries.

For now, there apparently is limited interest in players from sponsors. With few exceptions, individuals don’t command more than five-figure deals, in part because of how few rights they control.

Conversely, though, individuals in esports can offer a brand far more exposure than most traditional athletes because they have so much public time. Esports stars routinely stream their practice sessions with a live audience, and they’re often online for 12 hours a day.

Publisher control is another risk factor that must be considered by sponsors and players looking to sign deals, Morrison said. While an extreme step, game publishers can issue lifetime bans on players for many reasons. That would undercut the value of that players’ brand associations immediately.

For more coverage of the business of esports, visit our partners, esportsobserver.com.