Inside ‘contract hell’: Esports players say predatory contracts run ‘rampant’

Tsang, 22, recalled contract offers flooding his email inbox. But rather than recalling this as some dream scenario, Tsang refers to the proposals as “contract hell.”

The offers — most of them low paying, according to Tsang — sought to lock players into a contract with one team, which would then flip the player to one of the new Overwatch League franchises for a profit. Additionally, many of these offers came with an expiration date. Tsang and his teammates were given just hours to sign, or the offer would be rescinded. Tsang, a former player on Cloud 9′s Overwatch League team, the London Spitfire, described the tactics used by teams to pressure players into signing as “pretty scummy.” Jackrabbit contract offers and other forms of chicanery have not stopped in the years since 2016.

Such tactics pervade the modern esports industry, according to over a dozen current and former players, as well as agents, interviewed by The Washington Post. Many of those interviewed spoke on the condition of anonymity for fear of being blackballed by esports organizations. Even as the esports industry pushes into the mainstream and blossoms into a billion dollar enterprise, replete with organized leagues and big-name sponsors, many esports player contracts are negotiated in a manner resembling the Wild West.

Beyond time-based gimmicks, players and their agents have noted that the default contract used by the overwhelming majority of organizations — which typically contains between 30 and 40 pages of terms — allows players to be traded, even to teams based in foreign countries, without their consent. Language in this widely used template contract, a copy of which was obtained by The Post, also states that players may be terminated at any time, including during a season. While some pros can negotiate for terms that would guarantee their money, the template contract stipulates that termination without cause — only available to the company — would discontinue a player’s salary payments, requiring the company to give either 14 days’ notice or a one-time fee equal to two weeks’ salary. Additionally, teams may substantially lower the player’s pay if they are benched. It also entitles teams to match any outside contract offer, thus obligating the player to re-sign with an org unless that org declines to retain the player at the new salary.

Unlike other major sports leagues like Major League Baseball or the National Football League, no independent player unions nor associations exist within major U.S. esports leagues to collectively negotiate for players’ rights. There has been little done to deter esports organizations from questionable practices around signing and handling players.

Major U.S.-based esports leagues have been reluctant to set guardrails or administer guidance on an array of issues concerning player treatment. Activision Blizzard, which operates the Overwatch League and Call of Duty League, establishes a minimum salary and mandates that teams provide players with health insurance, 401(k) funds, and access to counseling and mental health services. Beyond that, however, the teams are in charge of how they manage their players’ practice time, team-provided housing, compensation and more.

A spokesperson for Riot Games, which operates League of Legends Esports, declined to comment when asked what the company’s leagues require from its teams in terms of player treatment.

Lacking regulation from leagues, some teams have embraced a variety of questionable practices around the signing and handling of players. Beyond contractually guaranteed rights, orgs have been known to use soft power to further the will of organizational ownership.

Ryan Morrison, an attorney working with around 200 clients at his Evolved Talent Agency and law firm, listed a number of instances in which teams used the lure and leverage of a professional contract to produce a desired outcome.

“A player was woken up at 2 a.m. and told to sign a doctor waiver,” Morrison said. “He had hurt his wrist and the doctor he saw told him to rest. The organization told him to either sign the waiver and fire me, or he’s out. I was fired, and the kid played and got injured.”

Athena, 25, a popular “Rocket League” streamer for Team Envy who asked to keep her real name anonymous due to repeated online harassment, said another common practice is for organizations to set themselves up as exclusive agencies for their players and then take substantial percentages of revenue the players bring in through sponsorships and ad deals.

“It’s been a huge issue for years,” Athena said. “With ‘Fortnite,’ these young kids are being completely taken advantage of by these contracts, and it was happening before.”

In 2020, prominent esports organization FaZe Clan settled a lawsuit related to the contract of Turner “Tfue” Tenney, a prominent streamer and “Fortnite” player. The contract with FaZe allowed the organization to take up to 80 percent of the value of deals it sourced for Tenney. FaZe Clan disputed that it ever withheld Tenney’s money according to those percentages.

Hollywood talent agents are paid 10 percent of their clients’ rates on union jobs. Agents can earn higher amounts from a studio for bringing a group of their clients to a project in what is called a packaging fee. NFL agents can earn up to 3 percent of their clients’ compensation.

In the lawsuit, Tenney also claimed that FaZe was operating as an unlicensed talent agency. Indeed, some gaming organizations operate as de facto agencies for their players, raising questions about legality for California-based esports companies, as talent agencies must be licensed by the California legislature.

FaZe Clan declined to comment for this story about any changes they have made to their contracts in the wake of the Tenney settlement.

Some orgs have created licensed talent agencies. A notable example is ICON, a California-licensed talent agency owned by the parent company of prominent esports team TSM FTX. Roughly 38 percent of ICON’s talent are also signed to TSM FTX. ICON Managing Director Damian Skoczylas told The Post that TSM FTX talent are not pressured to sign with ICON.

“We can’t legally do that … it’s a conflict of interest and we keep an arm’s distance from all that,” he said.

ICON does negotiate with TSM FTX on behalf of their clients. Skoczylas said ICON treats negotiations with TSM FTX “as we would with any other third-party entity.”

Additionally, agents told The Post of several instances in which teams have worked to discourage players from using representatives or forcing them to cut ties. Jérôme Coupez, founder and CEO of Prodigy Agency, shared stories of his clients in Europe being pressured to fire him by team ownership.

“With experienced players, it’s not working [to get them to fire their agent], but young players will do it because they don’t want to miss the opportunity,” he said.

Absent an agent or legal representative, players may not fully comprehend what they’re getting themselves into, as contracts sometimes contain unusual stipulations. For example, Tsang mentioned a past contract of his that included team-required meet-and-greets with fans, which he believed lacked adequate security. Morrison said he has reviewed contract proposals that include terms that prohibit players from having romantic relationships or having guests at their shared, team-provided housing. However, such terms aren’t typical, he said.

Players and agents who spoke with The Post also noted that orgs continue to approach minors without parental consent and use high-pressure tactics to get them to sign quickly and without fully examining the terms of the agreement. Morrison said some of his clients have received offers, including from top-tier esports orgs, with deadlines that were as short as four hours. Morrison said this dynamic “happens constantly. It’s rampant.”

Setting a short deadline for players to sign a contract is not illegal, according to multiple legal experts, but it could be used as grounds to deem the contract as having been signed under duress, thereby voiding it. Catherine Fisk, a professor of law at the University of California Berkeley School of Law and faculty director at the Berkeley Center for Law and Work, noted that proving duress in court is challenging, however, and said a potentially stronger argument would be that the employee did not understand what they were signing. She said an employee could also make an argument a contract was “unconscionable,” especially if they had been dissuaded from seeking a lawyer and the terms are heavily weighted toward the company.

Fisk also pointed out that contracts with minors are voidable by the minor until they turn 18.

“The problem is that the kid may not realize the contract is voidable once they discover that the contract is a bad deal for them,” she said.

Though the players and agents say these questionable practices endure, Benjamin Kim, a partner at the law firm Nixon Peabody, has advised esports companies to establish policies and formally comply with applicable laws. Failure to do so, Kim said, could leave the organization susceptible to a costly lawsuit.

“As orgs become bigger and bigger, they have more to lose, ” he said. “They become a bigger target.”

To that end, a number of organizations have begun to set up their own guardrails, formalizing standards around player management both for legal reasons and as a way to distinguish themselves from other esports companies. Some also see such policies as helping to foster a healthier work environment, which helps boost players’ and streamers’ morale so they perform better.

“In growing spaces, people don’t think about what could go wrong, only about what could go right,” said Andrew Cooke, general counsel for U.K.-based esports organization Fnatic. “People want to hype up esports all the time: viewership, fandom; it’s pretty intoxicating. … We’ve found more success [attracting players] talking about safeguarding as far as performance. If your boss cares about what you do, you’re more likely to succeed in your job.”

Cooke said Fnatic is attempting to address a broad spectrum of detrimental behavior aimed at fostering a healthy working environment in general.

“If there are no consequences for bad actions, it’s a continuum and this is how you end up with these toxic boundaries: No one pushes back, and people push a bit harder the next day,” Cooke said.

Asked what Fnatic’s position would be should one of their staff members engage in an abuse incident, Cooke said, “Responsibility lies with the perpetrator. We’re ready to support the complaint.”

Publicly traded companies that are involved in esports, such as Enthusiast Gaming and GameSquare Esports, have long had policies that address harassment.

According to Kyle Bautista, chief operating officer of Complexity Gaming, which was recently acquired by GameSquare Esports and includes Dallas Cowboys owner Jerry Jones as part of its ownership group, their policies include “protecting minors” with “mandatory parental or guardian involvement during the signing process and all official communications, [as well as] routine in-person check-ins with parents and guardians on site and at events, and support for continued education.”

Enthusiast Gaming CEO Adrian Montgomery said that beyond written policies, he feels bullying players is bad for business, ultimately.

“Resentment doesn’t lead to great relationships, and bad relationships are not profitable and not successful,” he said.

Both Tsang, the Overwatch professional, and Athena, the Team Envy streamer, said policies like those of Complexity and Fnatic are a welcome first step.

“Because of how new esports is, I feel like there’s not many orgs that have this type of policy, or at least haven’t voiced it,” Athena said.

Both players said that what they believe is really needed to address the balance of issues, however, is a union.

“A players union can add value to the industry by advocating in good faith in support of pro gamers’ needs. That aligns with our agenda to raise standards in contracting and player welfare in esports,” Tsang said. “It should’ve existed a long time ago, but most players either don’t know what that is or they won’t want to be the one to do this.”

Fisk, the Berkeley law professor, said she sees esports as currently living through what Major League Baseball experienced 80 years ago with “exploitative contracts.”

“Baseball, along with every other pro sport, seems to have done just fine with a union model,” she said. “Players are now recognized as valuable inputs into production, but it took unionization of the players to make that happen.”

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