Sign up for a daily newsletter defining what matters in business and markets

Stories

The next big esports battleground: player contracts

Faze Clan
Photo: Press Focus/MB Media via Getty Images

A lawsuit from esports star Turner "Tfue" Tenney against the Faze Clan — alleging the organization takes 80% of his sponsorship revenue — has put a spotlight on how contracts in the industry are structured.

Why it matters: Tenny's situation could become a benchmark for the industry.

How it works: It's common for esports teams to bring in sponsors for individual players, take a percentage and block players from working with other competing sponsors.

  • Imagine LeBron James paying the Lakers a percentage of every Nike check and being blocked from making that money up elsewhere. That's why players are fighting it.

Reality check: The industry is projected to make $460 million in sponsorships and advertising in 2019. Most esports teams make a majority of their money from sponsorships and they're going to fight hard to keep it that way until they find new revenue streams.

What's next: We've already seen some unionization efforts around the industry with CounterStrike and the Overwatch league. Expect to see more as this battle plays out.

Go deeper: Industry veterans fear an esports bubble

Esports