Just how terrible can an esports contract get? This federation raised the bar
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Just how terrible can an esports contract get? This federation raised the bar

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"Embarrassing slavery of a contract."

This was the first comment I got from Mariam Mainhardt, Cybersport.com’s administrative manager and qualified lawyer after she read through the contracts sent to all Indian players who are to take part in the local qualifiers for the 2018 Asian Games — a continental sporting event to be held in Indonesia this August.

The contracts were made public on Wednesday, Jun. 6, by CS:GO caster Sudhen “Bleh” Wahengbam, who readily provided the full documents to members of the press. Upon obtaining them, we got a severely one-sided contract with questionable clauses every step of the way. The contract requires a lot from players but gives nothing back; it violates basic principles regarding distribution of personal data, IP rights and media rights; and it lacks basic legal formatting requirements (such as a 'Definitions' section, as well as the parties' requisites) for such a binding document.

“I think it wasn’t even done by a lawyer, at least not a good one,” Mrs. Mainhardt told me, days before a different lawyer independently said the same thing to ESPN’s Jacob Wolf.

Just how bad is this contract by the Esports Federation of India (ESFI)? And why was it drafted like this in the first place? Mainhardt sat down with me to explain.

Everything for the federation, nothing for the players


What good is a national federation that doesn’t care for the well-being of its athletes? It’s a good question that Indian players are likely asking themselves now. In short, the contract drafted by ESFI for the Asian Games qualifiers requests that everything is covered by the participants, with the federation taking zero responsibility — financial or otherwise.

The contract recognizes that expenses at the main event will be covered by the Asian Esports Federation (AESF), but beyond that, the players are on their own. There is no travel support. There is no medical insurance support.

Nothing.  

7.a. — ESFI shall not provide or bear any travel or other related expenses for any team / player either for NESC or for the Asian Games.

7.c. — Winning Team and or Player going for the Asian Games will have to get the overseas Travel and Medical Insurance.

9.b. — If the participant to NESC or Winning Player or any member of the Winning team of the NESC is below 18 years, he or she has to be accompanied by his / her Parent or Guardian to travel to the Asian Games or related events as the case may be at their own expense. None of the expenses for the accompanying parent / guardian will be borne by ESFI.

9.c. — The Winning Team / Players of the NESC shall be responsible for applying for the Visa in a timely manner and the ESFI or its office bearers/directors shall not be responsible in any manner for the failure of the Winning Team / Players to arrange for their or the respective parent / legal guardian's visa.

“Scandalous,” Mrs. Mainhardt said. “They say that in case а team qualifies for the Asian Games, costs such as travel and accommodation will be covered by AESF. Which is fair, but ESFI’s role in supporting Team India is zero. Between different clauses, you can read that the team themselves shall cover costs for their medical insurance, food, internal transportation. Same applies to visa requirements. The national federation cannot even cover player visa costs? While these guys will be representing India?”

Just to be absolutely certain that they won’t have to pay a cent, ESFI revisit this further down the document, and they make sure they are as vague as possible. 

16.xxxiv — ESFI shall in no circumstances be responsible for paying any amount to the Participants and or Winners and or their Parents / legal guardians / representatives including but not limited towards the costs of travel, etc, in respect to the NESC and or the Asian Games or otherwise. All such and related cost and expenses shall be borne by the participants and or the Winner(s) and or their Parents / legal guardians / representatives. Any unexpected costs due to any unforeseen changed circumstances shall also be borne by the participants and or the Winner(s) and or their Parents / legal guardians / representatives.

The Asian Games mascots welcome you to a world of legal hell. Image by: Asian Games
The Asian Games mascots welcome you to a world of legal hell. Image by: Asian Games

Free IP rights — that players pay for


Even if ESFI's blatant disregard for the financial situation of its players is already bad practice, one could technically understand that part. It’s more than likely that the federation doesn’t have the necessary funds to pay for the associated expenses on a local level — though what other purposes it might actually serve as a federation remains a poor mystery. Where ESFI start to go overboard is when it comes to the media, IP and privacy rights of the players.

There is no travel support. There is no medical insurance support. Nothing.

You will find similar clauses in many contracts between a player/team and a tournament/league. The tournament/league will often require the participants to hand over the rights for the competition in question to distribute and market participants’ likenesses — think photoshoots and other images of the players; video and audio footage; promotions and interviews, etc. Tournament organizers need this so they can build ad campaigns and hype up their event, but ESFI have no intention of making it that simple.

In the spirit of the previous chapter discussed, ESFI are summoning all players to pay for the photoshoots and other similar activities themselves, while they also require that any materials produced during those activities are granted for free to the Federation.

In short, not only will players not see a dime from ESFI from this exposure — they will pay for it out of pocket and then fully abandon all their rights to said exposure.

16.viii — Participant(s) and Winner(s) will make themselves available for any photoshoots, video recordings, promotions etc for sponsors and or ESFI, at their own cost, as and when asked by ESFI. The Participant(s) and Winner(s) hereby waive all rights and grant to ESFI or its Affiliates a royalty-free, exclusive, irrevocable perpetual worldwide license to copy, modify and otherwise use and distribute such content and, or, any such element, in any and all media and in any publication whether online, offline or on the Internet. ESFI shall also be free to use any such elements and or content or materials for any purpose including and not limiting to commercial exploitation. ESFI will be the sole owner of such content and or elements.

16.xvi — The Participants hereby waive all rights and grant to ESFI or its Affiliates a royalty-free, exclusive, irrevocable, perpetual worldwide license to copy, modify and otherwise use and distribute their submission entry and, or, GamePlays and, or, any element of the submission, in any and all media and in any publication whether online, offline or on the Internet. ESFI shall also be free to use any ideas, concepts, know-how or techniques contained in such submissions or materials for any purpose including and not limiting to commercial exploitation.

16.xvii — The participant(s) hereby grants to ESFI a royalty-free, exclusive, perpetual worldwide license to copy, modify and otherwise use and distribute including any copyright in the applications developed including and not limiting to the GamePlays by the participant(s) and, or, submissions, feedback, material. ESFI or its Affiliates shall have sole and exclusive right to commercially exploit the same.

16.xx — Participant(s) understand and agree that ESFI or its Affiliates or its appointed third party agencies shall be entitled to use, in any manner, the name, gamertags, photographs and any other details of mine, likeness and status in any publication including the Benefits awarded to them, if any.

As a cruel reminder, clause 16.xxxiv once again states that ESFI doesn’t owe players anything.

When it comes to clause 16.viii, Mainhardt tolerates the possibility that it could just be bad phrasing and that ESFI means to be less harmful and demanding. Even then, the bad phrasing represents an ajar door to possibly outrageous demands.

“This statement can be defined in two ways,” Mainhardt explained. “One is that players must indeed pay for photoshoots. The second is that participants must come to such an event organized by the federation but, for example, they have to pay for the bus in order to get there. I assume the organizers had in mind the second scenario, but because of poor English and drafting, anybody can say — in fact, they do demand — that players have to pay for photoshoots.”

Not only will players not see a dime from ESFI from this exposure — they will pay for it out of pocket and then fully abandon all their rights to said exposure.

Where there’s no room for debate is clauses 16.xvi and 16.xvii, referring to participants’ IP rights and the products developed at said photoshoots. Here, the word “slave” reared its head once again in Mainhardt’s review:

“The player is once again expected to be a slave. Words like “waive all rights”, “irrevocable”, and so on, mean that if I, again on my way and with the desire to become a star, give the federation the right to use my face and name, they can do that as long as they want. I am in no right to take this consent back or request some interest rate from the income they get using my face.

"This is a very heavy provision and in violation of many regulations and practices. My concern about the use of my personal data like my name, face, etc., is my integral right. You cannot be selling my name for the rest of my life, making money from that and not paying me any royalty. The federation is truly misusing their dominant position on the market. If such a contract shall be signed, and a player would ever like to object it, he/she will have to go through very long battles with lawyers and courts. I strongly believe he/she will succeed but the efforts spent to put the federation in their place will be enormous.”

Imagine being Faker one day, with all your likeness rights belonging to someone else — royalty-free. Photo by: Riot Games
Imagine being Faker one day, with all your likeness rights belonging to someone else — royalty-free. Photo by: Riot Games

Mainhardt mentions “privacy data” in her legal review and be sure there’s a clause in that contract for that too. And once again, it requires players to just give everything to ESFI to do as they please. Clause 16.xxxix, for example, reads that:

The Participant(s) expressly agree to waive any privacy or data protection rights of their personal data provided to ESFI and provide consent to ESFI to use their personal data in any manner permitted under the applicable law as deemed fit by ESFI in its sole discretion.

While the clause specifies “applicable law”, meaning ESFI cannot do anything illegal with the provided privacy information, this is still against established worldwide practices, Mainhardt said.

“This contradicts many international standards on data protection. The data protection rights cannot be waived. They are there for any person. In Europe, it is prohibited to have such statements and recruitments from anyone because it is not a company or organization who have the right to control such data. It is sole and sacred right of the person themselves to decide with whom to share their data, in which amount, and for what purpose.”

Cybersport.com has reached out to practitioners of Indian law for comment on this.

Yes, the Asian Games are a big deal in that part of the world. Photo by: Yoshiharu10 / CC BY-SA 4.0
Yes, the Asian Games are a big deal in that part of the world. Photo by: Yoshiharu10 / CC BY-SA 4.0 En.wikipedia.org

The most demanding qualifier ever


Once ESFI have secured all IP and privacy rights for free, have absolved themselves of all responsibility (financial or otherwise), and have made sure players never say a bad word about them — yes, there’s a clause for that too — they have gone on to design the qualifier with the most outrageous rules yet. Rules, where, in certain conditions, a participant can actually be sued.

For example, if you have to withdraw, for any reason imaginable.

16.xxi — After being confirmed for the Asian Games, winner(s) will not withdraw from the Asian Games for what so ever reasons (whether foreseen or unforeseen). If the winner(s) withdraw from the Asian Games or fail to appear for the Asian Games for what so ever reasons (whether foreseen or unforeseen), winner(s) shall be fully responsible for the ensuing costs / damages / expenses to ESFI. The winner(s) will remit such costs / losses within 15 days from being informed on the losses, if the winner(s) fail to do so, ESFI is free to take any legal recourse as deemed fit. The winner(s) also acknowledge that their withdrawal may cause reputational damage to ESFI and shall be liable to pay damages along with the other damages envisaged above.

If it sounds ridiculous, that’s because it is. Not only do ESFI require participants to pay for a basic withdrawal from a tournament, which is “a basic human right of people’s freedom of movement,” as Mainhardt explained, but they don’t even specify how much.

How is a contract fair or rational when sexual and racial harassment is treated with a lighter hand than simple withdrawal?

“The requirement to compensate the loss is not proportionate,” Mainhardt said. “In order for someone to compensate a loss to another person, the second party must provide what losses they actually incurred. Apart from this, withdrawal from any activity or event is the sole discretion of the person and cannot be limited by any contract.”

Worse yet is where such punishment stands compared to other harmful activities a player could carry out. How is a contract fair or rational when sexual and racial harassment is treated with a lighter hand than simple withdrawal?

11 — Any form of abuse, bullying, hooting, harassment including and not limiting to Sexual, Verbal, discrimination on the basis of sex, caste, race or religion will be taken with utmost seriousness and ESFI may disqualify / impose penalties in accordance with Penalty Clause below and or take appropriate actions including and not limiting to legal actions as per the law.

In the aforementioned Penalty Clause, the harshest punishment one can get is being blacklisted from ESFI tournaments which, given the state of their contracts, seems like an actual positive.

Thankfully, due to the poor structure of the contract, players have a way out of the tournament that won’t get them sued. If a team forfeits or throws a series, they could get disqualified, as per clause 10.c, reading:

Throwing a match, halting play without cause, or showing a flagrant lack of effort will be construed as a violation of player conduct, and will result in match penalties, forfeiture and disqualification from the Tournament.

We have reached out to ESFI for comment on how they’ll arbitrate the difference between withdrawal and forfeiture — a rather important distinction, given one involves a lawsuit and the other one a harmless DQ.

The tournament set-up gets worse yet, as the contract does not obligate ESFI to communicate any information to the participants, the latter of whom are responsible for staying informed and updated by themselves, as per clause 16.iv.

ESFI are not even obligated to inform players of any changes to these regulations, terms and conditions. In fact, they both absolve themselves from any liability and specify that such changes might not even be listed properly. In short, there could be a change to the detriment of the players without the players ever knowing about it, even though the players are requested to somehow stay informed about such developments.

Joseph Heller would be proud. 

16.xlii — In addition to these Regulations, Terms and Conditions, other specific terms may be imposed by ESFI at any time to deal with any unforeseen situation. ESFI also reserves the absolute right to change / amend / update the Regulations, Terms and Conditions contained herein and, or, any other rules and regulations in respect of the Tournament at any time without any notice, without assigning any reason and without any liability whatsoever. Participants are requested to refer to such other terms and conditions, if any, which may be displayed on-line or intimated separately as ESFI considers fit. However, no obligation whatsoever is cast on ESFI to separately intimate each individual Participant with regard to such additional terms and conditions / changes / updates.

One would think that after so many commitments from players, ESFI will at least provide some security that the undertaking will run smoothly, as it is ESFI’s literal sole responsibility, but there’s a clause in there saying no to that, too. A player could’ve paid for visas, transport, accommodation, time off work, and photoshoots and have all that for nothing, should ESFI decide to pull the plug. And to follow the theme of the entire contract — the players can’t even dare dream of compensation or holding ESFI accountable. 

16.xliii — ESFI, at its sole discretion reserves the right to withdraw or discontinue with the Tournament or from the Asian Games at any stage without any prior notice and without any liability whatsoever to the Participant and, or, anyone. Participant(s) indemnify ESFI including and not limiting to its Directors, employees, staff, admins, affiliates etc from all sort of claims / damages what so ever with respect to such claims or disputes / withdrawal.

How is that even allowed?


How is such contract allowed to fly in the first place? According to Mainhardt, in legal terms, ESFI are taking advantage of their “dominant position on the market”, or DPM.

In essence, when a company has DPM, it means they rule the roost as the clients don’t have any other option. In a small village, an example of DPM would be the sole supermarket, which can price goods as they see fit until a competitor comes around. In this particular case, ESFI are exacting their DPM as they are the only ones responsible for sending Indian players to the Asian Games. If you are an Indian League of Legends player that wants to go to Jakarta, you have to go through ESFI and sign these contracts.

This is far from the first case of a DPM tour de force in esports, although it could very likely be the most severe and one-sided. Questionable clauses have been found in Overwatch League and LCS contracts pertaining to players’ behavior requirements and IP rights and it again stems from the respective tournaments’ position in the scene. If you’re an aspiring OW pro, you have to sign the OWL documents. Where are you going to go otherwise?

***

Since the contracts were made public, and with the community commenting on the issues, ESFI have stated that they will take such comments into consideration. Cybersport.com has also made contact with ESFI director Lokesh Suji and is awaiting comment on many of the issues discussed from Suji’s legal team.

With ESFI making promises that feedback will be heeded, the story is still developing. 

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