For about a decade or so, esports gaming and tournaments are “big business.” According to this media outlet, the “… global eSports market is projected to grow from $1.72 billion in 2023 to $6.75 billion by 2030,” with the North American share being about 30%.

There are many variations, but often, esports tournaments involve organized competition between video game players gathered in large convention hall “arenas” or online (or both). There are often both individual and team events. As just one example, a German company runs a business called “Electronic Sports League” (“ESL”). ESL offers tournaments and sponsors gamer leagues for over 50 different games. One of the most popular games is CS:GO — “Counter Strike: Global Offensive.” The game involves teams of five players competing for tactical control of the game map. At the most recent esports event in Cologne, 15,000 games and enthusiasts attended the tournament in the LANXESS Arena. The net effect of the increased demand is to push the advancement of streaming technologies, rising attendance and streaming viewership of tournaments, increased ticket sales, growth of merchandising, the rise of esports influencers, and ever-increasing opportunities for sponsorships.

This article — provided by the Sponsorship Negotiators at Revision Legal — focuses on esports sponsorship contracts. Esports sponsorships are marketing partnerships by a business brand, which are typically a partnership with an event, an esports player, or an esports team. As such, the sponsorship contracts are divided into two categories:

• Business-to-business sponsorships
• Business-to-individual sponsorships

Contracts for the former tend to be longer and more detailed (which is not too surprising given that a B2B sponsorship will likely involve significant sponsorship fees). For either, parties will need experienced sponsorship attorneys to assist with the negotiation, drafting, and execution of the agreements.

There are some similar features of both types of sponsorship agreements. These include contract provisions related to:

• Use of intellectual property rights, including trademarks, copyrights, image rights, broadcast and streaming rights, internet/social media rights, merchandising rights, licensing rights, and more
• Marketing placement and promotion rights and obligations — such as whether the sponsor can cross-market and display the full line of the sponsor’s product (or only those specifically linked to the esports tournament)
• Exclusivity of various rights granted
• Term and renewal rights
• Termination and default provisions
• Hold harmless and indemnification provisions
• Confidentiality and non-compete provisions
• Representations and warranties

With respect to business-to-player/team sponsorship agreements, some additional provisions are often added, reflecting the nature of the sponsorship. For example, typically, there is a “no-cheating” provision in the contract. This is often contained in a long section called “code of conduct requirements.” Other common provisions to be negotiated include:

• Name, image, and likeness rights
• Exclusivity with the sponsor — can the player/team switch sponsors? can a player switch teams?
• Assignability of the sponsorship — can the sponsor sell/assign the contract to another business?
• Buy out provisions
• Service requirements — mandatory attendance at meetings, practices, required streaming hours, how many tournaments must be attended, etc.
• Mandatory drug testing
• Required participation in marketing such as wearing clothing, patches, use of certain equipment, etc.
• Required media appearances

Contact the Sponsorship Contract Negotiation Attorneys at Revision Legal

For more information, contact the experienced Sponsorship Contract Negotiations Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.