2 March 2015 - 20:26

Legal analyst: MYM player contract vulnerable to challenge in German court

Meet Your Makers surely never intended to become the center of a debate over player rights in esports
Dot Esports
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Meet Your Makers surely never intended to become the center of a debate over player rights in esports. The European organization triumphantly announced its return to the League Championship Series in December, picking up the league's third-place finishers from the previous season, Supa Hot Crew.

But in January, hints of trouble began to filter into the professional scene. The team's mid laner, Marcin "Kori" Wolski, missed the first week of the LCS for reasons that seemed mysterious at the time. And while his replacement sat in, it was widely reported that Wolski had left Europe, flying to North America where he planned to join challenger side Roar. Then, two weeks later, Wolski was back in the lineup, apologizing for his "selfish behavior." What had happened?

Not surprisingly, Meet Your Makers hasn't had an easy time finding replacements.

As the Daily Dot later reported, Wolski had left in part because of a dispute over late payments. And he didn't return to the team of his own initiative. In a recording of a phone conversation obtained by the Daily Dot, the team's then manager Sebastian “Falli” Rotterdam can be heard threatening Wolski with taking his mother's house. Wolski was only 17 at the time of signing with Meet Your Makers, and his mother had signed the contract with the organization on his behalf.

As soon as this was made public, Meet Your Makers immediately became a focal point of anger from the League of Legends community. Riot Games permanently banned Rotterdam from any League Championship Series involvement, and Meet Your Makers fired him—even as it was itself fined $5,000 by Riot. The team's CEO, Khaled Naim, later issued a public apology on Facebook saying “we’ve always trusted our managers to do what’s best for the players.”

Following the negative publicity, several of the team's players made it clear they wanted to leave. Wolski has been weighing up his options elsewhere, even as he continues to honor his contract with the team. Veteran top-laner Mimer "Mimer" Ahlström stood down to take a “coaching role” until the end of the season. And the team's star Korean jungler Cho “H0R0” Jae-hwan is also looking to leave as the team continues to put up the dismal performances that have seen them only win two games in 12.

Not surprisingly, Meet Your Makers hasn't had an easy time finding replacements.

In other words, you're only making a reasonable salary when you're starting.

Since the problems started, the team has explored several potential transfers, even reaching the point of contract negotiations. One player involved in the negotiations, who declined the Meet Your Makers offer, was so concerned about the contract that he sent it to the Daily Dot. And after just a cursory glance at the contract, it was no surprise why.

Meet Your Makers is registered as a business in Germany, so we contacted a German lawyer to lay out what was troubling about it from a deeper legal perspective.

Anna B. Baumann is a German law graduate and a PhD researcher and lecturer. She has recently become involved with the League of Legends scene of late out of concern for player welfare and, in particular, the nature of the scene's player contracts. After looking at the contract, she provided the Daily Dot with an annotated list of her concerns, which we've reproduced below. (Baumann emphasizes that her legal assessment here focuses on broad, general issues, and should not be taken as legal advice.)

Fundamentally, Baumann said, the contract seemed muddled—an awkward combination of a marketing contract and an employment contract, the two of which are typically kept separate under German law.

“Depending on whether you play in a team or alone, you have an employment contract due to being bound by directives or you have a contract of service because you are an independent worker.

The contract at hand is a mixed one. The title says 'Marketing agreement.' However, the player not only assigns his personal rights for marketing purpose to Meet Your Makers, he also agrees to participate regularly in training sessions and the LCS. I would qualify this part as an employment contract. The player being bound by directives and participating in training and competitions is rather an employment element and not only a marketing activity.

The contract says explicitly that German law is applicable. Due to the strange nature of this mixed contract my guess would be that this was originally an English marketing contract that was translated into German.”



As such, Baumann doesn't see it standing much ground in court.

“If this kind of contract goes to court for whatever reason, the player always would argue that it is an employment contract” she clarified. “The organization would argue that it is solely a marketing contract."

Here are the key clauses she highlighted. (You can view the full contract here.)


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Anonymous

“This has already been criticized in other contracts. It can affect a player’s career if an organization can use his personal rights forever as they wish. However, there is nothing in law that prevents you including this type of clause, it is just something players need to be mindful of when entering into these agreements.”

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Anonymous

“This is quite shocking to me as the amount of compensation for assigning his personal rights to MYM in order to get promoted is very low: Only €350 a month. In addition, It even gets reduced when either the player is sick or on vacation.

From an employment law viewpoint you would argue that this is part of the compensation for participating in training, competitions and activities connected to your work for the team. Then this amount is in conflict with German laws regarding minimum wage. This paragraph would be void and the player would get at least the minimum wage in court. Moreover, you could not reduce it when the player is sick or on vacation as that is also against those same laws.

Looking at it from a marketing side, this is only connected to the assignment of personal rights. It makes sense not to pay it when the player is sick because he cannot fulfil his obligations connected to marketing activities. It is strange, however, to speak of “vacation” in this context. This implicates strongly an employment relationship between MYM and the player.”

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Anonymous

“This clause can be argued as valid from an employment viewpoint. You could argue this is a contribution to the team. Still, the amount of 20 percent would be viewed as very high.

The marketing aspect is a lot more interesting. Clauses like this are viewed critically in German courts if the player doesn’t get anything in return. Here it seems that MYM does not contribute to his streaming revenue and yet wants to have a piece of that particular pie. The paragraph states that their share of miscellaneous revenue and the prize money compensate MYM for their services, yet it remains unclear what kind of services they perform connected to things such as stream revenue.

Clauses like this are viewed critically in German courts if the player doesn’t get anything in return.   

If the player stream is disconnected from his activity for MYM, I would say that this clause is void in relation to any streaming revenue. If the organization provides the infrastructure and organizes the revenue, (which some teams do, TSM being an example), then a clause like this is probably legal.

Still, the amount of 20 percent would be very high and if I was acting in a legal capacity I would push to get that reduced.”

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Anonymous

“Looking at these last two clauses holistically you can see that the player only gets the compensation for playing in the LCS when he is part of the starting roster or brought in as a substitute (§ 2 No. 4). If he gets demoted to 'reserve player' (§2 No. 3) he doesn’t receive anything at all. This becomes particularly problematic if this contact wants to be an employment agreement. I would argue that this is part of the wage since his work activity is to train, play in scrims as well as in competitions. It would again be against minimum wage laws if the player doesn’t get anything as a reserve player. As a 'reserve player,' he continues to work for MYM, is bound by their directives, and still has assigned his personal rights. Removing any compensation 'because of his performance or conduct or has not been designated for the competition because of his performance or conduct' cannot be justified."

For context, Riot pays the players approximately €10,000 per split, or about €20,000 a year. And while that's more than a German worker would make at a 40 hour job paying minimum wage (about €17,000), Baumann points out that this pay is not guaranteed. "To me it seems more like a bonus payment you get in case you are in the roster for the LCS. I think although in some months [a player] may not have a problem with minimum wage, as a player who's not on the official LCS roster, you do not get these bonus payments." And as a result, in those situations you earn far less than minimum wage. In other words, you're only making a reasonable salary when you're starting.

"It could be hard to convince a court of the view that the payments are only part of a marketing agreement,” Baumann adds.

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Anonymous

“Here you can argue that this is a general clause regarding employment and marketing elements. Even then this sum would never be seen as proportionate to what the player gets in return from this contract, individual sponsorships notwithstanding. A court would most likely decide to reduce the amount.

Moreover, this clause is very disadvantageous for the player. The violation is assumed and the burden of proof rests with the player. This clause can be used to put a lot of pressure on the player. I would not recommend a player to accept this burden of proof on him under any circumstances.”

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Anonymous

“Short term sports contracts can exclude the right to terminate. However, this leaves no room for the player to go to another organization. The right to terminate extraordinarily without notice remains intact, otherwise this clause would be void as well. I would recommend to have a clause which allows the player to leave early for a fix sum, sometimes commonly referred to as a 'buy-out,' or something similar so that he can react in a flexible way to career opportunities.'

After dissecting the contract, Baumann found little that catered to the players welfare in a meaningful way. “This contract does not provide safety for the player and in the worst case scenario, as a reserve player, they do not get anything for living and training with the team.”

To remove many of the issues with the contract, she outlined four simple points. And she emphasized that, in its current form, it would remain not only problematic from an ethical standpoint but also susceptible to challenge from a legal standpoint also.

Here's how she would amend it:

  1. "For the sake of legal certainty and predictability of outcome before court, split this single contract into two: One on marketing and the other on employment."
  2. "For the employment contract you need to get at least a minimum wage for the player’s work. Add the LCS stipend as premium for being in the starting roster."
  3. "For the marketing contract, you could keep the €350 in the marketing contract if it is an unknown newcomer with average potential. I would always go for more here if acting as a player’s lawyer based on what the contract asks players to do."
  4. "Get rid of the €2,000 penalty and lower it to a proportionate amount (employment contract 500 Euro/marketing contract €200). Add penalties for the agent/employer as well.”

Baumann was honestly shocked at the content. But as someone with a long history in esports, I wasn’t. I've seen many like them. Regardless, many organisations still profess to put player welfare first—when, in reality, the only people who should be trusted to ensure a player's welfare are the players themselves.

Photo via Riot Games/Flickr

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