Four professional VALORANT players and their coach have filed separate cases against the XSET organization in the state of California, seeking an order that would compel the organization to arbitrate disputes regarding owed proceeds from the Champions 2022 skin bundle.
Zachary “zekken” Patrone, Matthew “Cryocells” Panganiba, Jordan “AYRIN” He, Rory “dephh” Jackson, and former coach Don “SyykoNT” Muir have all filed separate cases with the Los Angeles County Superior Court of California, alleging that XSET has gone back on its promise to pay the team members an agreed 50 percent of merchandising revenue, which includes XSET’s share of the Champions 2022 bundle revenue. Each case was filed on Aug. 16, 2023.
According to the court documents, XSET has refused to pay any of the former team members their share of the digital items revenue. The documents also claim that XSET ignored “a letter requesting good faith negotiations” sent back in April of this year, leading to the arbitration process.
The agreements between XSET and the team members explicitly detail the agreed-upon skin revenue split: “XSET will share in-game skin [microtransaction] revenue with the team in a 50/50 rev share. Each Player/Coach will receive 8.33 percent of all skin revenue sales.” An addendum added in August 2022 also details XSET agreeing to pay 50 percent of proceeds from in-game digital item sales to the five players and coach of the VALORANT roster at the time, which includes all five plaintiffs and Brendan “BcJ” Jensen.
The suits allege that XSET is refusing to honor the terms of its own arbitration agreement by rejecting an issue from Judicial Arbitration and Mediation Services (JAMS) to pay the $2,000 non-refundable filling fee, under the JAMS “Policy on Employment Arbitration Minimum Standards of Procedural Fairness.”
The suits specifically cite this part of the arbitration section of the contracts, or “Gamer Agreements,” signed by XSET and the former VALORANT team members: “XSET shall be responsible for all fees associated with the arbitrator’s fee, including associated travel expenses of the arbitrator, the rental of a room to hold the arbitration hearing and similar costs.”
A legal representative for XSET claims in the case documents that “this agreement covers the ‘arbitrator’s fee’, not the costs of the arbitration.”
The plaintiffs are seeking a court order compelling XSET to arbitrate the dispute over the owed revenue shares and for XSET to pay all administrative fees and costs of the suits.
Update Aug. 29, 7:05pm CT: XSET has sent Dot Esports a statement in response to this article, in which the org stated that contract disputes are a “sad reality.” The org noted its disagreement with the complaints filed by the plaintiffs, and declared its willingness to prove that “the contracts were not amended.”
XSET’s full statement is as follows:
“Unfortunately, no one reached out to us for a comment before publishing an article. Esports has faced significant challenges during the last year, and continues to find its footing as an integral part of the world sports scene.
“XSET has constantly sought to be a voice for change and growth in the space. It is a sad reality that contract disputes are part of professional sports. Needless to say, we totally disagree with what was written in the complaint, and we look forward to proving that the contracts were not amended, as is now claimed.
“At XSET, we get up every day and work hard to support our players as they pursue their dreams in gaming. Every penny generated by XSET in esports has been reinvested back into gamers and into the future of esports, and we look forward to continuing to help them generate the money they deserve for their grind. Despite any bumps in the road along the way, we are as excited as ever about gaming’s continued evolution.”