Miscellaneous, North America

Playing the game: an insider’s take on esports representation

Ryan Morrison, a New York-based lawyer described as the ‘go-to’ esports agent, shares his views on the current state of the competitive video gaming business.

by Michael Long
Playing the game: an insider’s take on esports representation

Ask ten people in the business of esports for their assessment of where the sector is at today and there’s a good chance they’ll all paint a similar picture. Esports, so many would attest, is a modern-day Wild West, a widely misunderstood yet commercially untapped world populated by money-driven gunslingers, cowboy land-grabbers and kills-obsessed bounty hunters.

This portrayal is predicated on the commonly held notion that esports - a catch-all term for a complex competitive video gaming ecosystem that has crept increasingly into the sports industry lexicon - is sport’s newest frontier, one which operates according to its own code but has yet to be fully codified.

To outsiders, esports lurks in the shadows like some unwieldy, ill-defined beast. Many in the mainstream are aware of its existence, that it is comprised of live events that sell out in seconds and wildly popular online games such as League of Legends, Counter-Strike: Global Offensive [CS:GO], and Dota 2 - all of which are played and followed by a burgeoning fanbase of young, engaged and impressionable digital natives. 

Many in sport acknowledge that esports is the next big thing, intrigued by what lies within. And yet there remains considerable unease around the sector, largely because the world of gaming still has no single global series or tour, no universally recognised governing body, no standardised regulations or doping controls and, for now at least, no revenue sharing among competing entities. 

Still, as those in traditional sport are starting to realise, esports is an unexploited commodity, one that has exploded on a potent combination of passionate fandom and a relative lack of oversight. To many, it is a world of opportunity, a place where video game publishers, event organisers, team owners, sponsors, broadcasters and players all clamour for influence, compelled by the promise of a hefty nugget in what is essentially a new age gold rush. 

Hence the Wild West characterisation.

Yet, for pro gamers in particular, such a situation spells trouble. The natural order of things dictates that video game publishers, the multinational companies who make the most popular titles and control much of the intellectual property (IP) in the gaming sector, wield considerable power in esports. Those firms have tended to call the shots, leaving the prospectors - the event promoters and venue operators, team owners and media distributors - further down the pecking order and players languishing somewhere near the bottom of the food chain.

“The big problem is we’re dealing with a player base who just doesn’t, for lack of a professional term, give a shit,” says Ryan Morrison, a New York-based lawyer who has been described as the ‘go-to’ esports agent. “They don’t argue for their contracts properly, they don’t ask for more in their contracts, they don’t ask for what they’re supposed be given.

“Though it’s not all of them, that stereotype holds true a little bit where most professional gamers are not very socially aware, or they’re not very powerful people outside of a video game. That translates very clearly into the power grab in esports.”

“Not quite there yet”

If the esports industry is generally accepted to be big business, exactly how big it is, or how big it will become in future, remains unclear. Statistics and growth projections abound and are open to conjecture but, suffice to say, the industry is global and growing. According to SuperData Research, esports generated an estimated US$892 million in revenues in 2016, a figure that is forecast to rise drastically in the coming years, while Newzoo, currently the esports market research company of record, estimates that 285 million people worldwide watched esports last year.

For the best pro gamers, those figures translate into the potential to earn a lot of money, even if they still find themselves at the lower end of the esports hierarchy. Morrison says the top players represented by his firm, Morrison Lee, can make anything from US$200,000 a year up to US$2 million in salary and bonuses. But with little oversight, their income is far from guaranteed. Players who have been able to make big bucks from competing alone remain few and far between, while there have been several cases where teams have been fined for failing to pay tournament winnings or provide legally binding contracts to their employees.

“There are renegotiations so often that it would blow your mind,” insists Morrison (left), who goes by the ‘Video Game Attorney’ online. “If a team’s doing worse, the owner wants to renegotiate; if a team’s great, the player wants to. And the contracts, unfortunately, still don’t mean a whole lot in esports.

“There has never been a contract enforced through a lawsuit. That kind of stuff is going to happen but we’re not quite there yet.”

As the esports industry continues to mature and professionalise, efforts are being made to bring structure and order to the melee. Central to that effort - besides the creation of new competitions like Activision Blizzard’s Overwatch League, which will employ a more traditional, city-based franchise model when it launches later this year - is a growing movement towards giving pro gamers a more prominent voice in important decisions.

In recent months, for example, talk of establishing a players’ union has surfaced with the aim of ensuring elected representatives are installed to negotiate better playing conditions and fight for fair compensation, as is the case in many traditional sports.

The World eSports Association (WESA), for example - a governing body which focuses solely on CS:GO competitors organised by ESL, said to be the world's largest esports company - was founded in May of last year. It claims to be the first esports organisation to feature a player council, the elected members of which are tasked with advocating for player interests when it comes to decision-making matters such as league policies, rules and team-to-team transfers.

Meanwhile Riot Games, one of the world’s leading video game publishers, has released details of its plans to franchise its North American League of Legends Championship Series (NA LCS). That league will introduce measures designed to bring about greater financial stability and investment certainty, including permanent members that are “stable, professional, well-funded and committed to creating a rewarding environment for the pro players that work for them”, and improved revenue sharing among teams and players. The league, for example, will offer an increased minimum player salary of US$75,000, which will be guaranteed through their contracts, as well as a cut of performance-related bonuses.

Like the WESA, Riot has set about creating a Players’ Association to represent gamers’ interests and give pros a greater voice in how the league is run. The association will launch later this year, but Riot is funding its creation and has put forward the representatives that will negotiate centrally on the players’ behalf, raising obvious concerns over conflicts of interest.

“We're watching a players' association being formed in League of Legends and it's basically being done without the players,” contends Morrison. “They are not paying attention to it, understanding what it does, or asking the right questions.

“On top of that, Riot themselves are recommending the attorneys to use, and the one that was ultimately chosen. That is always a major red flag, when your employer is choosing your attorney.”

“Foolproof money”

To date, the fragmented, free-for-all nature of esports is believed to have intimidated many non-endemic brands. Some have resisted getting involved while the sector undergoes its current growth spurt, put off by the uncertainty that entails. Yet investment from external sponsors is beginning to trickle in as the process of formalising and professionalising the space plays out.

Today, nearly three quarters of esports revenue is estimated to originate from sponsorship and advertising, most of which has come from endemic companies such as computer manufacturers, component makers and tech firms. Energy drinks companies have long been part of the mix as well, but a growing number of non-gaming consumer brands such as Pepsi are starting to see value in the sector, too.

For many in the gaming industry, the arrival of new brands is both a sign that esports is growing up and an indicator of the inherent benefits the sector harbours for mainstream marketers - those who have already seen fit to invest have, after all, been lured by the prospect of tapping into an otherwise hard-to-reach, digitally native and passionate demographic. But the majority of brands have sought to invest on the team or competition side, ensuring that the business of procuring sponsorships for players remains, comparatively speaking, in its infancy.

As arguably the leading player representative in esports, Morrison has sought to capitalise on this opportunity by carving out his own niche. After launching his law firm four years ago and initially taking on work for video game developers on a pro bono basis, he began representing players for their team contract negotiations. His business took off and now represents more than 250 players including the likes of Brandon Larned, Eugene Park and Alfonso Rodriguez - in fact, in the space of just two years Morrison says he’s done “over 500 player deals”, despite the fact the vast majority of pro gamers remain without any representation to speak of.

Morrison's client Alfonso Rodriguez, aka Mithy, competes in League of Legends with sponsor backing.

Following that initial success on the team contract side, Morrison saw a further opportunity in media and marketing representation. Late last year he launched Evolved Talent Agency, an offshoot management company that would market and promote some of the players his law firm represents. It is a division of the business that is showing promising signs of growth.

“As much as we’re reaching out to sponsors, they’re reaching out to us,” he says. “The endemic sponsors are starting to spend a lot more and the non-endemics are starting to come into the space and do big activations across the sports. Whether or not the sponsors are here, the money is certainly here and the viewers are certainly here. It’s just the internet makes money in less traditional means than just basic sponsorships.

“Even though they haven't activated yet, we’re seeing a lot of non-endemics come in who are starting to see this as foolproof money. And it’s less the amount of viewers - it’s just gauging the demographics and everything else.”

Though the money is starting to come, Morrison notes the ways in which activating with gamers at events differs from the way brands might look to work with athletes in traditional sports. In the gaming world, he says, many of the old approaches still apply, such as on-site activations that might seem "very tacky and very cheap" in a mainstream context. Morrison points to the example of "nerd conventions” like Comic-Con, where pros will do the customary autograph signings, hold meet-and-greets or play video games in front of a live audience with the action streaming online, all while sporting branded gear.

“It would be like watching a basketball player shoot free throws, except they’re actually playing against other people,” he explains. “And then while they’re doing that, they’re wearing a headset for HyperX or they’re using a Logitech keyboard or they’re wearing a jersey that says Monster Energy drink on it.”

A gamer plays Counter-Strike: Global Offensive in front of a live audience at Dreamhack, one of the world's largest gatherings for esports enthusiasts.

When it comes to sponsorship activation, Morrison believes the gaming industry has some way to go before it reaches the level of maturity seen in mainstream sports, where the use of athletes to market products or services is well established. But with robust viewership figures and sponsorship dollars continuing to pour in, he says it may not be long before the top esports players become visible and relatable enough to offer non-endemic brands greater bang for their marketing buck.

Indeed, pro gamers are already seeing the commercial upside of their sizeable online followings, which tend not to be limited by geography or influenced by historic team allegiances. Thanks to global platforms like Twitch, the leading gaming-cum-social network, esports players are able to generate a healthy income by selling advertising overlays alongside competition streams.

“We have players who make US$17,000 a month by just having people watch them, just because they run a commercial or two during their stream,” says Morrison. “It’s really basic stuff and they just print money.”

I would welcome more competition because I think it’s good for the players to hear different viewpoints and do different things.

“CAA-ing up the industry”

If the world of gaming has carried a reputation as an unwelcoming or uncertain place for newcomers, Morrison says that attitude has been clearly felt in the player apathy shown towards incoming brands. Just as players have shown a reluctance to organise and form a union until now, he suggests gamers have generally lacked the motivation or the willingness to work on activations for sponsoring brands.

That attitude is changing, however, particularly as gamers warm to the idea of new investment and the obligations that come with it. “The people who work with us, we’ve been having very long and serious talks with about activations and about what that requires and about what they’re actually signing up for,” Morrison adds. “I do think it’s being heard and I think that our guys are activating pretty well.”

Nevertheless, the same indifference has been seen elsewhere. Generally speaking, sports simulation games such as EA Sports’ Fifa franchise have tended not to resonate with diehard gamers, and the same can be said when it comes to investors funnelling in from traditional sports.

In the US in particular, investments from individuals and entities involved in mainstream sports have ramped up considerably in recent months. Team owners and players in the National Basketball Association (NBA) have generally led the way but they have mostly come in on the organisation side, buying up esports franchises, investing in leagues or, as in the case of the NBA itself, setting up their own competitions. Further investment has come from other quarters like the traditional agency powerhouses such as IMG, which has set up the ELeague in partnership with Turner, and other boutique companies, but they too have yet to get heavily involved in player representation.

“The IMGs of the world, I don’t really view as competition because they’re just dealing with a different area of the industry,” says Morrison. “The other people coming in, trying to take players or rep players, I would welcome more competition because I think it’s good for the players to hear different viewpoints and do different things. But there’s not too much out there that is scaring us, to be blunt about it.”

Morrison says traditional sports owners and agents have been drawn to esports because "they keep hearing it's where the money is".

Morrison adds that, over the past few months and years, he’s been approached by numerous sports agents looking to break into esports. “I get ten emails a week from somebody at CAA or wherever saying, ‘Hey, can we have a call and can you teach me eSports?’ Quite frankly, no, learn it yourself,” he says.

“I don’t want you coming in here and CAA-ing up the industry. That’s not what the players want, that’s not what’s good for us, and it’s not what’s good for anyone. The traditional sports agent mindset won’t work here.”

Though he says he can’t vouch for others in the industry, Morrison is of the opinion that the current onrush into esports, from traditional sports owners, broadcasters or otherwise, amounts to little more than bandwagon jumping. Still, he sees areas where well-heeled outside investors can have a positive impact on the sector, especially if they help improve work conditions and earning prospects for players.

“Don’t get me wrong,” he continues, “I’m very good friends of some of these NBA owners that came in early, like Andy Miller, for example, who owns NRG Esports. I think he came in and actually made this industry a lot better. He brought in good contracts, he treated his players right, etc.

“I think that esports is the new hot thing on the block, so all these very rich people are coming in and saying, ‘I want that,’ and they don’t care what they destroy in the wake of that. But that’s why we’re seeing the traditional sports agents come in, because they keep hearing it’s where the money is.

“But, man, are the players not going to care or be impressed that they represent whoever in sports. It’s just not what they’re into. They care if you help build somebody’s YouTube channel, they care if you bring someone from 1,000 Twitter followers to 100,000. They don’t care if you got Darrelle Revis US$24 million for holding out for three months. That’s just not where their minds are.”

If you ask a ten-year-old right now who their favourite athlete is, I think a lot of them will name an eSports player or a YouTuber who plays these games.

“It could be anything"

As the esports landscape continues to evolve, there is no telling which course the sector will take. Perhaps the only certainty is that the current land grab will continue for some time yet, and that further growth will come as new money continues to channel in.

“In five years,” Morrison says, “I think this is going to be still not quite understood by anyone 40 or over right now, but I think it’s going to completely dominate sports in viewership numbers. It already does worldwide but in terms of America, if you ask a ten-year-old right now who their favourite athlete is, I think a lot of them will name an eSports player or a YouTuber who plays these games.

“I think that’s only going to grow in number and while that happens, the stigma of it, how weird it is, will disappear. Sponsors are going to come in. Again, five years sounds not that far away but it’s forever in this. We’ve been here two years and I cannot explain to you the difference between then and today. In five years from now, it could be anything. What’s impossible is eSports not getting any bigger.

“The games might change because certain publishers might screw it up, but too many people play video games now and too many people are interested in watching people better than them do it - the same reason I grew up playing hockey and I was obsessed with playing hockey. I wanted to see the pros do it, and that’s not going to change.”