As the free agency page in the esports world begins to turn, rosters begin to lock in, and players begin turning their attention to practice, boot camps, and building chemistry with their new teammates, it’s a critical moment for competitors to pause, reflect, and evaluate the contract they are just about to sign (or have already signed).

The new environment can be very exciting. New team, new teammates; new opportunity, new competitive landscape. However, some of those changes come with risk. Unlike more established traditional sports leagues, the esports space still has wide variation in how contracts are structured, what rights players have, and how obligations are enforced. Accordingly, our esports team put together five key considerations esports competitors should keep in mind as they finalize their contracts and begin the next chapter of their esports careers.

1. Show Me the Money – Sources of Compensation, Timing, and Conditions

Salary typically makes the headlines, but for many players, ancillary sources of compensation like prize money, streaming revenue, or revenue share from in-game items can meet or exceed that salary headline. Understanding how those revenue verticals are defined, when they are paid, and what conditions may attach to them can be critical to maximizing a player’s bottom line.

As an illustration, the average esports player’s contract may include a combination of the following:

• Base salary: Typically paid monthly or biweekly, but may be reduced if the player is benched or during the offseason.
• Prize-money split: Many esports contracts allocate a percentage of tournament winnings to the organization, who then pays out each of the players, as well as the coach and support staff in some situations.
• Streaming and Sponsorship Revenue: Players may not be only players; they may be content creators with significant followings, which means both an opportunity for the team to attract sponsors and attach the player and the player to pursue independent opportunities. How is revenue from those channels allocated?
• In-Game Content: Many esports generate a large amount of revenue through in-game content like skins, stickers, hats, logos, and other cosmetics that contain the player or team’s branding, which is then paid to the team (and consequently to the player). In games like Counter Strike, with its robust sticker economy, or Valorant with its bevy of skins, players may see significant earnings.
• Merchandise: Where does revenue from jerseys, hats, or other apparel featuring the player go? Can the player launch their own branded merchandise, or does that need to be routed through the team?
• Travel/lodging/meals: When  on the road (especially internationally), what is the standard of accommodation? Are per-diems or allowances provided? Are these required to meet a minimum?
• Expense reimbursement and benefits: Health insurance (if any), relocation, visa/immigration support (if relevant), equipment, jersey/gear sponsorship obligations.

Because these revenue streams may depend on different third parties, it can be critical to review what conditions are required for these payments to become due and what supporting information, if any, is needed to ensure the current amount is paid. Audit rights, for example, can be important for more complex calculations.

2. Term and Termination

One of the most foundational provisions in an esports player contract is how long it lasts, as well as under what circumstances it can end early. That starts with a Term, which is the duration of the contract. That may include an Option, which permits either the team or the player (or both) to exercise that option to extend the contract for an additional period of time.

However, the Term is not a guarantee the contract will survive that whole duration. Both sides may be able to terminate a contract if the other party breaches the agreement, like the organization failing to pay the player their salary. Some contracts also permit a “buyout”, where another team pays the existing team a lump sum to buy the rights to the player’s contract. Others permit the team to unilaterally terminate a contract without cause, upon the payment of an agreed-upon severance. Finally, in more unique circumstances, players may negotiate unique termination rights, like being able to terminate if a valued teammate leaves the team.

3. Who is the Most-Favored-Nation (MFN)?

Player contracts often include something called a “most-favored-nations (MFN)”clause alongside the grant of a benefit, like travel accommodations or in-game content revenue share. Those can be a powerful tool; what an MFN clause means is that if the player’s team or organization offers a teammate better terms (for a particular benefit) than the MFN holder, the MFN holder becomes entitled to receive those same terms (or the incremental equivalent). In esports, the categories of benefits may go beyond salary. For example, these kinds of terms may be subject to MFN treatment:

• Travel and lodging accommodations (upgraded flights, better hotel standards, or larger per-diem)
• Revenue share of streaming or brand deals
• Championship/prize bonus splits
• Or almost anything else (gear upgrades, personal coaching, health insurance, 401(k) participation, or even training support)

That all said, while an MFN clause gives the recipient real upside as their teammates negotiate preferable terms, that only works in practice if players know what the floor and ceiling look like. Accordingly, talking to teammates to get a sense for their benefits, knowing what rights the MFN clause applies to, and raising these conversations early can be key to reap the rewards.

4. Know the Obligations, Conduct and Schedule Clauses

With the excitement of signing a new deal, it’s easy to overlook the full scope of a player’s responsibilities, which may include (beyond just competing in their game of choice):

• Minimum number of streams, content obligations, social-media posts: Some organizations expect players to deliver a set amount of personal broadcast time or promotional content, others just want participation in team activations.
• Code of Conduct: What team rules, public image policies, or league/publisher integrity standards govern the player’s conduct?
• Travel/shift commitments: Teams may require players to relocate, attend bootcamps, abide by curfews, and/or participate in sponsor events.
• Non-compete, transfer, or even retirement restrictions: Players who want to retire and rethink that decision, or transfer to another game in the same genre (e.g. Overwatch to Marvel Rivals) may face certain hurdles.

Failure to adhere to these obligations may mean fines, penalties, docked compensation, or even termination in extreme cases. Accordingly, players may also want to consider building in some ability to make mistakes and learn from them before the penalties for misconduct kick in.

Full understanding of the player’s end of the bargain means two things: First, it means the player can understand when something extra is being asked, which could mean additional compensation. And second, it means understanding what is fair and reasonable as far as penalties for failure to satisfy those obligations.

5. Immigration, Travel, and Cross-Border Issues

Many top-tier esports organizations compete internationally or bring in talent from other regions. If the player will be living, competing, or traveling away from their home country, that means thinking about getting a visa or work permit, navigating foreign tax rules, relying on accommodations in a potentially unfamiliar area, and even settling disputes in new legal terrain.

Conclusion

Free agency may feel like the “fun” part of the season: bright lights, new logos, superteams, and general hype. But the contract players sign now may define a large portion of their careers. As they move into the new phase of their careers, terms should be reviewed carefully.

Esports contracts can be very complicated, so competitors who are unsure about how any of these items apply to their situation should consider speaking to a lawyer familiar with the esports industry and its unique features, as well as an agent to guide them through the negotiation process.

Ultimately, succeeding on the highest esports stages means assembling the right team, whether that team competes on Summoner’s Rift, Dust II, Beaver Creek, or under the bright lights of a redlined Microsoft Word template.