eSports Player Contracts | Should Pro Gamers be treated like Pro Athletes?

European employment laws have a justified reputation of being very protective of employees, with permanent full-time employment as the statutory ideal. Most employers cannot simply “hire and fire”, and justifications are required in order to enter into fixed-term contracts beyond certain permitted periods (e.g. two years in Germany). But what if the duties of an employee are so specific that they will only be able to perform them for a short time period?

On 16 January 2018, the German Federal Labour Court ruled that it is allowed to conclude a fixed-term employment contract with professional football players for more than two years, as there is a reason for the limitation. The time limitation of employment contracts with licensed players of the German Soccer League (Bundesliga) is justified because of the special character of the work performance. Does the same hold true for employment contracts with gamers? In any case, the decision sets a positive signal in this direction.

What happened

A former Bundesliga goalkeeper had filed a suit challenging the time limitation of his employment relationship with his club. According to him, there was no objective reason to limit his employment contract. He won in the first instance in front of the Labor Court. The consequence, had this decision not been appealed: Fixed-term employment contracts with professional players would have not been possible anymore – a disaster for the soccer community. The Regional Labor Court and the Federal Labor Court however saw it differently, and therefore allow clubs to continue to conclude fix-term employment contracts with their professional players.

The Courts’ Arguments

The full reasons for the Federal Labor Court decision have not yet been published, but there is a summarizing press release. Accordingly, in pro soccer, a licensed player owes top athletic performances in his team. The player can only perform this for a limited period of time. Therefore, the clubs have a legitimate interest in concluding fixed-term employment contracts with the player even beyond the normally permitted period of two years.

The Regional Labor Court had additionally argued that the special feature of professional soccer – inter alia – is the fact that there is an extraordinarily high uncertainty about how long a player can play successfully. This uncertainty arises from:

• a high risk of injury
• the dependence on the tactical concept in the game and
• the game system, as personnel changes have to be made to optimise the performance level.

In addition, in professional soccer, the club has a special and legitimate interest in a competitive age structure, the public requests a regular change in the “soccer show” and exceptionally high salaries are paid in professional soccer.

What does this mean for fixed-term employment contracts with gamers?

Normally, professional, paid athletes are employees of their club (regardless of the corporate structure of the club). In eSports, this is less clear and there are numerous different forms of legal relationships between the gamers and the team. However, concluding an employment relationship is quite common – in particular, even if the parties call it differently, the relationship might be an employment agreement anyway if gamers are subject to the instructions of their head coaches and the club.

Current eSports structures are certainly not (yet) comparable to professional soccer in Europe, in terms of their level of organization and public importance; however, the similarities between both cannot be denied. Gamers also achieve top performances in eSports leagues (such as the ESL). A competitive age structure is obviously significant. The average age of professional gamers is in the early twenties.

Similar to professional sports, a good tactical concept in the game is essential. Teams have to make personnel changes in order to improve the performance of the team. The marketing opportunities for players and teams are increasing. Prominent examples are e.g. the obligation of FIFA player Mirza Jahic (five-time Austrian champion and winner of the 2014 Virtual Bundesliga) in November 2017 and the transfer of the CS: GO-Line-up from Luminosity Gaming to German eSports giant SK Gaming in 2016. For eSports fans, the constant variation and changes of the “show” are just as important as they are for soccer fans.

It is true that the teams currently pay the gamers considerably lower salaries than in professional soccer. However, remunerations are continuously rising – prize money for winning tournaments and additional income are often paid additionally. Only the risk of injury, which is high among “typical” professional athletes, may be less measurable for gamers. Nevertheless, e.g. hand injuries of the gamers may also occur in the future more often.

Conclusion

There are good reasons to assume that fixed-term employment contracts can also be concluded beyond the two year limit with professional gamers, due to the character of the job performance, even if this theory has yet to be tested in the courts. For eSports, future development on this issue will be as interesting as for traditional sports.