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COMMENT: Esports and broadcast – The legal issues of partnership

By 15th June 2020 No Comments

Hayley Brady, partner and UK head of media and digital, Herbert Smith Freehills (pictured below) on the potential legal pitfalls to overcome when broadcasting esports events.

The Covid-19 pandemic has stripped global television schedules of traditional content, with sports broadcasters instead sourcing a great deal of fresh content from esports.

Well-publicised examples include Sky’s multi-day FIFA 20 tournaments. More niche offerings include Finnish channel Telia Finland’s screening of Counter-Strike competitions.

This partnering of ‘traditional’ broadcast providers with esports leagues has been developing for some time and Covid-19 has seen this trend accelerate.

From a lawyer’s perspective, broadcasters, esports leagues, rights holders and other participants will need to bear in mind several important legal and contractual considerations.

These include navigating existing deals and conflicts that may prevent participation in an esports tournament; reconciling the global availability of esports content with territory-based rights allocations; and identifying and addressing any commercial risks and relevant regulatory concerns, including in relation to gambling.

Navigating existing deals and conflicts
Broadcasters will need to do their due diligence on esports leagues to understand any existing – and conflicting – rights and tie-ups.

Even though there is significant pressure to launch and deliver new content to sports-hungry viewers, taking the time to work through these issues is an important prerequisite to developing and launching content successfully.

It’s not always as simple as converting a live tournament into a virtual equivalent. For example, Spanish La Liga’s Fifa 20 tournament broadcast on Movistar was missing two clubs due to a conflicting sponsorship arrangement with another computer game developer.

Untangling and understanding the arrangements which teams (and individual players) have in place in relation to image rights, sponsorship agreements, and content creation and ownership, will be vital to both an effective partnership arrangement and, ultimately, offering compelling content to the market.

Reconciling global esports with territorial rights
The esports world is global by nature and there can be a complex interplay between access to esports content and traditional territory-based broadcast rights. Partnership arrangements between broadcasters and esports leagues should be clear about multi-party and cross-territorial licensing, data hosting and sharing, and any restrictions on future leveraging of the relevant content.

Parties will also need to consider how the content itself and any supporting advertising are presented to traditional broadcast audiences, particularly in terms of territorial and temporal viewing restrictions, as well as cultural acceptability.

For example, ESPN’s Valorant Invitational event required that incidents which would, in the normal Valorant gaming environment, produce ‘blood’ be modified to produce sparks – a good demonstration of the technical compromise sometimes needed from both the broadcast and esports worlds to ensure regulatory compliance, broader appeal to audiences and sponsorship opportunities.

Identifying and addressing commercial and regulatory risks
Traditional commercial models for acquiring and distributing sports content, and the related regulatory regimes many countries have in place, will need to adjust to accommodate widespread partnering between broadcasters and esports leagues.

A range of factors, such as payment mechanisms, IPR ownership and exploitation, the employment status of esports teams, and managing risks and regulatory compliance issues around gambling (both in-game by players and by audiences), will affect some of the pricing, risk transfer and commercial deal drivers. Identifying and addressing these will present novel challenges – and no doubt opportunities – for parties.

Putting in place such partnerships will therefore not only require a careful consideration of the nature of the content to be presented to customers from a commercial perspective but also a legal one.

If esports leagues can successfully join forces with broadcasters then, judging by some of the early examples, the post-Covid landscape for sports broadcasting (both live and virtual) may well be very different, much-expanded and able to offer audiences new ways of viewing and participating.

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