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The Weekly Legal Briefing: The Law of Esports

From legal ongoings in esports to a Sketchers suing Adidas, there is always a lot going on at the intersection of sports and law.

Blake Yagman

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Esports is a big business with plenty of legal opportunities. (Image via SaultOnline.com)

If I had known that esports were going to take off, I probably would have swapped out studying for the LSAT (and later the bar exam) for video games. Nevertheless, the esports arm of the sports industry has taken off without my mediocre NBA 2K skills.

This week I was fortunate to speak with Justin Jacobson, of The Jacobson Firm; Justin is an intellectual property, sports and entertainment lawyer who has made a foray into the esports sphere. Because of the newness of esports, a lot of the legal issues that arise in the sport have to be managed by experts — like Justin Jacobson — who have the arsenal to deal with an area of sports law that continues to develop on a daily basis.

Justin Jacobson, who also goes by the moniker “World Wide Just,” has been able to penetrate the developing esports market in order to build a practice that specifically serves esports clients. Thus far, he has “assisted professional gamers, content streamers, and smaller esports teams and organizations.”

Jacobson, like many attorneys now competing to occupy the esports sphere, had the foresight to see the esports movement coming. Jacobson emphasizes, “With the rapid expansion of esports and the growing investments from traditional entertainment and sports professionals, it seemed to be the natural progression for [the Jacobson Firm’s] work. We felt that we also brought a different knowledge and experience that many of the other esports professionals lacked due to our prior work in other areas of the entertainment world.”

The Jacobson Firm, which has worked with companies like Sony, Universal, Warner, and Viacom, was able to use their experience in dealing with the full gamut of entertainment law issues.

Jacobson stresses that there are multiple areas of law that make up the law around esports—akin to entertainment and sports law: “Similar to other entertainment professions, such as music and traditional sports, working with [esports] talent is fairly similar as all that really changes is the medium. Meaning, whether they are a musician creating music, a fashion designer creating a t-shirt design, or an individual getting paid to play a video game, they all have similar legal needs.”

Going forward, Jacobson believes that the future of esports is bright. “[W]ith more consistent outside investments being made, there should be additional opportunities for more tournaments in new games and for existing competitions to increase its prize money.” With that being said, maybe I should consider picking up a PlayStation controller soon.

If you are interested in the work that the Jacobson Firm does, check out their website here.

Here are this week’s Sports Law headlines:

LITIGATION

According to Darren Heitner of Forbes, Sketchers has filed a lawsuit against Adidas AG alleging that Adidas AG committed false advertising and unfair competition as a result of “an allegation that Adidas has been illegally paying players under the table in a way that has economically harmed Sketchers.” The complaint was filed in California federal court and could shine a light on whether other apparel companies might have a claim against Adidas AG.

The Detroit Lions are having a tempestuous week. The team is being sued by two former employees of the Lions’ video department for racial and age discrimination. The team is also dealing with fallout from the discovery that newly hired Head Coach Matt Patricia was indicted on a charge of sexual assault in 1996; a charge which was later dismissed by the prosecutor “at the request of the complaining individual.” The Lions ownership and front office have come out in support of Patricia, who maintains his innocence.

PLAYER HEALTH

Former Miami Hurricanes running back (and current Tampa Bay Buccaneer) Mike James made history a few weeks ago when he became the first active NFL player to seek a medical use exemption from the league so that he could use medicinal Marijuana. James sought the exemption so that he could use Marijuana rather than potentially addictive painkiller medication for his football-related injuries. Unfortunately, the NFL denied James’ request; it should be interesting to see how James approaches this denial from a legal standpoint. (FULL DISCLOSURE: I worked with Mike James during my time as a student assistant coach for the Hurricanes from 2010-2011.)

GAMBLING

As the United States still awaits a decision on sports gambling from the Supreme Court, potential participants are wasting no time preparing for inevitable legalization. According to David Payne Purdum, who writes for ESPN, there is a tentative agreement in the state of West Virginia between WVU and Marshall to receive a share of sports betting profits. This agreement, if executed, would be the very first of its kind.

Blake, a recent law school graduate, lives in New York City. Blake attended undergrad at the University of Miami where he worked for Hurricanes football, WVUM and student government. Blake writes about legal issues related to the sports industry for Front Office Sports.

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‘Locked In’ Goes Behind the Curtain With NBA 2K League Players

For Season 2, the NBA 2K League is diving into the lives of its players in the content series “Locked In,” hoping to attract new fans.

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NBA 2K Locked In
Photo Credit: NBAE/Getty Images

Walking through New York City’s Guggenheim Museum, Brian Traynor discusses his love of art and opens up about his life’s hardships, giving NBA 2K League fans a glimpse into the lives of esport athletes rarely seen — until now.

Traynor, or “NachoTraynor” for T-Wolves Gaming, is one of two subjects in the fourth episode of the league’s new behind-the-scenes series, “Locked In Powered by AT&T.”

A fine arts graduate, NachoTraynor rarely had access to museums growing up and now uses his NBA 2K League trips to New York City to visit as many as he can. This also helps clear his head before games. His story is complemented by Cameron “KingCamRoyalty” Ford, a player for Magic Gaming and rapper who uses studio time in a similar fashion.

READ MORE: Allied Esports Recognizes Opportunity in Mexico With New Partnership

“This is one of my favorite episodes because it takes it so far off the court,” says Matt Arden, NBA 2K League head of content and media. “This is the first piece of content we created that honestly has very little 2K League footage and truly is about these two incredibly unique individuals.

“We’ve found that we’re scratching an itch. We feel like highlighting this side of the league is so important to grow league awareness and grow the personalities.”

“Locked In,” is bringing to esports the same sort of access HBO’s Hard Knocks and “24/7” have brought to traditional sports.

Arden joined the NBA 2K League five months ago to help get these types of broadcasts off the ground and help tell stories around the league’s personalities. He believes this type of content is key to attracting more basketball and casual sports fans beyond hardcore gamers. The new series is built on the foundation of “Draft Hopefuls,” a content series that went behind-the-scenes with NBA 2K League prospects behind the Season 2 draft this past March. Arden says that series performed well and affirmed the craving of creative storytelling. This set in motion “Locked In.”

As the NBA 2K League’s second season progresses, having that storytelling beyond the Xs and Os was important. For Roger Caneda, an esports consultant and former Mavs Gaming general manager, he feels hiring Arden and the introduction of behind-the-scenes content will be important for the NBA 2K League’s success and longevity.

“Season one happened so fast, the league wasn’t able to grasp how starting something like the 2K League needed content to be successful,” Caneda says. “Esports is an industry where people are curious, and providing this behind-the-scenes insight is big, not just for 2K but the industry as a whole.

“Diving into content will be huge for everyone.”

Now a fan on the outside, Caneda feels “Locked In” makes him more compelled to watch the games. He might not be alone, according to the NBA 2K League, it has gained 20,000 followers on its YouTube and Twitch channels this year. Total minutes watched has experienced year-over-year growth of 36%. All of NBA 2K League’s live and on-demand content has also generated 25 million views across social channels since the start of Season 2.

With “Locked In,” Arden is doing what he was brought in for, but he is also quick to point out the series is helped immensely by the league’s partnership with AT&T.

“They can’t go unnoticed,” Arden says. “They’re truly looking to build connections and share stories and elevate our game. The conversations we’ve had aren’t about their logo, but they’re invested in the next story we want to tell.”

A simple logo placement would likely be plenty for many partners, but Shiz Suzuki, AT&T AVP of Experiential Marketing and Sponsorship says it is in the company’s best interest to help make the content the best it can be.

“Anything we can do to help bring fans closer to the sport they love is what our NBA partnership is all about and why we’re thrilled to help the NBA 2K League make these stories and this original content series happen,” Suzuki says. “Those who follow the action know how multifaceted these players are, and this series brings that to life with a riveting approach to storytelling that even those unfamiliar with the league can look forward to watching.”

Finding the next players to feature is not difficult for Arden and his team. The production team often comes across stories in broadcasts and then tries to execute an episode with a 10 to 12-day production schedule.

“We have some incredible, multi-dimensional personalities from diverse backgrounds in our league, so it actually hasn’t been that difficult to identify good stories, frankly it’s been difficult to cross some off the lists,” Arden says. “These stories and personalities have emerged naturally on their own and we’ve been trying to be very organic in taking those stories when we see them bubble to the surface and taking them and running with them.”

READ MORE: ‘We Are LAFC’ Shows Off Exclusive Content Opportunity for MLS, ESPN

Right now, “Locked In” is still ironing out the logistics of filming and how to go to market and Season 1 is not even complete — the league hopes to release 10 episodes. Still, Arden’s happy with the product so far and would love to see a second year of “Locked In.” More so than anything, he’s happy with how the storylines are coming full circle to be included in tournament broadcasts.

“The more stories we uncover, the more we talk about individuals, learn about them, the more other players notice, the more fans notice,” he says. “We’re providing a real nice 360 communication around all our communication and broadcast touch points. It’s achieving the goals we wanted  to achieve, no matter the amount of episodes we produce.”

Deeper behind-the-scenes content has helped further engage fans with traditional sports. While the verdict is still out on the new NBA 2K League content, there is plenty for the esports industry to learn from here.

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Allied Esports Recognizes Opportunity in Mexico With New Partnership

Partnering with TV Azteca, Allied Esports hopes to tap into an underserved esports market in Latin America, particularly Mexico.

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Allied Esports Mexico
Photo Courtesy Allied Esports

Allied Esports is seeking to grow its presence in Latin America with a strategic partnership with TV Azteca.

The partnership gives Allied Esports direct access to 95 percent of the Mexican market with TV Azteca’s digital channels and 40 local and regional free-to-air stations. With the partnership, TV Azteca is also launching its newest platform, Azteca Gaming, which will debut Allied Esports’ newest production, “Nation vs. Nation.”

Allied Esports CEO Jud Hannigan says TV Azteca’s position as a broadcast leader in Mexico provides them a great foundation for potential growth in Latin America, a relatively untapped market in the esports industry.

READ MORE: Building on Country Pride, Combate Americas Looks for Big 2019

“We’re excited about this first event in a new format as a kickoff,” Hannigan says. “They’re launching Azteca Esports and we’re coming in with this first event, and have plenty of others planned. They’re the top sports broadcaster in the region, so we couldn’t be more excited.”

“Nation vs. Nation” is the company’s first event and broadcast in Latin America, and it features four U.S. players against a Mexican team of 40 players in PlayerUnknown’s Battlegrounds. A trophy and cash prizes were on the line yesterday in Mexico City.

“The transformation process of TV Azteca, to bring the best television, has led to set an eye in new markets, towards an audience that consumes esports,” says Benjamín Salinas, CEO, TV Azteca. “Sports are part of our strength, and now with esports, we find a way to connect with a growing market in Mexico.”

Broadly speaking, this expansion for Allied Esports encompasses Latin America, but there’s a strategic importance specifically to Mexico, Hannigan notes. The country will be a primary driver of the region’s esports growth in the coming years.

According to eMarketer, Goldman Sachs projects the esports industry will bring in revenues of $2.96 billion in 2022. Latin America will make up $100 million of that.

The article reported the slow growth curve in Latin America is based on a lack of fixed broadband, but significant growth is expected in both Brazil and Mexico. Esports and video game revenue in Mexico jumped from $1.2 million in 2014 to an estimated $10.4 million in 2019 and is projected to rise to $20.3 million in 2022, according to Statista.

“Latin America represents a massive and transformative opportunity for Allied Esports,” says Frank Ng, co-CEO, Ourgame Holdings International – the current owner of Allied Esports. “By combining our live events experience with TV Azteca’s unequaled reach as the No. 1 sports network in Mexico, this crucial esports ecology partnership will be a major driver in building out the offline-online environment at the core of Allied Esports’ global strategy.”

The Allied Esports partnership with TV Azteca comes on the heels of sister company World Poker Tour reaching an agreement with the Latin American broadcaster to carry the poker tour’s library of content in March and develop poker-related products for the region’s audience.

As the World Poker Tour develops its localized content, Hannigan said the partners explored opportunities and landed on looking to grow esports in the region.

READ MORE: Blast Pro Series Debuts in U.S. with Fan Focused Esports Tournament

The approach to Latin America through strategic partnerships will mirror how Allied Esports has tackled other regions of the globe, including Asia, Europe and North America. Along with Latin America, Australia is also in this year’s expansion plans.

“From our perspective, as Allied Esports grows, we’re looking at new regions and to affiliate with strong regional partners,” Hannigan says. “They’re really content-driven partnerships.”

Latin America might lag much of the rest of the world in esports popularity, but with the dearth comes opportunity. At least that’s what Allied Esports is banking on.

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Overwatch League’s First Homestand Weekend Sets the Stage for Geolocation

The Overwatch League’s first Homestand Weekend was a success. But what will happen in 2020 when a special attraction becomes a regular menu item?

Mike Piellucci

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Photo Courtesy: Dallas Fuel

Jiri “LiNKzr” Masalin had his doubts.

The Houston Outlaws player saw the same thing that so many fans, broadcasters and pundits did about the Overwatch League. That no matter how sleek the game design is, no matter who signed on as part of its star-studded ownership group and no matter how much financial muscle Blizzard puts behind the 16-month-old league, it’s future – “The whole premise of the league,” confirms Dallas Fuel owner Mike Rufail – hinges on how successfully it will geolocate its 20 franchises next year for its third season.

The league had its first test run on Saturday and Sunday at the Allen Event Center in suburban Dallas in the first of three “Homestand Weekend” events this season. It would be hard to term it anything other than a rousing success. The arena was filled to its 4,500-person capacity on both days, and the event featured activations from sponsors including Jack in the Box (the Fuel’s jersey sponsor), GameStop, AB InBev, T-Mobile and Omen by HP.

READ MORE: Esports Fashion Levels Up as Esports Continue into Mainstream

But the most impressive feat of all was the environment. With the Dallas Stars’ mascot, Victor E. Green, in attendance, the Fuel’s event staff manufactured an environment that resembled a playoff hockey game more so than any conventional expectations of an esports match, with accouterments like pyrotechnics, a live performance from electronic music artist Karma Fields and a cosplayed version of a dot race – and, crucially, a red-hot crowd.

When it was all said and done, even wary people like Masalin couldn’t help but be impressed.

“As someone who played online throughout most of my career, I was obviously a bit skeptical with everything that would go into this,” he says. “But after being here and feeling the crowd and seeing how the logistics were and just how it feels to be a player in this kind of situation, I was very impressed with what we managed to do on super-short notice, basically. I’m excited for next year instead of skeptical.”

OWL’s now has two chances to replicate it, first in Atlanta in July before heading to Los Angeles in August. But the true questions concern how much of the weekend’s pomp and circumstance will translate across the globe once localized matches aren’t part of a barnstorming tour but instead are featured on the everyday menu in crowded sports markets.

For his part, Rufail isn’t concerned about the Fuel’s prospects. Per the Fuel’s PR team, 77 percent of tickets were sold to Texas buyers, a number suggesting that the foundation of a core audience is already in place. Instead of worrying about regression, he wants to go even bigger when it comes time for the Fuel to choose a permanent home ahead of the 2020 season.

“I would like to see more fans in the seats and test if our fans will come out and sell out a bigger crowd,” he says. “You won’t ever know until you do it, you know? And so that’s the first priority, to see if we can get a bigger crowd.”

Yet the league is fighting a war on two fronts, and only one of them is with conventional sports. The second is with its audience’s consumer habits in a marketplace that shifts at warp speed. Fortnite, for instance, was barely a blip on the radar when the Overwatch League’s first season kicked off last January; now, the battle royale game is a global sensation. Overwatch’s Twitch numbers have also fluctuated, perhaps due to longstanding critiques regarding the gameplay experience going stagnant, chatter that culminated in a viral video by retired pro Brandon “Seagull” Larned – arguably the league’s most recognizable star during its first season – who called the game a “coin flip.” Fewer everyday players could eventually choke off the supply of fresh talent, which in turn could stagnate the league’s ability to mint new stars.

Rufail isn’t worried about that last point, instead pointing out that the majority of NFL fans are hardly active football participants. And, it’s worth noting, any big-picture concerns certainly don’t appear to be putting an immediate damper on growth. Big-name sponsors are continuing to sign on. AB InBev (necessary disclosure: AB InBev is a partner of Front Office Sports) used the first Homestand Weekend to kick off a leaguewide partnership, while GameStop is jumping aboard as a partner of the Fuel. The league’s Twitch numbers are back on the upswing, too, after becoming the livestream platform’s most-viewed account for the month of April. Now, the first Homestand Weekend has given the Overwatch League proof of concept for prospective partners that their product that can be monetized in all the ways traditional sports have been for generations.

READ MORE: Sports World Takes on TikTok as Next Social Media Frontier

“We have great demographic trends,” says the Outlaws’ Jacob “Jake” Lyon. “The only thing esports is missing from a business perspective is all those revenue streams that traditional sports are really relying on, which are ticket revenue, concessions revenue, bringing people into a physical space and making that experience so much richer than it could possibly be online or on television.”

Like his teammate Masalin, Lyon is convinced: Overwatch League – and esports – is here to stay. Last weekend only gave him 4,500 reasons to believe more fervently.

“Anyone looking for a litmus test, ask any fan in the building if they had a good time and if they can get their friends to come next time,” Lyon says.

“I think that’s really all you need to know about the future of esports.”

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