EPTKeSPA has announced their official stance regarding the end of negotiations and the move into the court of law. The full text is as follows.
▶ KeSPA has re-invested the entirety of the broadcasting fees into the operations of the league.
While KeSPA is a non profit organization that supports and raises the eSports industry, it can run profitable endeavors to promote a safe environment and to bolster eSports.
Currently, the majority of KeSPA's income comes from the organization fee, Proleague Sponsorship, and the broadcasting fees, and all of the income is reinvested into the operation of Proleague and to develop the foundations of eSports.
The broadcasting busbiness with regards to Proleague broadcasting that started in 2007 was started to support the foundation of eSports and league operations and to create an organizational structure so that many more people can watch eSports and Proleague by broadcasting Proleague that keeps up with the change in environment.
It is the truth that after this business started in 2007, KeSPA has used the entirety of the sponsorship money and the broadcasting fees to operate Proleague. KeSPA selected IEG to be its broadcasting license business partner in 2007, and received 1.7 billion won in broadcasting fees. The main broadcasting stations, OGN and MBC, has paid 600 million won each over the three years, for a total of 1.2 billion won to IEG. However, KeSPA has reinvested 250 million won to each broadcasting station yearly for broadcast program creation fees, for a total of 1.5 billion won total.
The truth is that it is difficult to create a profit and have a safe operation of Proleague with how Proleague currently operates unlike many other pro-Sports industries. The situation is the same for many other companies that operate eSports contests.
KeSPA, from 2008, after a change in the law regarding new media environments, found that their income from broadcasting fees have shrunk. In order to continue to support and expand the market where players and teams can be active in leagues on the level of Proleague, KeSPA has run a deficit every year, which was alleviated in part by the organizational fee. KeSPA has also been lowering its deficit through changes in how the league operates and other efforts.
In this situation, while the conditions being negotiated with Gretech such as the Contest Approval Fee and other fees can have a huge effect on the operations of the leagues, but because KeSPA respects the IP rights related to Starcraft 1, and to allow the safe operations of Starcraft 1 leagues, have been in negotiations with Gretech so that we can reach an agreeable negotiatoin.
▶ It is disappointing that Blizzard has mentioned lawsuits in the middle of negotiations.
KeSPA and the Progame teams, Gretech, and the lawyer from Blizzard has continued to negotiate for a while. On October 20th, the negotiation team and KeSPA has agreed to a portion of the contracts and the approval of the Platform in this 8th meeting, and on the 25th, the 9th meeting, we talked about the IP rights of the broadcasted programs, events, and the approval fee. It is very disappointing that on October 22nd, Blizzard's CEO Paul Sams, during his interview at Blizzcon, announced that "It is very important to protect our IP rights", "We have tried to solve this problem in a fair way for many years, and we have reached the conclusion that a law suit would be the best way".
Afterwards, KeSPA, in order to continue negotiations, had the 9th meeting on 10/25, 10th meeting on 10/27 and negotiated regarding events and the room for comprehensive negotiation for leagues , and had tuned the differences in opinion regarding authorship rights of broadcast programs, league approval fees, and have negotiated the beginning of next week for an 11th meeting.
But after the end of the meeting on 10/27, something far from the truth has been announced, claiming that "KeSPA-Gretech negotiations break down; Lawsuits next". This is very flustering for KeSPA and the progame teams, and is disappointed as it brings doubt to the negotiation process that is going smoothly.
▶ KeSPA and the Progame teams has been putting in their best efforts for negotiations and is involved in the negotiations sincerely.
During this time, KeSPA and the Progame teams have sincerely been a part of negotiations with Gretech, and has proposed many amendments, and sacrificed many conditions to operate the leagues safely. Despite professional opinion saying that giving shared ownership to the original IP holder is too much considering the technical skills by the broadcasting stations and the efforts of the players required to creating the program, the approval fee and the usage fee to broadcast the games, KeSPA has agreed to have limited share ownership for promotional use, and is doing its best to reach the end of the negotiations.
But the extreme approval fee that ignores the current Starcraft 1 league income situation has not changed since the beginning. As we know from what Gretech has announced on the 16th, their fees are 1 won to hold a contest, 100 million won to broadcast the contest, and once added up, the Proleague is a 100 million, and the Starleagues operated by the broadcasting stations end up at 600 million, so the actual amount requested is at least 700 million won.
The current Korean Starcraft 1 eSports market still needs to grow before thinking about income structure, and requires a lot more investment.
While the proleague has accumulated a deficit of 670 million won over the 3 seasons, it is operated by broadcasting license fees and the organization fee. Furthermore, the broadcasting stations' individual leagues are continually operated despite that they are barely avoiding the deficit. Despite all of this, the negotiation team has announced that we are willing to pay an affordable amount of approval fee many times.
The current Korean Starcraft 1 market needs to have a safer environment, and so all income related to Starcraft 1 is currently being reinvested into the scene.
KeSPA and the Progame teams, through this negotiation process, hopes to establish a clear foundation regarding the rights, and works hard to create a positive result during the negotiation process.
Source: http://fomos.kr/board/board.php?mode=read&keyno=111745&db=issue
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