Prize money, eSports, Lannisters - Page 9

On November 04 2011 12:16 sougamiso wrote:
I'm not very familiar with the business side of e-sports. But I've been involved in managing prize winning competitions and promotions in dozens of countries for several years and I know more than most people do about the commercial and legal side of this. Prize winning competitions are a huge industry and in almost every country on earth there is precedent, industry practice and legislation/regulation that deals with these issues pretty well, so I'm surprised that the e-sports businesses do not (and are not forced by regulation as they should) follow the same ways.

1. There is no country in the world (at least none in the "developed" world) where it's legal to have a competition that promises prizes without issuing a legal document called Terms & Conditions that is available to all participants prior to signing up for the competition. This document should define exactly when and how prizes will be paid (as well as any taxes applicable on the organizer side, and exclusions / reasons to be disqualified from receiving the prize) You don't need to invest in a lawyer to have this enforced; a simple complain/notification to the relevant authority will result in the state going after the illegal competition without any expense on the player's side

2. In most countries the law has restrictions about the payout process; how it is done, the maximum period allowed to deliver prizes, etc. 1-3 months periods are typical. Again, the state will automatically chase after irregularities with this, if someone files a complaint

3. In many countries the organizer is obliged to provide the prizes in advance of advertising the competition, either in the form of a deposit in a trust account or in the form of a bank guarantee - usually these are issued towards a regulatory authority, the ministry of finance or an appointed organization that supervises such processes.

4. Brands/sponsors are not unfamiliar with the idea of fronting prize money. In fact, when a brand sponsors a competition they would often ask the organizer for guarantees or other proof that they can make sure everyone is paid out on time. Simply because a payment fiasco can do 10 times more damage than the positive marketing they are hoping the sponsorship to create. Often a complaint on the sponsor's marketing department (especially with the silent threat of making a fuss about it on social media) should be enough to create pressure from the sponsor's side for timely payments

5. Brands don't understand e-sports very well because it's not very well established. They don't necessarily know which tourneys are the safest, most diligent ones. They probably don't realize the risk they're taking by putting their name (and money) behind unprofessional organizers. A community rating/transparency system that would offer this information to sponsors would not only help more sponsors make good decisions and pour more money on the scene (I'm sure many big companies who have more rigid due diligence processes, are shy to sponsor tournaments precisely because they can't find good information on risk) but it would also set up the right incentives for organizers.

6. The fact that things have been done in a bad way from most organizers for a long time doesn't make it right. If e-sports is going to grow, at some point the community (and the players) should take the hit of closing down a significant number of tournaments (by boycotting or blacklisting them) to let the few good ones flourish. Even if 90% of tournaments went out of business, eventually the value would be recovered, because bad practices and shady reputations are holding the entire scene from becoming a mainstream budget items in big brand's marketing plans.

7. I'd like to note that the total size of prize funds for tournaments in SC2 (as I can see by tallying up the numbers public) is peanuts compared to marketing budgets that big brands have for activities of this sort (below-the-line placement marketing, passion points marketing, etc). But to unlock these budgets, the e-sports scene needs to look like a clean, safe, predictable marketing avenue to the big companies, because that's what they need to get anything done. I don't buy the excuse that sponsors don't pay - I've organized marketing competitions all my life and I know that it's not so hard to get a brand to care for timely payments when they've put their name behind something. That is, if you educate them and if you re professional and serious about what you're doing.

8. We can't expect players to fight these battles as individuals. Even in the absence of a governing body for e-sports we can at least get more transparency, make the information that is available public and organized. I would love to see TLPD or a similar database listing payout records along with results. I would love to see the community create a list of authorities per country that teams can notify when organizers fail to live up to their promises. Others who are more experience than me in community-organizing matters should be able to come up with even better ways to get the people who love e-sports to help clean up the commercial side of it. If we don't, then it will always be a marginal and non-sustainable activity.

This, together with the recurrent contract dramas and unenforcability, are major blockers in the way between hobby and actual commercial industry. But luckily there exists two industries that we can copy practices from to make it happen. For prizes that would be the marketing competitions industry. For contracts that would be the football/basketball industry.