Esports Questions: Where's My #$@%ing Money?

I often see this question asked of esports tournament organizers on social media, but how can players and talent avoid the bad actors in the first place? I have some ideas on the subject.

Photo by Claudio Schwarz on Unsplash

This week I spent an inordinate amount of time looking at tournament organizers from all over the world of varying sizes, trying to figure out how they set up their major competitions and whether they actually have the resources to pay the people involved—players, casters, producers, production, vendors, etc—in the bank.

The short answer is: probably not. From talking to a number of people this week, the smaller to mid-size tournament operators—those in the grassroots and collegiate space—rely heavily on their sponsors to pay for things, which leads to serious problems if there are any delays. The general modus operandi is “when we get paid, you get paid.” The problem with that model is, of course, what happens when that sponsor or partner delays payments for months, or doesn’t pay at all? There’s also a subset of these organizations that are using sponsorship & partnership, and prize pool money to fund their operations in a bit of a Ponzi scheme where they just hope that—somewhere down the road in the future—they’ll land a big enough deal to get caught up with everyone they owe money to… 

Being consistently late on paying out prize money—as an organizer that regularly operates tournaments—is a black mark on their reputation, and even if someone like me doesn’t pick up on it and publicize their issues to the world, those who have participated in it are privately talking to one another and warning other people about their terrible, terrible behavior.

And let’s be as blunt as we can be here: Not paying people for their hard work is a mortal sin in this business and even if you aren’t doing this on purpose, you are incredibly wrong for continuing to run tournaments while still owing thousands, tens of thousands, or even hundreds of thousands of dollars to players, teams, and talent in esports.

On the other hand, it’s important to note that people who participate in tournaments need to be smarter about who they work with. Be an adult. Do your due diligence. Ask questions. Ask for a contract. Get things in writing, establish reasonable terms that are beneficial to both parties, and set deadlines for payments. 

What are the terms of your participation? How much will you be paid? If you are a player or a team, is there a participation fee that takes away from your prize money? How long will it take for you to be paid? Net-30? Net-60? Net-90? What happens if a payment is late and who is the point of contact to make sure the situation is being addressed?

Someone at a high-profile esports organization (whom I won’t name) told me recently in an email, that they have experienced delays in payments that ranged from three months, to six, to as long as 10 months, and these were from brand name, global tournament organizers running MAJOR competitions all over the world. One tournament organizer I will name—PGL—generally pays out net-30, even though the terms of its contract (hey the company also has contracts!) are net-60.

Having said all that, here’s a practical list of things both tournament organizers and participants can do to be as informed, represented, and protected, as much as those things are possible in this rough and tumble business:

Players/Talent:

• Get it in Writing. Always ask for a contract in writing with clear terms that explain the details:

• What is required of you to participate?

• What are the terms of payment disbursements (net-30 days, net-60 days, net-90 days, etc.)?

• What happens if there is an unforeseen delay?

• What kinds of payments (crypto, cash, what kind of currency, etc.) will be disbursed?

• Who is the payment processor (PayPal, Venmo, a Crypto platform, a direct bank transfer, etc.)? 

• Are there any possible complications in transferring funds from one country to another country and whether or not that can cause a possible delay?

• Are there international sanctions on a country, and how does a player that resides in that country legally receive funds (think Russia or Iran as examples)?

Do Your Research:

Always look at what your community says about tournament organizers. Do they have a good reputation? Do they pay on time? Just because a company is larger than life and recognized globally, does not mean that they may have some issues in paying you in a timely manner. Also, ask other people within your ecosystem who have participated in a TO’s event if they have had any issues. Also, be sure to get everything in writing.

Tournament Organizers:

• Inform talent what countries you can legally do business with.

• Provide contracts with clear terms on what the expectation of participation is.

• Include information on how the prize pool is sourced in said contracts to create transparency about the risks of sponsors and partners defaulting on payments towards an unsecured prize pool.  

• Clear time frames in which payouts occur - if it is going to take 180 days, then let talent and players know this ahead of time.

• Tell participants what currency you are paying in. 

• Be transparent about participation fees. If you are offering a $1M prize pool, and the winning team gets $500K but there’s a franchising/participation fee of $50K - $100K, you are not being honest with teams or the public.

• Tell participants about any potential visa or travel issues that could occur (that you can reasonably predict) and whether or not you are providing assistance in these areas for in-person events.

I’m no expert on the ins and outs of tournament organizers, and frankly, you’d be better off asking someone like Richard Lewis (who has been on both sides of the aisle as a reporter and on-air talent), but most of this stuff is just common sense.

Thanks for reading! - James.