Sport is an important economic driver. Its value chain is long: it ranges from the production of sportswear to the transfer and marketing of players to the diverse revenues from national and international sporting events. This applies not only to traditional sports, but equally to electronic sports, so-called esports, which covers the competitive playing of video or computer games, especially on computers and consoles, according to defined rules. In addition to ticketing, revenues are generated from advertising, sponsoring, sports betting and, above all, from the media exploitation of these sporting events on free or pay TV, on online platforms, via mobile services or in digital games. In addition, the construction and maintenance of sports infrastructures are also gaining economic relevance.
Sports law is a cross-sectional matter that touches on a wide variety of legal areas. Not only for athletes, clubs and associations, but also for organizers, sponsors and advertisers, for sports and rights agencies, broadcasters, platform operators or esports organizations, the legal environment along the whole value chain can be very complex. Due to the particular emergence of esports, a number of special legal questions arise.
Media marketing of sports events is done by sports organisers which have either ownership or exclusive-use rights over the dedicated venue. This type of exclusivity, carrying the power to exclude unauthorized individuals or media from the venue and to allow entry subject to specific contractual solutions, serves as an important legal instrument of protection for sports organizers. This scheme is referred to as “domiciliary right”. It creates leverage for the organizer to negotiate exclusive contracts regarding media coverage. The exploitation of sports media rights requires a complex management of contracts, which must be tailored to individual needs of the respective market participants. This usually involves a mix of media law, copyright law, general civil law, advertising law and association law components.
esports conquers new markets with increasing popularity and professionalization. Its continuously increasing worldwide revenue growth is impressive. According to Newzoo's Global eSport Market Report 2022, global revenues in esports are expected to reach 1.86 billion US dollar by 2025. esports has thus transformed itself from a subculture to an independent ecosystem with a multitude of actors.
In contrast to traditional sports, esports has significant structural differences and legal peculiarities. esports has developed globally and largely free of association structures and binding regulations. The result is a complex system of legal relationships between game publishers, organizers of esports tournaments and leagues, players, eSports organizations (Clans or teams) and advertisers. This system poses great challenges for esports actors. Above all, organizers of esports events have a special mediating role. In the absence of generally applicable regulations, the organizer has the task of ensuring fair and undistorted esports competitions. In addition, the independent organizer is responsible for a complex contractual management: Before each competition he must acquire the necessary licences for the exploitation of the video games from the publisher who holds all intellectual property rights of the video game and thereby controls the entire value chain of esports.
Media exploitation of esports events is comparable to classic sports. The legal position of an organizer of online competitions essentially results from the so-called "virtual domiciliary right". Further legal approaches to organizer rights can be derived, if necessary, from defensive claims under competition law or the basic right to carry on the business which it established (company and property rights). Trademark, name and image rights can also be of importance.
In Germany the legal recognition of esports as an independent sports discipline and thus the granting of legal privileges (subsidies, tax benefits, etc.) is still open. It has so far been denied especially by the Deutscher Olympische Sportbund (German Olympic Sports Confederation, DOSB) and at most considered for sports simulations.
Sports law as a legal cross-sectional matter requires competences in a multitude of legal fields. Our consulting services therefore relate, among other things, to binding regulations of sports associations, to questions of national or international arbitration, to the law of associations, to sports-related aspects of media law, to personal rights and copyright law, and to contract law.
Examples of this include advice on the drafting and negotiating of national and international sports broadcasting contracts (e.g. licensing of audiovisual rights and moving image content), in the central and individual marketing of sports events (also with regard to antitrust law), advice on advertising and broadcasting law in connection with media appearances, the drafting of advertising and sponsoring agreements (equipment and sponsoring agreements, naming rights agreements), players’ contracts or advice on the construction and maintenance of sports infrastructures (in particular in the light of European state aid law).
This also includes the creation and negotiation of agency and influencer contracts in esports. In addition to the relevant activities, advice in this area often includes corporate law issues with regard to the establishment or further development of esports organizations (e.g. by taking on investors) and different jurisdictions due to its international orientation. Our goal is to competently support you in the implementation of your individual strategies and business models in analog and electronic sports and to enforce your rights in court if necessary.
In esports we regularly publish on various legal issues. The practical handbook “eSport und Recht” (esport and law), which was co-designed by us and published by our partner Dieter Frey, includes current legal questions from all legal areas of esports.
Our clients include professional clubs of the German Soccer League and German sports associations and organizers, esports organizations (teams), professional esports players as well as media companies (broadcasters or platform operators) or esports organizers who produce and exploit esports events in the media. In addition, FREY provides legal support to eSport-Bund Deutschland e.V.