Agent commissions in esport – Attention!

As a supplement to my article from yesterday , I would also like to add a brief outline of commissions from players’ agents. In the meantime, a number of agencies have also established themselves in esports, for example FIFA players try to mediate to teams/clubs, supervise them as managers and the like. However, these agencies should sometimes provide legal assurance as to whether the contracts with the players are really enforceable by the courts. The lack of recognition of esport as a “sport” sometimes plays a major role here – unfortunately.

The placement of e-sports men and teams, for the purpose of concluding an employment contract, is regulated in Germany in the law of employment services and is therefore strictly limited and regulated. In particular, Section 296 III SGB III applies here.

For example, such a contract must already be in writing in accordance with paragraph 1. The text form pursuant to Section 126b BGB is therefore NOT sufficient; a contract via Messenger, Skype, e-mail or other electronic media would therefore not be validly concluded and a commission claim would NOT be enforceable. Similarly, the exact amount of the intermediary’s remuneration must already be indicated in the contract. If these are missing, claims are unenforceable. It is also not permitted for the broker to accept advance payments or other remuneration for the brokerage. Finally, the remuneration (including VAT) is limited to EUR 2,000.00. Percentage participation is NOT permitted.

The exception to this is only those occupations or groups of persons which are specifically defined in accordance with Section 301. This is regulated in the Intermediary Remuneration Ordinance and is limited to artists, performers, photo models, advertising models, mannequins and dressmen, lookalikes, stuntmen, disc jockeys and professional athletes. Professional sportspeople are NOT esportspeople. Percentage shareholdings can only be agreed with these professions.

This legal situation is the reason why headhunters, for highly endowed jobs, are usually commissioned and paid by employers. Section 296 III SGB III applies only to contractual relations between intermediaries and employees.

The business model of agencies/managers and the like is therefore very limited but not impossible. There are certainly ways of constructing contracts and business processes. One should only really take care not to expect good commissions and suddenly be confronted by a customer, possibly legally qualified, with the perhaps unknown legal situation.

Also, depending on the constellation, something else may apply when whole teams are mediated to organizations. Here, however, it depends on the exact legal structure of the team and the underlying contracts.