Agent commissions in esport – Attention!

In addition to my article from yesterday here, I would also like to add a small outline to commissions from player 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. It is therefore NOT sufficient to use the text form according to Section 126b of the German Civil Code (BGB), a contract via Messenger, Skype, e-mail or other electronic media would therefore not be effectively 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 permissible for the intermediary to take forward prior decisions or other remuneration for the placement. 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 by the Mediation Remuneration Ordinance and is limited to artists, artists, photo models, advertising types, mannequins and dressman, doppelgängers, stuntmen, disc jockeys and professional athletes. Professional athletes are notathletes right now. 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.