As esports continues to grow, prospective partners are becoming increasingly attracted to forming sponsorships with leading teams and organisations, but must also understand the dynamics of the sector, according to two industry experts.

Discussing law and sponsorships in esports with Kerry Wannanen of Esports Insider, Michelle Tierney, Director of Commercial Partnerships of Guild Esports, and Brian Anderson, Partner at Sheppard Mullin, analysed the legal aspects and dynamics of esports sponsorships.

Touching on the process of striking sponsorship and rights agreements in esports, Tierney argued that the sector is constantly evolving, and understanding the needs of a brand is essential to forging an effective partnership.

“I think some of the key callouts that we have come across are really trying to understand what the brand needs upfront and really trying to work around all the challenges you might face in order to create that rights package,” she began.

“There are rights that are evolving every day in sports, there are new ways of activating, new things that can be packaged up. It’s really about trying to put everything in around the front-end slot and to understand the brand of what their needs are and how you can help solve some challenges that we might come up against to really make sure that you identify the right package, which you can obviously then put into a long-form.”

Discussing the differences between sponsorship arrangements in traditional sports and in esports, Tierney added that traditional sporting sectors have a more corporate outlook, whilst esports agreements involve multiple dynamics and layers.

“I think the biggest difference when compared to a traditional sports sense is that with those deals you deal with rights holders, whilst in an esports especially within an organisation you also deal with humans, your contract rights out to players and to content creators, and with that comes a lot of risk. 

“Brands who are traditionally in spaces that are used to dealing with sponsorship or even those who are brand new to sponsorship, rightly so, they want to be as risk averse as possible when going into a deal with the rights holder. 

“There’s a lot of learning and I think we’re starting to reach a bit more of a flexibility on if this is the demographic that we want to work with and target, there has to be an understanding that this is kind of a different way to approach a contract and the risks that long.”

Building on Tierney’s comments, Anderson agreed that esports sponsorship agreements differ heavily from those struck in traditional sports due to brand identities.

“There are different rights involved in esports, and I think a brand can partner with somebody like Guild and with others to help them understand that,” he remarked. 

“A lot of traditional brands come into these with very traditional ideas about what the sponsorships are going to look like, and maybe don’t even understand all of the opportunities that are available to them and the unique ways to engage with consumers through esports.”

He added: “When you’re doing a deal with Arsenal Football Club, you have a pretty good sense of what Arsenal owns and controls and what you can do with them. But in an esports situation, somebody owns rights in the game, somebody owns rights in the leagues, the players have their own individual rights called publicity rights in the US.”

Source – Esports Insider YouTube Channel