Are Esports Organizations Talent Agencies?

SUMMARY

To the extent that esports organizations procure creative opportunities for their players (especially as individuals), they may have to comply with state talent agency licensing requirements.

THE SETUP

Turner “Tfue” Tenney is a popular professional Fortnite player. Tenney signed a Gamer Agreement with the esports organization FaZe Clan in 2018. At some point, the relationship soured and on May 15, 2019 Tenney filed a petition with the Labor Commissioner of the State of California claiming that FaZe Clan operates as an unlicensed talent agency in violation of California’s Talent Agency Act and requesting that the Gamer Agreement be found unenforceable. Five days later, Tenney filed a similar action in California Superior Court. FaZe Clan filed its own suit for breach of contract with several other causes of action in the Southern District on New York on August 1, 2019 and moved to dismiss the California Superior Court case on the basis that the Game Agreement contained a forum selection clause mandating that disputes be brought in New York. On December 6, 1999, the California Superior Court granted FaZe Clan’s motion to dismiss with the condition that the parties file a stipulation in the New York action that California law would apply to the Talent Agency Act claims (among others).

THE TALENT AGENCY ACT

The Talent Agency Act (TAA) requires talent agents to obtain a license before providing their services. Cal. Lab. Code § 1700.5. Talent agents are defined as individuals or corporations involved in “procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists” and “artists” include actors, actresses and “other artists and persons rendering professional services in motion picture, theatrical, radio, television and other entertainment enterprises.” Unlicensed talent agencies run the risk of having their contracts voided and being forced to pay back commissions.

PLAYER AGREEMENTS

Player agreements generally cover a wide variety of activities, from practice requirements to prize money splits. Esports organizations increasingly include streamers who do not compete in esports events, and whose primary relationship with the organization is through sponsorships and promotions. If a player agreement includes performance in commercial advertisements as an individual and not as a part of a team, as alleged by Tenney, those activities would seem to fall within the scope of the TAA. Depending on their structure, esports organizations should consider registering as talent agencies or partnering with licensed agents.