The rise of e-Sports in Brazil - and how football clubs are getting on board
Published 20 July 2018 By: Mariana Rosignoli
E-sports are becoming increasingly popular around the world, and it is no different in Brazil. The industry has grown exponentially, and according to the Brazilian Association of Games Developers (Abragames), more than 61 million Brazilians now participate in online and electronic games.1 A recent infographic from the National Bank for Economic and Social Development (BNDES) estimated that the industry generated 1.3 Billion BRL (34 million dollars) in 2017.2
This blog gives a brief insight into e-sports Brazil. It looks at how Brazil’s football clubs are ensuring that they don’t miss out; and what the key legal issues are for the burgeoning industry.
e-Sports in Brazil
According to data from the Twitch platform in 2016, Brazilians consumed more than 800 million hours of games.3 Brazil has 11.4 million e-Sports viewers and accounts for almost half of the audience in Latin America. In addition, the country is the third largest market for electronic sports in the world, behind only the United States and China, according to data released by Newzoo.4
As a result, sponsors and brands regularly discuss the potential opportunities and try to wrap their heads around the unusual and often daunting dynamics of this new sport. Investors are also looking for a cut of the action, including Brazilian footballing legend, Ronaldo, who started investing in CNB e-Sports Club, a traditional Brazilian e-Sports team.5
Brazil’s traditional football clubs are also trying to ensure they don’t miss out on the opportunities. To date, we have seen three forms of involvement by football teams with games: the creation of their own competitive e-sports team, partnership with an existing e-sports team, and support for a player or players in e-sports football tournaments.
Following the lead of clubs like Paris Saint Germain, Monaco, Valencia and other European teams, some Brazilian football clubs already have e-Sports teams.6 For example, Corinthias has teamed up with Red Canids; Santos has partnered with Dexterity; Avaí has partnered with Jimmy e-Sports; and Flamengo has signed up for its team.
By initiating such partnerships and creating teams, it seems that Brazilian football clubs are aiming to increase e-sports participation and the value of prize funds. The best example is The International, the Dota 2 championship organized by Valve; in 2017 this championship managed to raise just over 24 million USD for the total prize pool. This is far greater than the Copa Libertadores, for example, where the prize money for the 2017 champion was 3 million USD (for the final).7
Another way e-sports is being integrated into Brazilian football is via an annual e-sport tournament called “e-Brasileirão”, which the Brazilian Football Confederation (CBF) has been organizing since 2016.
The e-Brasileirão is a Brazilian Virtual Football Championship played through the Pro Evolution Soccer (PES) game (football video game, produced and published by the Japanese company Konami) that counts on the participation of fans representing the 20 (twenty) clubs of the first division of the Brazilian Championship of the year of dispute.
The championship is carried out in three stages (according to the regulation of the last edition):8
Stage 1: Open Online Selective and Fan Member - Registration is for competitors who meet the minimum requirements described in the Competition Rules.
Stage 2: Classificatory Attendance - eight competitors will be qualified for this stage, with one representing the previous championship and seven best placed in each qualifying held in Stage 1, advancing to the individual finals that will form Stage 2.
Stage 3: The Grand Final in Person - The champion of each qualifying session held in Stage 2 will be invited to Stage 3, with a total of20 (twenty) Competitors who will compete in the Grand Final in face event.
In the last edition held in November and December 2017, 14,351 fans played in the first stage. The final of the championship was held in the auditorium of CBF headquarters in Rio de Janeiro/Brazil and broadcast live by CBF TV. The winner of the competition was the representative of Cruzeiro Esporte Clube, Henrique "Henrykinho" Mesquita, who received an exclusive trophy delivered during the party that celebrated the best of the Brazilian championship of 2017; two tickets for the semi-final phase of Champions League 2017/2018; and classification for the intercontinental stage of PES League Konami.
Aiming to increase PES numbers in Brazil, Konami, announced at the end of 2017 in an event held in Brazil that former football athlete, Zico, would be the new ambassador of the game Pro Evolution Soccer 2018. The hope is that the former athlete will help expand the brand of the game internationally. Zico was established by the company as one of the legendary players of the football simulator.9
Legal issues currently facing the industry
The exponential growth of e-sports in Brazil has generated new legal scenarios for lawyers to consider.
One particular issue is the labor/employment relationship between e-Sport clubs and their players. Many "professional" e-sports players are playing for or affiliated with their teams without a formal employment contract in place. Other players are still legally categorized as children. The discussion surrounding the relationship extends to the training of these athletes, their transfer to other national and international teams, the formalization of team and individual sponsorship, and the use and exploitation of their images.
Another area of interest concerns the commercial competition between television channels in Brazil to broadcast e-Sports. Although not yet comparable to other sports such as football, broadcasters have already met with representatives of the main organizers of championships such as Riot and Blizzard, together with the Brazilian Association of Clubs of E-Sports (ABCDE), to try to guarantee access to broadcasting rights.10
There is also specific national legislation tabled to govern e-sports (which otherwise falls outside of Brazil’s sports legislation). The Project Law Number 383/2017, authored by Senator Roberto Rocha, is currently under consideration in the Brazilian Federal Senate. In essence, it aims to formally recognize, regulate, and promote e-Sports in Brazil. Roberto Rocha's project recognizes the modality as a sport for legal purposes (under the General Sports Law - Law no 9.615/98), guarantees the freedom of e-sports participation, and establishes the objectives of the sport as a stimulus to coexistence among citizens, fair play, the construction of identities, and to fighting hate speech via messages in the games and the development of skills in practitioners.
In following with the worldwide phenomenon, Brazil has been increasingly facilitative of e-sports in it various forms. Commercial activity is rife as, most notably, Brazil’s football clubs, brands and broadcasters, jockey to harness the sports latent potential. And legal activity has risen in parallel, trying to bring structure and fairness to areas such as player employment rights, broadcasting and the overarching regulation of the sport at a national level.
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Mariana is partner at S. Santos Rodrigues Lawyers, a firm based in Brazil. Mariana advises on sponsorship, image rights, employment contracts, investments, disciplinary, athletes taxation and organization (documents) of clubs, leagues and related.