Esports in the off-season – A guide to the League of Legends free agency period from the perspective of team Fnatic
Published 22 November 2018 | Authored by: Ryan Hawkins
The author is part of team Fnatic, an esports team based in Shoreditch, London that competes in the popular game, League of Legends (LoL - produced by RIOT) amongst many other high profile esports. LoL is currently in its off-season, which is an interesting period as (like in many sports) it’s the time during which player transfers and negotiations take place. This year’s off-season is particularly interesting, as it sees the added complexity of taking place simultaneously to RIOT’s extensive franchising and rebranding exercise of the European LoL Championship Series1 (EU LCS - the only RIOT sanctioned European-wide league2). Indeed, RIOT have this week announced3 the ten successful teams that will be permanent partners for the new franchise (of which Fnatic is one). As a result, this off-season looks more complicated and interesting than those in recent memory.
To help shed light on the matter, this article examines the rules and practices governing free agency and player transfers in LoL. It also gives some insight into what might happen given the transition to the rebranded EU LCS.
Background to the off-season and the rules governing transfers and free agency
Esports is still very much in its infancy when it comes to developing procedures for the transfers of players and free agency periods.
Each game differs in its sophistication of when, where and how player transfers can take place. Of the major esports titles,4 LoL, which is now entering into its eighth off-season following the completion of the World Championships, is in the author’s view the most sophisticated as, among other things, it has mandated minimum contract terms for player contracts and off-season dates which teams are bound to follow. RIOT has given such unilateral requirements across the teams to ensure minimum standards for players competing within its sanctioned leagues.
The structure is in the author’s view perhaps most closely analogous to the structure of the U.S. National Football League. In general terms, it has trade and roster deadlines, a period between the season ending and free agency beginning where teams have an exclusive period to negotiate with its pending free agents, and then a set free agent period where the majority of signings and team building is done within 24-72 hours. It is structed this way in particular to allow both the players and the teams a theoretical timeframe after the World Championship where there can be some rest from official play and competition. As well as giving time for teams to have a window to exclusively talk with their players before free agency begins.
The framework is principally set out in in the 2018 Season Official Rules,5 (Official Rules), which contains specific provisions governing free agents and free agency at Paragraph 3.7. There are also a number of additional rules communicated to the teams via their Team Participation Agreements6, many of which are not listed in the publicly available rule book or otherwise found online (as such the author will attempt to explain where appropriate). Together, these rules dictate the dates of the off-season, methods by which players can be contacted and contracted, and dictates clauses which must be incorporated into player contracts (we will examine them in more detail below).
This is technically the second of two transfer windows within the year8, however, it is by far the most important as it is a very rare circumstance for a player to be available in the May transfer window outside of buying out of player contracts from other teams. The three main dates during this second transfer window and main off-season are as follows:
3 November 2018 – the final of the world championships was be played on this day and is likely the first day when every team playing within the sanctioned leagues will be furiously re-negotiating internally to re-sign their players before the free agency period.
20 November 2018 - the official announcement9 regarding the franchising of the EU LCS. It occurred the day before the date of unrestricted free agency, as teams need to know whether they have been awarded franchising before they sign players.
21 November 2018 – the first day of unrestricted free agency. Those players who do not re-sign their contracts with their current teams and are not signed to long term deals become free agents on this date. This is where the rules regarding player tampering no longer apply and free agents may field offers and sign contracts accordingly with any team of their choosing.
Within the Official Rules, Rules 3.7.2 to 3.7.4 also provide framework for an eligibility criteria which players must meet in order for them to be signed by teams. The gist of these rules essentially require that the player is not contracted to another team and that they are a free agent, and that teams are required to send notice to the league where a team picks up a free agent in the form of a Free Agent Signing Approval Request Form.
Important league rules governing free agency
Anti-poaching and anti-tampering
The purpose is self-explanatory and is used effectively as a period where a current team has a built in "right of first refusal" timeframe with their player. This is not too dissimilar to such periods within traditional sports such as the National Football League.
That said, it is implemented in an interesting way. Whilst a team can effectively have an exclusive period to negotiate with their player, other teams may make requests directly to the team with which the player is currently signed to seek permission to also negotiate with the player. However, unless contract buyouts are being agreed, it is not too often that teams will allow another team to freely negotiate with their player without some kind of return for the player’s team. That said, the player’s team are required to notify the player that a team wants to negotiate with them, so that the player knows whether he has a market in free agency before re-signing with his current team.
This is an interesting wrinkle in the framework and is for the betterment of the players: it creates a state of affairs where a player does not feel pressured into re-signing with his current team, because he knows he has a potential market without having to worry about fielding offers under the table and contrary to RIOT regulations.10
RIOT mandates that squads within a region, as determined by RIOT, must be made up of a minimum of 3 members from the given team’s region within the "starting five" of the active roster. As such, only 2 players may be "imported" from other regions. Imported players may, however, gain "residency" within a region where they have played there for 3 seasons11, effectively giving the team they play for an additional import slot. The rules regarding residency can be found at Rule 1.2 of the Official Rules.
RIOT mandated clauses in player contracts
LoL’s Team Participation Agreements (TPA) contain a number of minimum terms relating to players’ contracts which must be included and adhered to. For confidentiality reasons, the author cannot disclose all the minimum terms as they are not public knowledge, but the ones which are public knowledge are as follows.
Ban on non-compete clauses. Straight forward reasoning in that it would be palpably unfair for a player to be refrained from playing the game due to a non-compete clause.
Maximum 3-year contract length. - This one is interesting because it gives both teams and players a reasonable amount of security which they can agree to, without a player potentially being trapped into a long-term unfavourable contract. The RIOT article12 detailing the reasoning for this mentioned a 10 year service agreement having been previously agreed.
Reserve players must have a player service agreement and a minimum compensation. This is an amount which changes yearly and the amount is clearly communicated within each team’s TPA.
No automatic or “renewal by silence” clauses.
Option for Immediate Termination of a Player Services Agreement if the team is removed from the League. This is done to prevent players being locked out of the league and effectively held on ransom where a team is removed from any RIOT sanctioned league.
From the point of view of a team, these are all reasonable requests when you factor in the rate at which the sector is growing, as it helps protect the young players who are signing large multi-year deals. The remuneration alone three years ago is potentially one third of what it was this year, so the protection for the players in that they will have access to multiple top dollar contracts during their career is very good for their own future financial security.
The "mini free agency" which may occur during the 2018 off-season.
RIOT has a minimum contract term as stated above requiring that all player contracts must allow the player to terminate their contract(s) with immediate effect where the team is no longer in a RIOT sanctioned league that is mandated by the TPA. With that in mind, the official announcement regarding which European teams have been accepted into the franchising programme will have created a new set of free agents. Players within those teams will be able terminate their contracts effective immediately due to the mandatory termination clause(s). When this occurs, it will create a new set of free agents of about 30 players who will officially be without a team so that teams can negotiate freely with them.
That said, it is the authors opinion that what will ultimately occur is similar to the situation in North America last year: when the franchising was officially announced, and teams knew they were not attaining franchised status, they mutually terminated their agreements with their contracted players effective immediately so there was no need for reliance on RIOT regulations to take place. This is because the only competing leagues are sanctioned by RIOT directly. By not making the cut, the teams have no league to participate in so have no need for the players.
As this is most likely to occur to some current teams within the EULCS, it is going to create what is essentially a "mini free agency" period where starting calibre players on other teams are going to be free agents. Thus, as no anti-poaching regulations will then be relevant, the 20 or so players effected by this will have been able to negotiate freely with any team, while having to wait until 21 November to sign (like every other free agent). The author expects many of those free agents will have come to terms in principle with multiple teams before 21 November, and will now choose which of the offers they want to accept.
What do teams do during this timeframe?
Whilst the author cannot make sweeping generalisations and state that all teams follow the same process, what follows is what generally takes place in Fnatic coming up to important signing dates. As of the time of writing this, Fnatic’s LoL team is currently preparing for the finals of the world championships, and have three pending free agents prime for re-signing (i.e. existing players whose contacts are about to end). After the finals (and hopefully the celebrations), re-negotiations will take place with the upcoming free agents, as well as any other member who is open to the idea of extending their contract further. If terms can be met, they will be signed onto new agreements prior to the unrestricted free agency date.
In addition to this, the pro-gaming staff will also produce a kind of “big board”14 not too dissimilar to traditional sports, based on other pending free agents. The team may then begin negotiations with any interesting free agents who are not contracted to any existing team, and begin forming the next season’s team accordingly.
From a legal standpoint, what will generally occur during this timeframe in Fnatic is that the template for the contract will be refined and sent out to two different lawyers. One to confirm the contract from a traditional sports law point of view, and one to confirm compliancy with German employment law.15 Although it sounds like a rather easy and straightforward task, this process takes a surprising amount of time purely because of the re-writing and circulating new drafts between counsel. It may seem inefficient at times (and possibly is), but the confidence in contracts can dramatically reduce the amount of time in negotiations when the player’s counsel has a substantial amount of fewer comments than they would before.
With that achieved, a message will be circulated to the heads of departments that legal support will be at a reduced level for a period of 48-72 hours during the first days of free agency so that legal support can be given to the pro gaming department at a moments notice. Preparation will also occur in the days leading up to the date where the legal and pro gaming teams discuss what the deals are most likely to include, and if there is any kind of new wording needed due to terms being negotiated. Such wording will then be written in advance so that as little as possible needs to be done on the day of free agency itself, and that contracts can be sent to player for review within an hour of coming to terms. The key factor at this stage is time. The quicker you can come to terms, review and sign, the better and more stable off-season a team will have.
Post free agency
After the free agency period closes for Fnatic, and the players have been signed after many long, sleepless nights and empty coffee cups, Fnatic will be required to fill out Summary and Eligibility Forms to RIOT to confirm their roster for the upcoming spring season. These forms are essentially a declaration that the RIOT minimum contract terms are met, and that the player compensation is declared, and are signed by both the team and the player. As the players then take the Christmas break off, the support staff will begin preparing strategies and putting in place the logistical plans for the team when they return to Berlin in January 2018. This will include helping players to find apartments if they wish, otherwise making accommodation ready in the Fnatic rented house in Berlin. Further, the content team will look to prepare content pieces with the new players ready for the official roster announcement, content production for various sponsor obligations, and other such general content pieces.
The above process is all in regards solely to LoL, this process is also repeated in varying degrees of complexity across all the other titles which Fnatic has players in across the year. This is one of the reasons the author has such an exciting and stressful job as generally when one off-season officially ends, another is just around the corner, and all the preparation starts again.
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About the Author
Legal Team, Fnatic
Ryan has been working at Fnatic Ltd since May 2015 initially as an intern, and then in a paralegal role whilst studying for his LLB and LLM with Legal Practice at Westminster University. Having finished his masters, he has moved to a permanent, full-time role within Fnatic, is the main post of contact within the company for legal queries, and has worked on some of the highest profile transfers and league forming in esports.