How COVID-19 Made Esports the ‘Only Game in Town’

Morgan Lewis
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Morgan Lewis

By the second week of March, the National Basketball Association, National Hockey League, Major League Soccer, and Major League Baseball had suspended games due to the coronavirus (COVID-19) pandemic. The good news for those missing the rush from watching a competitive game is that not all sports are suffering from the same challenges. Esports, the now mainstream billion-dollar industry, is on its way to being the most resilient sport during these devastating times.

In fact, well-known athletes from the NBA to the NHL are now participating in the sport that heavily relies on streaming and games often played from the comfort of the living room when more than 90% of Americans are currently under some form of stay-at-home order.

  • Esports leagues are making it possible for professional athletes like NBA star Kevin Durant to raise money for COVID-19 relief charities and fill the sports broadcasting void on television networks like ESPN and Fox Sports.
  • Fox Sports also aired an esports-NFL tournament on March 29, 2020, that featured former NFL pro bowler Michael Vick, among other NFL athletes, playing the popular Electronic Arts football game, “Madden 20.”
  • Time magazine noted that viewership for Twitch, the Amazon-owned go-to site for game streamers, is up at least 30% in March.

However, even esports has an uphill battle to weather the storm brought by the pandemic. For example, the Pokémon Championship Series was canceled and companies like ESL and Overwatch League have moved some arena-focused competitions to online platforms. Overall, many stakeholders - broadcasters, leagues/teams, venue operators, vendors, sponsors and many others - will likely confront a variety of legal issues relating to contracts, insurance, employment, health and safety, sales, and operations. Here are just a few examples:

  • Event cancellations and other disruptions raise several contractual issues for sponsorship, venues, manufacturing, and licensing agreements as well as contracts with athletes. Reviewing contractual provisions relating to warranties, licenses, performance obligations, conditions, enforcement rights and remedies may be crucial during this time.
  • The pandemic may also affect the sale of now limited or unavailable goods and materials necessary to maintain competitions, even those occurring online. Stakeholders involved in the distribution and manufacturing of consumer products for esports may need to establish alternative measures when the supply chain is strained.
  • Reviewing insurance policies is also important for event cancellations and overall business disruptions to determine possible coverage for any unexpected loss of profit due to COVID-19.

Seeking legal guidance can enable esports stakeholders to find unique ways to keep the sport afloat. The sports industry as a whole may find a light at the end of the tunnel through esports, currently “the only game in town.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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