The Biggest Concerns for E-Sports During COVID-19

By: Max Budowsky

There is no way around it, COVID-19 has been devastating for sports fans around the world. Some countries are having an easier time adapting sports to the COVID world, like Baseball in Korea and Soccer in Germany. However, there is one category of sport that has had a much easier time adjusting to a socially distanced society: E-Sports. While E-Sports have had an easier time making the pivot to socially distanced competition, it has by no means been seamless.

As with all sports, any major competitive league’s primary focus is ensuring that everybody is playing fair and has equal access to success. While some external factors like sports betting are placing pressure on E-Sports leagues and teams alike to ensure fair-play, internal changes will likely be the most effective. Prior to COVID, most E-Sports leagues hosted live events, with the largest leagues selling out arenas around the world. Most of these tournaments are “offline events,” which means that players, coaches, announcers, and fans are all together in person. This level of control ensures that players are not using cheating software such as “aim-bots,” something that is not inherently true of online play. Most leagues have prioritized fair play and effectively pivoted to online play by maintaining a fair degree of control over team communications and requiring anti-cheat proprietary tools on athletes’ computers. A great example of some of the fair play measures taken by E-Sports leagues are the steps taken by the League of Legends Championship Series (“LCS”). The LCS has required screen recordings of players, in-game communications to run through league-operated servers, and have begun broadcasting games on a delay so players can’t watch competition. Despite E-Sports leagues’ best efforts, surrendering any control over integrity will lead to accusations. A Counter-Strike: Global Offensive (“CS:GO”) recently found two of its teams enthralled in an “episode” when one team, MIBR, accused a player on Chaos Esports Club (“Chaos”) of cheating by using “aim-bots.” In response, BLAST Premier (“BLAST”), the league hosting MIBR and Chaos, has installed proprietary software that it claims is the “most effective anti-cheat tool” for CS:GO to ensure the integrity of its league.

Moreover, offline events provide less concern about anyone losing connection to the game servers and compromising the experience or legitimacy of the match. With COVID making in person tournaments difficult and unsafe for the athletes, one of the most important concerns for E-Sports leagues is how to deal with potential connectivity issues. In June, a major online CS:GO tournament, BLAST, ran in to a connection issue during a match between FURIA and MIBR, two Counter-Strike teams who were competing online. The stoppage in play should have resulted in MIBR, the team who had the technical issue, forfeiting the match. BLAST instead allowed the players to vote on whether the stoppage should result in a loss for MIBR or a replay of the match. The players chose to replay.

Thankfully, most leagues have been able to make simple logistical adjustments to solve bandwidth issues, and the drama of the FURIA/MIBR match was largely non-contentious for the players. The issues were not, however, free from controversy. Online allegations were levied against MIBR accusing them of purposefully sabotaging the connection. While there is largely no merit to that claim, it is something that E-Sports leagues should take note of. Ensuring that play is disrupted as minimally as possible will help boost the legitimacy of these online E-Sports matches.

A final major issue that nearly every E-Sports league is facing is how to continue normal schedules with players being unable to occupy the same space. The Toronto Ultra (“Toronto”), a professional Call of Duty League team based in Toronto, Canada, was preparing to open a brand-new practice facility prior to COVID which forced them to work remotely. Toronto was able to avoid any major problems because many of their players and staff live at the same apartment complex in the city. Unfortunately, not all teams are so lucky. Complexity Gaming (“Complexity”), an E-Sports organization owned by the Dallas Cowboys’ owner Jerry Jones, is facing difficulties with their CS:GO team as they are largely “spread out across Denmark, with one player currently based in Bulgaria.” While certainly a concern, players and staff being separated by COVID appears to be the most manageable issue that E-Sports leagues and teams are dealing with. Dominique Gelineau, the general manager for Toronto Ultra, says that “[t]he biggest challenge . . . has been . . . making sure [our young players are] supported and know they’re not alone in this.” Complexity’s COO echoed Gelineau’s concerns, placing players safety and “mental space” as its top priorities.

With that being said, it has not been all bad. E-Sports leagues have largely been the only sports leagues to not only survive, but thrive in the COVID world. The ESL Pro League, a CS:GO league, had it’s single most-watched broadcast day on its second day of online play, and the LCS has maintained a consistent level of viewership, with its Chinese counterpart seeing a 30% increase in viewership. However, while players and organizations are happy to see the increase in numbers, most still want the virus to go away, and to return to normal.

Esports: The New Frontier of Sports and COVID-19’s Effect on Growth

By: Bryce Wasserman

When traditional sports were paused in March, sports fans across the globe began trying to fill the void that the departure of sporting events left. While some watched marble racing or cornhole, many sports fans switched their focus to Esports games. Esports leagues have been fighting to grow against traditional sports, and this pandemic has been the perfect opportunity to increase their footprint in the sports world. However, COVID-19 has still negatively affected Esports league operations in a similar way to traditional sports leagues.

In a time full of uncertainty and turmoil in sports, Esports have seen a massive growth of viewership. To preface the broadcasting statistics, one must understand the video game market’s size. According to the World Economic Forum, “the global video game market is forecast to be worth $159 billion in 2020.” This is four times larger than all box office revenues in 2019. Regarding Esports revenues, close to 75% comes from advertising and broadcasting. This model has helped Esports earnings skyrocket due to large increases in viewership. Twitch, one of the main Esports streaming websites, experienced an estimated 31% growth in viewership during the month of March. This growth is seen from March 8 to March 22 where Twitch total viewership went from 33 million to 43 million. Many of these viewers are new to Esports, which is not shocking considering many sports fans needed a new outlet when March Madness was cancelled on March 12. The true test for whether Esports are here to stay will be when traditional sports games return on television in the coming weeks. It will be interesting to follow the viewership statistics and whether there is a sharp decline in the coming months. The Esports viewership statistics that are released after traditional sports return will be telling as to how many casual fans Esports can retain.

While Esports have pivoted and put on live events during the pandemic better than any other professional sports league, Esports leagues, teams, and players still face many problems similar to the traditional sports leagues. Esports events have sold out seats in massive arenas across the world. Like all other professional sports, Esports leagues have been unable to host live events and sell tickets to fans. For example, the 2020 League of Legends Championship is supposed to be held at Shanghai Stadium in front of over 56,000 people. This event is now in serious jeopardy. The financial impact in the form of lost ticket and gameday merchandise sales is similar to other traditional professional sports leagues. When Esports events return to live venues, they will have the same return to play issues seen in other sports. There must be protocols in place to protect players, fans, and staff from the virus. This will be especially important due to the intimate nature of these Esports events. For example, fans are placed much closer to the action than other sporting events and engage with players by taking pictures and asking for autographs after the game. Establishing protocols that will ensure safety will be a large hurdle to cross if the goal is to have stadium events soon.

From a legal standpoint, Esports player contracts are incredibly intricate and factor in many of the unique aspects of a player’s life. Sample player contracts place a large emphasis on marketing and promotional requirements. Moreover, teams sometimes choose a streaming service and require players to stream a minimum number of hours in order to stay in the forefront of the industry. This is very interesting because it is a contractual performance obligation outside of playing in a normal event. Imagine the Dallas Cowboys telling Dak Prescott that he must play in the local Wednesday night flag football league during the off-season. That situation would obviously never happen and makes the clause unique to Esports contracts.

Esports have enjoyed a large boost in their viewership since the start of the pandemic because of their ability to adjust and broadcast live events online. The future of Esports will be determined by how the leagues handle their return to play protocols along with their ability to retain newly gained fans.

LPGA v. COVID-19

By: Rivers Ridout

The LPGA Tour finds itself in the same position as most professional sport leagues in the wake of COVID-19—nonexistent. Events like the Honda LPGA Thailand, the HSBC Women’s World Championship, the Blue Bay LPGA, and the Founders Cup are just a handful of the major LPGA tournaments cancelled because of the pandemic. Fortunately for golf fans, in early June, the PGA Tour played its first tournament in months. The tournament was played without fans in attendance but was considered a success with no new confirmed COVID-19 cases detected. This has left many wondering why the LPGA Tour has not attempted to return in a similar fashion.

There are many reasons why we still have not seen the LPGA Tour make a comeback. First, unlike the PGA Tour, a business model without fans would be difficult for the LPGA Tour to afford. According to Randall Mell, “[w]ith LPGA tournaments working under a different business model than the richer PGA Tour and its enormous TV rights package, the prospect of playing without fans . . . is more daunting to women’s events.” A tournament without fans is also against the LPGA Tour’s core values. One of its major goals is to have a positive effect on the tournament site’s community. Chris Chandler, the Dow Great Lakes Bay Invitational tournament director, said that allowing the community to take part in the event is a core value of each tournament. According to Chandler, the Dow Great Lakes Bay Invitational made a $12.7 million impact on the community last year. He stated that if you are unable to achieve your core values like support for the community, “that’s a tough message.”

Another reason for the LPGA Tour’s delayed comeback is various international and domestic travel restrictions. Liz Moore, the Chief Legal and IT Officer for the LPGA, notes that 75-80% of the average LPGA Tour field consists of international players. This is far greater than the number of PGA Tour international players. As a result, the LPGA Tour must deal with significantly more travel restrictions, which makes it difficult to run a tournament. Even if travel restrictions were not an issue, both the LPGA Tour and the PGA Tour must take the health and safety concerns of individual players into consideration. Some players have already decided that even if they are allowed to travel internationally, health concerns and mandatory quarantine requirements that exist in some jurisdictions are too burdensome to make it worthwhile to play in one or two tournaments. When asked whether or not he will be competing in Texas in June, PGA Tour veteran and United Kingdom citizen Lee Westwood stated, “[r]ight now, I won’t be playing in them. Not with having to leave here two weeks before, quarantine, then play the two tournaments.”

The LPGA Tour is hoping to incentivize international players into traveling by increasing 2020 tournaments purses. According to LPGA Communications, the total available purse remaining for the year has increased to more than $56 million. This means that LPGA players would be competing for an average of $2.7 million per event.

Luckily, the LPGA Tour is beginning to see the light on the horizon with the scheduling of the Marathon tournament in Toledo, Ohio, for August 6-9. After approval by Ohio Governor Mike DeWine, the Marathon tournament will allow a limited number of fans so long as they remain socially distanced. LPGA Commissioner Mike Whan stated that the Marathon tournament, in addition to a new event called the LPGA Drive On Championship, will allow the LPGA Tour to test its new COVID-19 protocols before planning future tournaments. The Marathon Classic Tournament Director, Judd Silverman, said that these new protocols would include thermal scanning of temperatures of fans and support staff entering the site, as well as routine testing of all players, caddies, and tournament staff. There are even plans for safe food preparation like allowing only packaged goods to be available at concession stands and hospitality areas.

Both fans and LPGA Tour members hope that the Marathon Tournament will be as successful as the PGA Tour’s restart at the Charles Schwab Challenge in Fort Worth, Texas. Regarding the PGA Tour restart, Tod Archer wrote, “[f]rom a health standpoint, no players, caddies, or staff tested positive for COVID-19. From a golf standpoint, the strong field with the top five ranked players in the world and 16 of the top 20 did not disappoint.” Although several PGA Tour members have tested positive for the virus in the weeks following the Charles Schwab Challenge, it appears that things are headed toward normalcy for both the PGA and the LPGA Tours. Commissioner Mike Whan said it best when he stated, “‘Fluid’ is the word for 2020. Every day you wake up and realize all the things you didn’t know. I do believe we will get started in Ohio in July and then be off and running. But what I believe and what the virus will be in control of in the next 30 days are two different things.”

Surviving the Second Wave: Navigating Cancellations in the Wake of COVID-19

By: Max Budowsky

On March 6, 2020, the first domino fell. South by Southwest (“SXSW”) announced that the City of Austin had cancelled the music festival, scheduled to take place that month, for the first time in 34 years. Four days later, Miami’s Ultra Music Festival announced in an email to ticket holders that its festival would no longer take place in 2020. Some festivals, like Southern California’s Coachella Music Festival or Tennessee’s Bonnaroo Music and Arts Festival, initially postponed their festivals to the fall in the hope that the virus’s impact would be short lived. However, four months later, both festivals have now announced that they will no longer be taking place in 2020. This unprecedented pandemic has decimated live music. Some venues and promoters are getting creative in how they host concerts this year, but with COVID-positive numbers in the U.S. continuing to rise, most health officials do not think large festivals or concerts can be safely organized until a vaccine is developed. As a result of the fact that live music may not return for a year or longer, events companies across the country are grappling with the question of what their financially liabilities are in the wake of COVID-19.

In the months following the cancellation of major national events, “force majeure” has become common vernacular in the entertainment, arts, and sports industries. In the simplest terms, a force majeure event is an unforeseeable circumstance. Force majeure clauses are often included in contractual language to excuse performance by one or both parties in the event of unforeseen circumstances. The language of force majeure clauses varies by agreement, and the specific language included in these clauses is incredibly important. A great degree of deference is given to the language of contracts, with provisions only being canceled by courts or arbiters in rare instances. Thus, language of a particular contract will usually dictate disputes between the contracting parties. When determining financial liability for cancelled events, parties should look for (1) the existence of a force majeure clause (not all contracts will have them); (2) the list of events that trigger the clause; and (3) any lingering liabilities.

If a contract does not have a force majeure clause, the parties will almost certainly be liable for any obligations, financial or otherwise, outlined in the contract. While other doctrines like “impossibility” or “frustration of purpose” may both be used to excuse contractual obligation, both are exceedingly difficult to prove and require potentially expensive litigation. However, it is likely that most COVID 19-related festival cancellations will happen under force majeure conditions.

If a contract includes a force majeure clause, the next thing to look for is the list of triggering events. A triggering event is a condition specifically listed in the contract that will excuse performance under the force majeure clause. At minimum, most force majeure clauses will excuse performance in the case of “acts of God,” war, insurrection, and government regulation. Other clauses may include specific language excusing performance in event of an epidemic, pandemic, or similar health and safety crisis on top of the aforementioned events. In general, the more specific the language of a force majeure clause, the more likely the parties involved will be excused if a force majeure event occurs. If the contract explicitly includes “epidemic, pandemic, or health and safety emergency” in the list of triggering events, it is very likely that both parties to the agreement will be let off the hook. Specificity is key. In the case of unclear or ambiguous language, force majeure protections may be unavailable. Intuition may cause a party to believe that a pandemic of COVID-19’s scale is an “act of God.” But in some jurisdictions, however, courts have held that contagious diseases are not “acts of God” for force majeure purposes.

If a contract includes both a force majeure clause and specifically includes “pandemic” as a triggering event, the next step is to see if there are any lingering liabilities left by the clause. Most force majeure clauses will not excuse payment of expenses already incurred in good faith. Prior to COVID-19, many force majeure clauses for concerts and other live events included a “ready and willing” condition that could expose festivals and concert promoters to incredible amounts of financial liability. The “ready and willing” condition essentially outlines that if an artist is “ready and willing to perform” at the time the event is cancelled due to a force majeure event, the artist is entitled to a portion of their guarantee (usually between 50% and 100%). Without this language, a festival is likely completely off the hook for the full guarantee. It is unclear how the “ready and willing” condition will function with COVID-19. But it is clear that “ready and willing” conditions will be highly scrutinized in future contracts. Live Nation, North America’s largest events company, recently sent a memo to talent partners outlining contractual alterations for concerts and festivals to be held in 2021. The language of the force majeure section of this memo is very specific: “If the artist’s performance is canceled due to an event of force majeure – including pandemic similar to COVID-19 – the promoter will not pay the artist its fee.” Smaller events companies may not have the clout to institute language that is this one-sided, but it is still a good indication of how industry leaders are approaching the post-COVID-19 world.

The most important determination that festivals must make is to weigh the potential negative externalities of actions they take. The entertainment industry is built on relationships. While some larger festivals may be able to frustrate artists, vendors, sponsors, and ticketholders and remain afloat on status alone, the same cannot be said for every festival and venue. Enforcing a force majeure clause that is detrimental to the artist may sour any future relationship between the festival and the performer. Refusing to offer refunds to ticketholders who may not be able to attend in 2021 may lead to a cloud of negative press hanging over the festival. Forcing a sponsor to fulfill an incredibly one-sided agreement may result in a payoff this year but may ruin any chances of working with that sponsor in the future. While it may seem easy to look at a contract strictly to determine where money can be saved and where it will be lost, this binary view of the crisis caused by COVID-19 is shortsighted. The best avenue for any festival, artist, vendor, sponsor, or any other party involved in event planning to take is to find a compromise. These stakeholders should work to provide as many options for ticketholders as possible, take this opportunity to extend contracts with sponsors, and make every effort to sign artists scheduled to perform at a cancelled event to perform in 2021. In the long run, financial solvency in 2020 will not guarantee the long-term security of events.

COVID-19 and the Future of Television Production

By: Jordan Gary

The ongoing global pandemic has adversely impacted the television and film industries in numerous ways. Between reviewing agreements and force majeure clauses, incorporating government regulations and new industry standards into production plans, and reassessing what television and film production will look like in the near and distant future, the entertainment industry must resolve many problems to reduce the severity of losses.

One of the first things companies may do is review the force majeure clauses in their agreements to see whether coverage exists for increased costs or losses in revenue or staffing as a result of COVID-19. If coverage exists, they may have opportunity to get out of agreements, reduce losses, or find remedies such as postponing production.

In order to generate revenue, many companies and projects are moving towards reopening sets and continuing production. Those that do will have to incorporate a growing number of government regulations from both the Center for Disease Control and Prevention (CDC) as well as state and local governments. Additionally, task forces, trade associations, and guilds have released COVID-19 industry-specific safety guidelines. While companies are legally obligated to follow government regulations, many will also implement other guidelines released by these associations and guilds as they are created by industry experts who consider industry practices while aiming to reduce the risk of both disease and liability.

As an example, filmmaker and studio owner Tyler Perry recently announced his plan for reopening Tyler Perry Studios for production in July. The plan requires that all cast and crew: (1) be tested in their hometown and fully quarantine themselves for 16 days prior to traveling; (2) travel to the studio on private flights and using private car services; (3) be tested upon arrival at the studio and sequester until test results are available; (4) remain inside the studio “quarantine bubble” for the 14-day filming period; (5) fill out health survey questionnaires and do temperature checks every day; (6) wear face masks at all times except during hair and make-up or when on camera; (7) undergo continued testing after arrival; and (8) be tested prior to studio exit upon completion of the shoot. Though the plan is likely to prove costly once it is implemented, Perry is taking significant precautions beyond the government regulations to protect his cast and crew, reduce liability, and still provide a steady flow of entertainment to his brand’s faithful consumers.

Perry noted that part of his reasoning in providing such a comprehensive plan for returning to production is because of how Black people are disproportionately affected by coronavirus. Because Perry’s studio is Black owned and has a predominately Black cast and crew that makes media for Black audiences, this is a vital consideration to highlight. It is one that should be seriously considered across any industry that relies heavily on one group of people to continue business, especially as awareness to the ways in which Black people are disproportionately and negatively affected by systemic racism grows in the nation.

However, not every project will be able to take the many precautions that Perry’s team is taking. Perry’s studio compound is built on 330 acres of a former army base in Georgia, which is becoming a “Southern Hollywood” in television and film production, due to tax incentives given to filmmakers in the state. His compound has many of its own outdoor filming spaces, making it one of the largest production facilities in the United States. But not every studio or production company has access to such expansive facilities to create their own quarantine bubble. Thus, many companies are implementing alternatives to some of Perry’s more costly measures.

One example is NBCUniversal. The company is incorporating mandatory face masks, social distancing, sanitizer stations, reconfigured floor plans, and other measures to reduce the possibility of contamination. Additionally, they are limiting on-site access to people who need to be physically involved in production set up—everyone else is scheduled to work from home until and unless their physical presence is necessary on set. It also ran a production drill to work out logistics for every part of the day, including check-in, temperature checks, catering, and shooting scenes. It incorporated both government regulations as well as industry suggested measures in the drill and in plans for resuming production. The noticeable difference between NBCUniversal and Tyler Perry Studios is that NBCUniversal is not planning to have a quarantine bubble for most of its productions.

In addition to these measures, many companies are starting to think about how COVID-19 precautions will shape the future of television and film production. Ryan Millsap, CEO of Blackhall Studios, points to new technologies that he believes will be used on sets beyond the pandemic, such as air filtration systems. He also suggests that more studios will acquire their own space for outdoor scenes like streets or small towns to create more controlled sets rather than filming on location, which increases travel costs and disease exposure.

Changes to production itself are also being implemented, such as virtual meetings on Zoom. These changes eliminate the need to travel between cities and countries to plan and budget in pre-production and edit in post-production. Many foresee these changes extending into a post-Covid world, as they would reduce travel costs, increase flexibility in scheduling, and allow for late changes to editing that otherwise would not be feasible.

Ultimately, as COVID-19 alters the landscape of film and television production for the foreseeable future, companies will continue to institute many of these changes and more to get back on track with production schedules.