Esports and sponsorship. Mr. Chomiac of Sas had the pleasure of appearing once again on the Lex Inside show. Invited by Arnaud Dumourier, I had the pleasure of answering questions related to the esports sector, more specifically the legal framework for esports sponsorship.
Sponsorship, and more generally, advertising contracts, constitute a significant source of revenue within the esports ecosystem. The significant attendance of esports events, whether in person or broadcast live online, has generated growing interest from advertisers. It is important for industry players to be attentive to the applicable sponsorship regulations when hosting and broadcasting esports events.
Find the full interview and our other esports-related publications.
Economic value of sponsorship in esports
Sponsorship encompasses a variety of forms, including any form of financial support, including the display of logos, brands, products, or advertising inserts, with the sole objective of gaining or increasing the visibility of the company concerned.
Sponsorship, and more generally, advertising contracts, constitute a significant source of revenue within the esports ecosystem. The significant attendance of esports events, whether in person or broadcast live online, has generated growing interest from advertisers.
The specific nature of the organization of e-sports events allows for a diversity of solutions by sponsors offering participation in a championship, a team, an event, developing its championship and derivative products or distributing brand content.
New, more innovative forms of advertising have taken advantage of the highly customizable nature of video games. Riot, for example, created an “SR Arena Banner” feature that allows esports leagues to customize banners within the video game, reaching only spectators and not players.
Similar to the sports sector, there are a variety of players in the esports circuit that are of interest to advertisers in terms of forming promotional partnerships. This can make contract management more challenging.
The image of the esports player: the first representative of brands
As the primary player in video game competitions, esports players enjoy personal visibility at events, whose image can be monetized, similar to those of athletes or artists. It is therefore common for players to be sponsored by brands that are either endemic or non-endemic to the sector. Partnerships can be either one-off or for longer periods, depending on the diversity of activities the esports player may engage in.
However, the player’s image is not necessarily free from exploitation. A large number of competitions, however, involve the player’s participation within a competitive team, structured under the auspices of an esports club. The latter may contractually restrict the contractual freedom of its players when establishing partnerships, particularly in the case of competing brands or those that may penalize the club’s own partnerships.
The image of the player alone or in a team during competitions can then be the subject of competition between clubs and event organizers, tightening the legal framework for advertising partnerships.
Esports clubs: advertising revenues are the majority in the business model
It is clear that there has been a significant shift in the economic model of esports organizations in recent years. These organizations now recognize their inability to base the majority of their revenue solely on cash prizes from competitions. These prizes, being generally rare and limited, cannot cover the significant operating costs of an esports club.
Similar in this respect to traditional sports clubs, a diversification of revenue sources has gradually emerged, based primarily on advertising contracts. To foster these synergies, esports clubs are significantly developing online content creation. The number of subscribers on their various social media platforms, supported by those of their players, encourages advertisers eager to reach video game competition audiences.
The Publishers: original and varied sponsorships
While some advertising is unsuitable for video game competitions because it is too intrusive or penalizes the event—inter-level advertising, rewards ads, and ad-wall ads—others integrate seamlessly, at the risk of potential reclassification as covert advertising. Indeed, in-game advertising is not subject to any specific legal framework, referring to the provisions of Articles L12-1 et seq. of the French Consumer Code.
Presented directly in the virtual environment where the player is playing, these forms of advertising can include, among other things, product placements realistically integrated into the game’s setting, dedicated stores for video game content—skins, items incorporating negotiated promotional elements, etc. Riot, the publisher of the game “League of Legends,” has thus proposed forms of in-game advertising that allow ads to be integrated directly into the content of a video game.
Esports organizers and broadcasters: privileged roles for sponsors
The organizer of an esports competition can be defined as the individual or legal entity responsible for initiating the event and managing all the stakeholders and services involved in its execution. It is also possible to distinguish between a technical and specialized organizer, mandated by the event creator to carry out the video game competition, particularly its logistical aspects.
As such, the creation of an esports event currently depends on three entities, all motivated by the competition’s reach and visibility: video game publishers, player associations for a particular video game title, or third parties specialized in organizing this type of event for the purpose of promoting products or services. Their status, sometimes combined with that of the game publisher, provides the organizer with a considerable amount of physical and online advertising space.
Among the competition organizer’s partners, it is important to be vigilant about their main obligations:
Publisher: Subject to its agreement and its conditions for the exploitation of the video game and the holding of an e-sports competition, the latter may have inserted in the specifications of the competition the obligation or the prohibition of the promotion of certain goods, services or brands.
Sponsors: As part of the promotion of their goods, services or brands by the organizer, sponsors have the obligation to provide content corresponding to the requests of the organizer and its public while indicating an advertising purpose in order to comply with the provisions of the Consumer Code.
Equipment Suppliers: Guarantors of the equipment and stability of the competition, the event’s equipment suppliers are required to provide quality service for the entire duration of the competition and also to indicate that their approach is carried out for promotional purposes.
Merchandising: Vendors present at the event must correspond to the organizer’s partner brands and sponsors, without creating competition or bad publicity.
Esports Broadcasters: How to Integrate Relevant Advertising
Broadcasting video game competitions raises issues common to the audiovisual sector. Intellectual property rights relating to the broadcasting of esports events, primarily held by publishers and, to a lesser extent, by organizers, define the preferred parties for partnership agreements.
Under various names, including exploitation agreements, provision agreements, licensing agreements, broadcast authorization agreements, general representation agreements, etc., the broadcasting of content is subject to strict regulations.
Additional legal provisions, depending on the broadcast medium, are intended to apply specifically in the highly regulated fields of television and radio, involving public and private stakeholders.
In addition to the proposed name of the promotion agreement, its content will include the actual obligations of the parties, particularly regarding the type of content created, the regulation of their intellectual property, issues of ethics, exclusivity and non-competition, and the management of collected data.
Esports Sponsorship – Variety of Contracts
Given the wide variety of stakeholders and the forms that advertising partnerships can take, a wide variety of contracts can be derived. Identifying the parties’ obligations and commitments will guide their classification, ranging from traditional partnerships to more specific or technical contracts such as jersey sponsorship, naming rights, digital or event sponsorship, red carpet contracts, and even modeling contracts.
At a minimum, the advertising obligations of the organizer’s products, services, or brands must be taken into account. The precise clauses and the positive or negative actions are decisive. The sponsor will be responsible, alternatively or cumulatively, for financing all or part of the event in cash or through in-kind contributions. It is also common to see clauses relating to behavioral obligations aimed at the mutual promotion of partners.
The contracts will include important clauses relating to the image rights granted, the duration of the user licenses, any conditions for lending or making products available, potential specifications for the production and distribution of content requested, etc.
Contracts often contain clauses aimed at limiting the exploitation of the players’ and/or club’s image, particularly through exclusivity or non-compete clauses.
With regard to esports players, the conditions of their participation in events and related activities—creating online content, influencing—may bring certain sponsorship contracts closer to influencer contracts, which were subject to specific regulations in 2023 following numerous abuses in the sector.
Esports and advertising: existing advertising regulations
A new sector that has been growing for over a decade, esports was once seen as an opportunity for the advertising industry, interested in reaching an alternative audience close to the sports sector. However, while esports benefits from relaxed regulations primarily guided by the provisions of the Digital Republic Act, advertising law is perfectly applicable to it, with its constraints and requirements.
Advertising is governed by numerous provisions centered around the principles of transparency and message identification, involving the presentation of the price and characteristics of the product, information in French, as well as the prohibition of unfair or misleading practices, particularly in the context of comparative advertising.
Advertising is now a well-established means of monetizing audiovisual content on the Internet. This type of promotion, integrating personalized, behavioral, and/or contextual advertising using various personal data of Internet users, offers a considerable advantage given the much more precise means of measuring Internet users’ behavior, their tastes and preferences, as well as advertising performance.
Recent legislation governing online advertising practices, particularly those of influencers and social media, requires increased attention to the esports sector indirectly associated with these fields in the context of the dissemination of its online content. The conditions for the production and dissemination of publications will require avoiding any form of hidden or clandestine advertising.
Esports and Advertising: Child Protection
Regardless of the advertising method considered, all industry professionals must be vigilant regarding the products, services, and causes being partnered with, with respect to the target or exposed audience. Indeed, the esports audience is characterized by a very significant proportion of underage players and spectators. Therefore, vigilance regarding the additional rules applicable in this area must be observed.
In fact, a large number of partnerships will be impossible or difficult to consider, for example, regarding promotions of gambling, alcohol, violent or pornographic content, firearms, political advertising, job offers, adult or dangerous content, food products high in sugar, salt, or fat, financial services and pharmaceutical products, etc.
Find our other appearances on the Lex Inside show:
Mars 2023 : Quelle protection juridique pour le jeu vidéo?
Mars 2025 : Droit & Cybersécurité des entreprises
