In any business venture, contracts are essential to keeping and maintaining partnerships. Keeping the ins-and-outs of what each person’s responsibilities include can help to preserve expectations and keep morale high among those involved. Within the esports industry, however, contracts and agreements have remained contentious. In a previous blog, we had detailed how the esports industry was rocked by a recent lawsuit between Turner “Tfue” Tenney and his former esports organization Faze Clan. Now, Faze Clan has filed a countersuit against Tenney to block his attempts to allegedly disparage and leave the organization.
Faze Clan alleged Tenney violated his contract by disparaging the company and attempting to form a rival esports organization. In addition to these claims, Faze Clan stated Tenny made more than $20 million in streaming, gaming endorsements, and sponsorships, and that he, “shared almost none of this income with Faze Clan.” The business plans to seek compensation from Tenney for its services and unspecified damages under the terms of the contract. Faze Clan is also seeking injunctive relief to prevent Tenney from revealing any confidential information about Faze Clan, disparaging the company publicly, and potentially interfering with its current roster of talent.
In the initial suit filed by Tenney, he claimed Faze Clan failed to pay him his share of brand deal revenue and grossly undercut his earnings. Tenney’s suit also claimed Faze Clan had the right, according to Tenney’s contract, to take up to 80 percent of his earnings in certain situations; this, however, was denied by Faze Clan who claimed it had never done so.
The countersuit against Tenney alleges his actions have resulted in “serious damage,” that could affect members of Faze Clan’s team. In addition to this, the suit also claims Tenney’s goal is to set up a rival esports company, alleging that “Tenney is taking the valuable information he learned from Faze Clan, which he is obligated to keep secret, and using it to create a rival to Faze Clan or otherwise support rival gamers and gaming organizations.”
Tenney is very popular on the live-streaming platform Twitch and is one of the network’s most popular and subscribed-to streamers. He also happens to have more than 10 million subscribers to his YouTube Channel. Tenney initially signed with Faze Clan in April 2018. The contract specifically stated Faze Clan would receive 80 percent of all revenue Tenney made through sponsored video content on Twitch and YouTube. However, Faze Clan’s countersuit claims Tenney experienced a boost in popularity after partnering with them. This rise in online stardom is what helped him earn millions of dollars.
“Faze Clan taught Tenney how to be more than just a skilled gamer,” the countersuit reads. “Faze Clan taught him to be a professional. It schooled Tenney in the business, social media and gaming practices that have made Faze Clan successful. And he certainly has been successful. It is understood that Tenney has earned over $20 million since joining Faze Clan in April 2018, when he was earning virtually nothing.”
While both lawsuits are currently ongoing, it’s clear contracts and agreements within the esports industry will require further regulation and the assistance of experienced legal counsel in the future.
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