Tfue Lawsuit Against FaZe Clan, #ReleaseTheContract, & Future Impact on the Esports Industry

Turner “Tfue” Tenney, a professional Fortnite player and popular streamer has filed a lawsuit against his own organization, FaZe Clan, according to The Esports Observer. The complaint, first reported by The Hollywood Reporter,  alleges that FaZe Clan, an esports and entertainment organization, violated California law and California’s Talent Agencies Act and restricted Tenney from business opportunities such as sponsorship deals and partnerships.

So, what is California’s Talent Agencies Act? According to Forbes, it is a law that requires someone who is acting as a talent agent to have a license. Artists in the past have been able to use this law to get out of  California management contracts. So, if FaZe Clan is in violation, Tenney may be able to get out of the contract that his legal team claims to be “grossly oppressive,” according to The Hollywood Reporter.

After news broke that Tenney was suing FaZe Clan, many were interested in seeing what exactly the contract between the two includes. Tenney released a video on his YouTube account asking FaZe Clan to release the contract to the public so everyone can understand why he believes it is unfair. He talked about how he was naive when he first signed the three-year contract and is publicly addressing it now to raise awareness and help others in the same situation. Tenney  titled the video, “My Response #releasethecontract” and after it was uploaded, that hashtag was trending on Twitter.

https://www.youtube.com/watch?v=5goOTtfg5xc

Celebrity news site, The Blast, obtained and released the Gamer Agreement contract soon after the video, revealing how much money Tenney was receiving... and how much he was giving up.

“The contract clearly states that FaZe Clan is entitled to half of Tfue’s creator code income and 80% percent of any brand deals that the company brings to the table. It also makes it clear that even if Tfue brings in the business, the company gets half of the profits,” according to an article written by Mike Walter and Gary Trock published on The Blast.

The Blast also reported that Tenney’s legal team took issue with the way the contract splits his money and how it entitles that FaZe Clan can collect on their percentage at any time or moment.

In response to the leaked contract, Faze Clan decided to publicly address the situation themselves. In a seven-minute video posted to their Twitter account, the organization discussed the updated contracts they claimed to have offered Tenney over the past months and highlighted the fact that Tfue was a great asset to their team and brought in more fans for the brand. However, it’s obvious that FaZe Clan’s efforts were to no avail.

Even though this lawsuit is ongoing and has yet to go to trial, it may set a standard for esports business relationship models in the future.

“Until now, FaZe Clan has enjoyed the fruits of this illegal business model with impunity, because no one could or was willing to stand up to FaZe Clan. Those days are over,” writes Freedman in the complaint, reported by The Esports Observer, “Through this action, Tenney seeks to shift the balance of power to the gamers and content creators/streamers, those who are actually creating value and driving the industry. As a result of this action, others will hopefully take notice of what is going on and help to clean up esports.”

“If the court finds that the agreement contains certain provisions that are illegal and anti-competitive restraints on trade, other individuals may also seek to use those findings to void those same obligations under their own agreement, which could have a devastating impact on FaZe Clan,” says Dan Warner, founding partner of RM Warner Law, an internet law firm that focuses on esports legalities.

If you or your company are dealing with contract disputes, shareholder litigation, hostile takeover issues, or esports legalities, the attorneys at RM Warner Law know exactly how to help. Get in contact today.

 

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