Esports is a new and exciting industry. It’s the wild west in terms of opportunity and potential.
However, that also means that there’s some blind sports in the world of competitive gaming. One where awful, poorly thought out contracts are preying on organisations, players and influencers who don’t know their worth.
Evan Kubes is looking to change that.
Evan Kubes is a lawyer and entrepreneur who founded MKM Group, a law firm and management agency that became one of the first in North America to try and navigate the legal aspects of the wild west of esports. Alongside business partners Josh Marcus and Zack Pearlstein, MKM has become one of the industry leaders when it comes to esports law and management.
Kubes, with Canadian and American law degrees from the University of Windsor School of Law and the University of Detroit School of Law respectively, was practicing litigation when he came across an article that dove into the economics of esports.
“What struck me was the business model just seemed really similar to traditional sports: in the sense that you have teams, players and sponsors the key stakeholders driving the industry forward.” Kubes told ggn00b in an interview. “So from there, I’m looking at this thing and I began to wonder if esports had the same kind of infrastructure built in that traditional sports does.”
“When I took a look, I quickly found out that not only was there not a single law firm or agency in Canada representing esports talent, teams, organisations etc…there were really only two on a global level. I saw an opportunity to get involved.
The process of starting up MKM Group was a long one, and for months, Kubes simply networked and connected with the esports communities. Kubes had been a casual fan since his days in law school, but he wanted to lay the groundwork so when MKM got off the ground, the people in the esports ecosphere would already know who he and his partners were.
“Something that people who are endemic to esports are aware of is that it can feel like a very exclusive club, and not in a good way. They are not very welcome to outsiders.” Kubes explains in regards to why networking was so important. “This kind of goes into the whole toxicity aspect of it. The industry can be really, really hurtful towards non-endemics for entering the space in an inauthentic way.”
MKM Group launched at an opportune time: in September 2018, about $170 million was invested in esports worldwide. That number jumped up to about $1.8 billion when MKM launched the next month in October. On top of that, new Overwatch League spots were announced, as well investments from notable celebrities such as Drake and Scooter Braun.
The sizeable increase on money being poured in, the intangible benefits of mainstream celebrity culture getting involved with competitive gaming, and the fact that MKM Group was filling the empty void of law firms in esports, proved to be the perfect storm for Kubes and Marcus: by February 2019, the firm was representing over a significant number of entities in the esports realm including teams, game developers, influencers, and more.
Starting up a new company in an uneven industry such as esports was not an easy sell; Kubes jokes that it took some convincing to get his business partner Josh Marcus to drop his “comfortable corporate law job” and hop onto this esports venture. The driving force behind it, however, was the fact that the industry was overcome with nightmare contracts and disingenuous business practices.
“Just seeing horror story after horror story of contracts gone awry; whether it was tournament organizers not paying out players or just egregious clauses in certain contracts.” Kubes recalls.
“[One early case we had,] the kid was signed to a team for about $200 a month, and the buyout clause was $250,000. That was the price either the kid would have to pay to get out of the contract, or that another team would have to pay if they wanted to sign him. These sort of egregious clauses helped confirm that jumping into the space was the right move”
Due to the wild west nature of esports, Kubes draws influence from traditional sports when helping negotiate contracts. There are some challenges that are unique to the world of esports that Kubes will try to identify so he can help get the best contracts for his clients.
“Something that’s very common in the esports space is that, generally, esports teams will have full control over sponsorship, so individual players and creators [on the team] can’t go out and get their own sponsors. For example, if I’m an organisation and I’m sponsored by Coca-Cola, that means that you, the player, are also sponsored by Coca-Cola. You can’t go out and get a Pepsi sponsorship.” Kubes explains.
“I understand that you want unity across the organisation as a whole, but at the very least, we negotiate for all of our players and creators that they should be able to get their own sponsorships that don’t conflict with protected brand categories. So fine, I won’t go get Pepsi, but I should have the right to get my own [non-conflicting] sponsorships. Most organisations do not allow this at the moment.”
Inevitably, the question had to be asked: legal services are not always the friendliest on one’s wallet, especially for esports, where many players and content creators lean towards the younger demographic. Kubes recognizes this and as a result, MKM offers many pro bono services, including contract reviews completely free of charge for any individual looking to sign with an esports team.
“I think to date, we’ve reviewed up to hundreds contracts on a pro bono basis, as a way to give back.” Kubes says, adding that the philosophy behind how he views his business is that rising tides raises all ships. As more and more limbs of the industry adhere to a higher standard and continue to build the infrastructure, everyone in esports will benefit.
The other major venture that Kubes is involved with is Rumble Gaming, a talent agency that recently partnered up with PlayersTV, a content distribution platform. This offers those associated with Rumble Gaming a platform to collaborate with NBA stars such as Carmelo Anthony, Chris Paul, Dwyane Wade and more.
Getting mainstream star talent more involved with things such as Twitch streaming helps further bridge the game between more casual fans and the more dedicated, hardcore gaming fanbase. But it’s also an opportunity for professional athletes to branch out and develop their brand.
“You see now, younger athletes, particularly NBA players, they aren’t going out to the club; they’re going home and playing Fortnite.” Kubes explains. “We over here at Rumble, we thought ‘why aren’t these guys at least trying to build brand equity in the space and monetize what they are doing?’ As a result, these partnerships started to come about.”
The future looks bright for both MKM Group and Rumble Gaming, and Kubes will continue to raise the bar of esports law and player management in the industry. The best advice Kubes can give to any players, organisations or esports entities dealing with contracts: get council early on.
“I’ll make this very simple: lawyers are very inexpensive in the beginning; it’s when you need them that they become expensive.”
Listen to the full one-hour interview with Evan Kubes here.