An Open Letter to SirScoots, the Counter-Strike Players Contracted to PEA Organizations, and the Counter-Strike Community

From Noah Whinston, CEO of Immortals and PEA Player Relations Committee Member, in response to the CSGO player open letter:

TL:DR

1) The intention of the PEA League is to create a better league for both American players and organizations. It is not an exclusive league. The teams will continue competing in non-PEA operated leagues and tournaments.

2) It is not financially viable for organizations to run a PEA CSGO league and also participate in all of the other existing online leagues because of issues with over-saturation.

3) PEA proposed a compromise to WESA to resolve the over-saturation issue, which WESA declined.

4) Though PEA organizations unambiguously have the contractual right to decide where their players compete, the organizations have decided to offer the players the choice to either participate in the PEA league or in the ESL Pro League North American division.

5) Financially, the PEA league offers more money to NA players. The PEA league pays out a guaranteed minimum average of $81,250 per PEA team (prize money + minimum guaranteed profit share), compared to a guaranteed minimum average of $21,428.57 (see http://bit.ly/2hOIE9I) per NA team in ESL Pro League (and a maximum average of $49,857.14 per team if NA teams took all the top 6 spots at the NA/EU EPL LAN final).

6) We sympathize with the players’ sentiments around not feeling more included in the decision-making process and we acknowledge that we could and should have done better. That’s why, in good faith, we’re going to give this decision to them.

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First, I’d like to acknowledge your open letter dated December 21st and confirm that we, all of the PEA organizations, take your concerns seriously and are open to continued discussions on these crucial matters. Your opinions (and those of the community) are important to us.

The purpose of the PEA league is to create a better league for players, fans, and organizations, introducing tangible benefits that go above and beyond the current standard in CSGO. It is not an exclusive league. PEA teams will continue to compete in non-PEA operated leagues and tournaments. We want to establish the framework for a partnership between players and organizations that extends far into the future. There’s still a long way to go before that trust gets built, and we’ve made our fair share of missteps along the way.

Throughout this process, IMT has done its best to keep an open and transparent line of communication with our players, proactively preserving a healthy relationship and avoiding the potential for misunderstanding. I support their right to choose a collective representative in SirScoots, and look forward to working with both our roster and Scott on resolving the issues on the table.

Based on my interpretation of the public and private statements from Scott and the players, I’ve distilled their arguments down to 2 main points:

1) Players have the unilateral right to decide where they compete, regardless of their contracts;

2) Players have chosen to compete simultaneously in both the PEA and EPL.

For both the players and the community, context matters. Tweeting #LCSForever in support of organizations or #PlayersRights in support of players doesn’t advance the conversation unless we build a common understanding of how the ecosystem functions.

Why players don’t have the exclusive right to decide where they compete

Inherently, when players sign with an organization, there has to be a trade-off. At a basic level, players accept salaries as guaranteed money, not dependent on their performance or how many stream viewers they get or how well they sell sponsorships. Because players are protected, they give up some of the profit potential to their organization. Players get paid a salary and have access to housing, travel, and coaching and, in exchange, the team gets to control some of the channels of monetizing the players, like sponsorships and merchandising. That’s how every company, esports organization or otherwise, works.

Nobody forces players to make these agreements. They are free to compete without the financial or infrastructural support of teams and maintain complete control. That also comes with a burden of responsibility, financial instability, and risk that, understandably, few players want to take on.

One of the rights that players give up in their contracts, in CSGO, League of Legends, soccer, basketball, and every other professional team sport, is the ability to unilaterally decide which tournaments they compete in. It would not make sense for a roster of players to decide what tournaments to participate in, while representing the organization and emblazoned with its intellectual property. Perhaps the most surprising part of the player letter is that this basic fact is treated as new information. Athletes have always been part of the conversation surrounding the events in which a team decides to compete, but the power to make a final decision always resides with the organization.

As a result, competitive leagues and tournaments need to create a structure that is beneficial for both the players and the organizations. That’s why many of the larger CSGO leagues, like ECS, take steps to protect not just the financial health of the players via a prize pool, but also the health of organizations by providing opportunities to share meaningfully in the revenue of the league. The PEA was created to bridge the gap: creating a league that was not just better for organizations, because it would allow us to see more financial return from our work, but also better for players, because it would pay out profits to players on top of a high minimum prize pool and provide fringe benefits like health insurance and financial planning.

So it’s not surprising that the feedback I’ve gotten from players about the PEA league has been positive. The problem before us is not whether the PEA league is good for players, but whether a team can reasonably compete in 3 simultaneous online leagues on top of its other responsibilities.

Why the players can’t compete in both the PEA league and EPL

As many have talked about frequently over the last year, CSGO is past the saturation point. There are so many leagues and tournaments that players just don’t have the time to play in all of them on top of fulfilling their streaming and sponsor obligations. Those streaming and sponsor obligations are important because those are the activities that most directly correlate to an organization’s ability to pay player salaries. Burnout risk is at an all-time high because of the demanding schedule. Gameplay quality and consistency are falling as players devote more time to competition and less time to practice. it became apparent that the PEA league is not financially viable as yet another year-round league.

Despite this over-saturation, core needs of players and organizations still go unmet. Players lack access to profit-sharing, decision-sharing, health insurance, financial planning, and other fringe benefits that increase career longevity and provide a more stable situation for players after retirement. The ability of the organizations to have a meaningful say in the future of our brands and to create long-term value is diminishing. The status quo isn’t sustainable.

As a result, the PEA attempted to negotiate a compromise with WESA around ESL Pro League to lessen the problem of over-saturation. This compromise would involve North American teams playing in a PEA league open to all teams, independent of affiliation with PEA, while the EPL would continue to operate in Europe. The top teams from each region would meet in a co-produced LAN final. This system would function identically to the current EPL structure, except with much more prize money available to NA players in the new PEA North American league compared to the pre-existing WESA North American division. I and other owners presented this compromise to our players in conversation and received positive feedback.

WESA declined our proposal, making a counter proposal that reserved the large majority of revenue for WESA member teams.

Based on our direct conversations with our teams and the representations of SirScoots, I believe every author of the player letter wants to participate in the PEA league, as well as EPL. Unfortunately, that option is not on the table. If the only option for the PEA is to lose money by functioning as yet another year-round CSGO league, we’ll instead devote the PEA league’s resources to other game titles where over-saturation is less of a problem.

I sympathize with the players’ sentiments around not feeling more included in the decision-making process and I acknowledge that we could and should have done better. That’s why, in good faith, we’re going to give this decision to them.

We’ll arrange a meeting with all of the players ASAP to discuss this and answer questions, so that they can decide as a unified body whether they want to participate in EPL or PEA next season.

I will personally be available to answer questions from the players, their collective representative, press, and the community. I will make the questions and answers publicly available to the extent that I can, and will be as responsive as possible during my travel today back to the United States from China.

Below, the community can find the direct comparison of economics between the PEA and EPL options.

PEA vs. EPL Economic comparison

EPL Season 5

Pro League offers no representation to non-WESA players in decision-making. The economics are expected to be as follows:*

*The above numbers represent the EPL S4 prize pools plus a 1/3 increase to reflect the change in prize pool from $750K to $1M per season.

Since the EPL prize pool is spread over NA and EU and includes more teams than PEA, player payouts In PEA will be more concentrated than EPL.

The players are likely to earn far more in PEA than in EPL (see below).

PEA Season 1

PEA initially offered $500,000 in prize money for Season 1 (produced in concert with our production partner PGL) and assumed that 10 teams would participate.

As I described above, PEA attempted to negotiate a compromise with WESA. We offered a 3-year deal whereby PEA would operate in NA and EPL would operate in Europe, finishing with a jointly-run NA vs. EU championship (see chart below).

WESA rejected our offer and made a weak counter-proposal — in which they offered to give all non-WESA teams some minor profit-sharing. As a result, we decided to substantially increase the payouts in the PEA league by adding $250,000 in minimum guaranteed profit-sharing to the $500,000 prize pool for a total payout of $750,000 (see below).

**Profit-sharing will only apply to the PEA teams, not all 10 teams in the league.

The addition of $250,000 in minimum guaranteed profits (MG) will provide a strong baseline of compensation for players and a preview of what’s coming in the future when the PEA league is operating profitably. Teams at the bottom will more than double their compensation and even the top teams will see significant compensation bumps.

In addition, players will receive health insurance coverage and financial planning assistance not provided to them by any other CSGO league.