5 Legal Tips for Entrepreneurs Starting an Esports Team

In light of the global expansion of competitive video games, it has become paramount for any entrepreneur or business owner looking to form an esports team or organization to undertake proper legal and business practices. In fact, establishing an esports team is much more than simply selecting a name, designing a logo, signing players, and creating social media channels. Specifically, as a result of the growing economics and income generated by professional esports teams and organizations, many unique legal and business issues arise including those related to proper intellectual property and “brand” protection, ownership structure, and other facets of functioning digital media and talent businesses. Consequently, while there are many considerations for individuals and businesses forming esports teams, this article will explore five important legal tips for entrepreneurs forming esports teams and organizations in an effort to address crucial matters before they become more expensive problems later.

1. Conduct proper brand clearance prior to launching and selecting a team name.

Another paramount consideration for an entrepreneur forming professional gaming organization is the protection of the team’s intellectual property, specifically its trademarks and copyrights. A trademark applies to a particular word, logo, slogan, phrase, smell, sound, or a combination of these, used in relation to specific goods or services. Consequently, there are two separate trademarks in each organization name, the team’s name as well as the team’s distinct logo if one exists. This is true, even if the logo already includes the organization’s name in it.

Prior to selecting an esports organization name and establishing corresponding social media platforms, it is prudent to first conduct a trademark screening search to determine the availability of the name. This search is also utilized to assess the existence of any other confusingly similar marks that may block the esports team’s application. If an owner skips this search and launches the esports organization prior to conducting an investigation into other similarly situated parties and another party already has established or secured rights for a similar name, the fallout can be expensive and disruptive including the organization having to potentially rebrand, secure new social media handles, acquire new logos and imagery, design and create new merchandise, and potentially dealing with legal claims at the same time. However, once a search is conducted and a name is cleared, a federal or state trademark application should then be filed with the appropriate state department or with the United States Patent and Trademark Office (“U.S.P.T.O.”). Additionally, if the team plans to expand into other geographic markets, international trademark considerations come into play, including utilizing the Madrid Protocol to enable U.S. entities to apply for protection in other countries based on an existing U.S. application or registration.

2. Secure proper rights to the logo, jersey, website, merchandise, and other creative assets and designs.

In addition, it is essential for an individual or business forming an esports organization to enter into written agreements with any third-party individual or company that the team works with or hires to create any creative assets. For instance, it is prudent to obtain a written document signed by the third-party assigning any rights including any copyrights to the works provided to the esports team or organization by a web designer, graphic or logo designer, merchandise designer, videographer, photographer, and any content editors including sound, video and photo editors and “clippers.” In these cases, it is crucial to ensure that an esports team obtains the rights to the creation prior to hiring a third party, including ensuring that all the terms of the agreement are agreed to prior to any payment or the work being commissioned. Consequently, the failure of a esports team to obtain the written rights to a creative work, such as a logo or photograph, could impact the organization’s future usage of the work. Generally, the third party, such as the photographer or the graphic designer, owns the exclusive copyright in the finished work unless a signed writing to the contrary exists. Therefore, the third-party, not the esports team, would own the copyright and this party be able control any use of the created work (including commercial ones) which could cause potential issues for the organization wishing to license or otherwise monetize the commissioned work.

3. Properly protect the creative works with copyright law.

In addition to potential trademark protection for an esports organization’s name, there are benefits to filing a copyright application for a particular logo as well as for registering any other created content or original designs or images. While a copyright is automatically obtained in a work upon completion of the original work of authorship when it is fixed in a tangible medium of expression, a formal registration of the materials with the U.S. Copyright Office within three months of public release provides additional valuable benefits to the work’s owner. For instance, to bring a copyright infringement lawsuit when the owner believes that one of their works has been infringed upon, the work must be registered with the U.S. Copyright Office prior to instituting a lawsuit. A valid registration certificate constitutes prima facie evidence of valid copyright ownership in the work after five years. Also, if the owner has filed for registration prior to the infringement or within three months of publication of the work, the author may be entitled to recover actual damages incurred, statutory damages as well as attorney’s fees spent in pursuing the matter. These fees can even exceed the actual damages suffered by the copyright owner. Therefore, the proper usage of copyright law is beneficial to protect an esports organization’s logos, merchandise designs, photographs, videos, and any original artwork or graphic designs.

4. Proper business entity formation, maintenance, and structuring are crucial.

While many entrepreneurs undertake business ventures in a potentially informal matter, such actions potentially create risks and unnecessary exposure and costs that could otherwise be avoided. Accordingly, a business or individual forming a competitive video game team or organization could explore the formation of a business entity to operate and own the enterprise. In fact, a business entity, such as a corporation or limited liability company (LLC), may be created by a team owner. This action enables the esports team to open a business bank account in the company’s name to facilitate the easier tracking and disbursement of the organizational expenses and permits the deduction or “writing off” of relevant, properly documented business expenses. A valid business entity also permits the team to obtain proper business licenses and insurance so that they can operate efficiently while also fielding potential investment. Another benefit of forming a business entity is that such entities can be governed by written contracts (i.e., an operating agreement for an LLC or a shareholder agreement for a corporation) that outline how the entity will operate, including focusing on the split of any profits and losses among its owners. Also, these documents also specify how any management decisions are addressed and how additional owners (and members) can be added or removed. Such documents also list all relevant ownership percentages, management authority, ownership vesting options, approval rights, treatment of any pre-formation IP as well as include information addressing what occurs if an owner leaves, and how future investment would be handled. This document also provides the team with flexibility to potentially bring in outside third-party investors and to utilize other business, financial, and investment vehicles to operate and grow the esports team. For instance, NIP Group’s public listing and later revenue mix are a good example of how quickly an esports business can become a broader platform spanning talent, events, and other commercial lines. Similarly, GameSquare’s 2025 FaZe Clan restructuring highlights how central ownership and control can exist as organizations grow and diversify across different business functions. Finally, esports organization’s Into The Breach’s shutdown following an embezzlement scandal is a reminder of how quickly weak internal controls can turn into an existential problem and how attempting to address issues before they exist is of paramount.

5. Enter into Written Agreements with Esports Team Staff, Players and Coaches.

With the growth of international video game competitions and with the formalization of esports leagues and players associations, the need for proper written agreements between an esports team and any players, coaches, analysts, streamers, content creators, and staff members has grown. In light of the various highly publicized player-team contract disputes, it is important to use formal agreements that outline each party’s responsibilities, obligations, payment terms, and work requirements. While the substance of each agreement differs, esports agreements should clearly address compensation, payment timing, prize money, duties, termination, dispute resolution, transfer mechanics, content rights, and sponsorship obligations (among many other issues) from the outset including whether mandatory arbitration for any contract disputes through organizations such as International Games & Esports Tribunal is required. To properly protect the team owners as well as the talent, written agreements also need to reflect that players and creators are often acting as endorsers, not just competitors which mandates the proper inclusion of Federal Trade Commission (FTC) required social media “disclosures” in any endorsements and sponsored posts . Similarly, Riot Games’ EMEA dispute-resolution system specifically covers issues like unpaid salaries, bonuses, prize money, and transfer disputes, signifying that the proper definition of these important terms should be addressed by entrepreneurs operating professional esports organizations in advance of and to avoid potential issues.

Bottom line

All in all, entrepreneurs and businesses attempting to form an esports team or organization do not need a substantial legal budget to operate properly and legally. Instead, these individuals and companies should focus on ensuring that a proper legal and business base for operation is established including conducting proper brand clearance prior to launch, securing protection and proper ownership of the team’s creative assets, forming an entity that can handle growth and function, as well as using written contracts that properly address key points to ensure that all parties are properly protected and on the same page in relation to the player, coach, and team personnel’s responsibilities. While none of this guarantee’s success, proper adherence positions the new organization in a much better position than trying to address branding, ownership, payment, and corporate governance problems after the team is already up and running.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted.