Financial Sustainability in Esports through Regulation: Lessons from Football

MGC member Cem Abanazir has been researching the legal dimension of esports for the upcoming Esports Research Network conference.

Despite rapid and sustained growth in the last ten years, the esports industry entered an era where the financial health of esports organisers and teams is less than guaranteed. To address these concerns, Riot Games announced the introduction of regulations concerning team spending in LEC, the League of Legends league covering Europe, the Middle East, and Africa. Following the 2008-2009 Global Economic Crisis, UEFA–the quasi-monopolistic continental football federation in Europe–introduced its financial fair play regulations, which later evolved into financial sustainability norms following the economic downturn post-COVID 19. UEFA desired to protect clubs from bankruptcy by introducing strict norms. The regulations guide not only the clubs’ spending but also their structure and governance.

Cem’s research explores the similarities between Riot Games and UEFA and the Premier League’s approaches to financial sustainability. He underlines the successes and failures of the latter two’s regulation and adjudication of financial sustainability. The inconsistent application of rules, sparing some clubs but punishing others, has drawn criticism from the stakeholders and the public. In his forthcoming paper, Cem will argue that whereas the precarious position of esports within society requires some kind of regulation in its finances, without due consideration and care, the problems indicated above may appear in esports. The paper will conclude that financial sustainability regulations must be consistent and predictable. The paper will also conclude that even if Riot Games reach these goals, the fractured nature of esports governance and regulation means other competition organisers will have to go through the same path.

The Esports Research Network Conference 2024 is an international gathering of esports researchers and practitioners. The Conference will be multidisciplinary, and the paper is part of a session focusing on the financial aspects of esports.

Dr Cem Abanazir is a non-practising attorney-at-law, an academic, and a gamer. His research on esports aims to explain its governance and legal dimensions. He applies theories from various disciplines, such as law, philosophy, economics, and management, to create a coherent account of the current situation and future possibilities.