Losing Money to Be a Tycoon

Chapter 699: Esports Division

Zhang Yuan’s eyes lit up at once. “Boss Pei, please give me more details!”

Pei Qian sipped his tea and organized his thoughts.

“First of all, we have to provide a standard form contract for all clubs and esports athletes. At the same time, we should strictly prohibit dual contracts.

“A standard form contract can be a short-term or a long-term one, but the parties would only be allowed to edit basic content like the duration of the contract, the damages for breach of contract, the transfer fees, and remuneration. They would not be allowed to impose strange restrictions or conditions upon the members.

“Unclear terms like ‘members must cooperate unconditionally with the club for business operations’ must be specially prohibited, and we will have to make it clear.

“The clubs may conduct business but only under our supervision. They cannot operate without boundaries or attempt to bully the esports athletes.

“On top of that, during the transfer season each year, clubs and free candidates may be allowed to interact and make promises without any restrictions. However, they would be prohibited from entering contracts in private. Before signing any contracts, we will arrange for the various clubs to bid for free players through a unified bidding system.

“During bidding, clubs would be allowed to express their intentions and clarify their preferred duration of the contract, damages for breach of contract, remuneration, additional welfare benefits, and so on. For example, they could stipulate the amount of time that the members would be on stage for.

“Upon understanding the clubs’ intentions during bidding, we will allow athletes to decide which team they want to join. Both parties can only formalize and sign a contract if they choose each other. The clubs must not back out on any of the promises made during the bidding period. I will personally supervise this.

“Lastly, when a conflict arises, both parties must allow us to mediate between them. We will be mediators and ensure that both clubs and athletes compromise. A solution that satisfies all three parties would be agreed upon.

“The DGE Club will attract freelance players on the basis of these principles. If the members leave during the contractual period, they would only have to pay the lowest transfer fee or damages based on current standards.”

Zhang Yuan was stunned. “Boss Pei, isn’t that a bit idealistic? It doesn’t sound very practical, does it?

“What if the clubs don’t accept our standard form contract? What if they create dual contracts in private?

“What if the clubs go back on their word after expressing their intentions?

“The contracts signed between players and clubs would be legally binding. Once conflicts arise, the clubs would have full power to bypass us and go to the courts to settle their disputes. We won’t be able to do anything if that happens.”

Pei Qian smiled. “That’s easy to handle.

“We can enter an agreement with clubs from the beginning, stipulating that if they break any of our regulations, they would have to pay a fine and be suspended from joining competitions.

“If the clubs do not accept our supervisory powers, they would not be eligible to join the GOG league. They can withdraw if they want, but we would act as intermediaries to buy their GOG teams and sell them to other clubs that are interested in entering the GOG league.”

In other words, clubs would be free not to accept DGE’s supervisory role, but DGE would then leave them out of the league altogether.

Clubs would be free to participate in other esports events, but their GOG teams would be bought over and sold to other clubs. They would be prevented from suffering any material loss, but they could forget about entering the inner circle unless they submitted to the supervision of DGE.

As for why Pei Qian was putting such rules in place, there were three main factors.

First, insisting on standard form contracts and forbidding dual contracts or additional terms was aimed to prevent the clubs from resorting to small tricks.

Many clubs offered sky-high prices, not because they thought the athletes were worth sky-high prices, but because many traps had been set.

For example, one of the most common phenomena was clubs and livestream platforms splitting the payment with athletes. In actual fact, the athletes would be forced to stick to certain requirements for their livestreams. That was akin to clubs and livestream platforms overdrawing on the athletes’ future commercial value.

It may seem like the athletes are earning profits, but it would not be true.

Still, the transfer fee would be raised, and the DGE Club would still earn much more money selling each athlete than it had before. That would be too unbearable.

Thus, if everyone resorted to fewer tricks and acted more sincerely, the high transfer fee would only sound pleasing to the ears. In reality, it would achieve no effect.

In addition, the DGE Club would only agree on the minimum transfer fee payable, which would minimize any income generated by DGE.

Second, establishing a regulatory authority like that required a lot of manpower and daily expenses. At the same time, the plethora of rules and regulations would serve to dissuade certain clubs from taking part for sure.

It would be easy for any club that refused to accept the rules and regulations to withdraw. Pei Qian would pay for their GOG teams to prevent them from suffering losses. All of their investments would be covered by him.

However, it would not be as easy for them to re-join the league.

Pei Qian could not ask for anything more than to be able to spend a huge sum of money on buying those GOG teams over.

Last, Pei Qian did indeed have intentions to regulate the industry and protect the athletes’ rights.

Without proper supervision from the higher authorities, athletes would never have equal bargaining rights as the clubs. That was because they would not have the same amount of say.

This could be likened to ordinary workers and companies. Most of the time, they would only be able to vote using their bodies. They could choose to work in what seemed to be the best company, but they would not have any actual bargaining power against the company as well.

Only rare, talented, outstanding, and irreplaceable people would have such power.

Since both parties have unequal bargaining power, the balance would inevitably tilt towards the one with a bigger say—unless the authorities would do something to maintain neutrality.

Think about a fight between a boxing king and an ordinary person. Assuming that neither party was at fault, the absence of a neutral third party regulating the fight would be akin to sending the ordinary person to his death.

Thus, Pei Qian had to step in as the regulatory authority and protect athletes’ rights objectively. Still, that did not mean that he could exploit the clubs. Instead, it only meant that he had to remind the clubs not to be insatiable and squeeze athletes dry in the process.

Transfer fees and damages that belonged to clubs should be fully paid. Clubs should also be awarded the necessary commercial contracts, popularity, and influence. The only catch was that they could not take advantage of loopholes and do whatever they pleased.

Of course, Pei Qian could recognize the spirit of contracts. However, there would be two preconditions: First, the contracts had to be fair. They could not be slave contracts containing unfair terms, and they could not be a means of exploitation of the other party. Second, recognizing the spirit of the contract did not mean that contracts could not be violated. Instead, it meant that the consequences of breaching the contracts had to be followed through with.

In short, Pei Qian’s rules and regulations would earn DGE less in transfer fees and dissuade clubs from investing resources and capital. If clubs withdrew, Pei Qian would even be able to spend a sum of money buying their GOG teams over. Didn’t that sound perfect?

What’s more, he would have to spend money on the daily operations of the regulatory authority as well. It did not sound like a bad thing to hire more people and support them. That would allow Pei Qian to distribute more salary after all.

Zhang Yuan had already recorded everything that Boss Pei had just said on two pieces of paper.

After scanning the rules and regulations once more, he still felt uncertain.

Was it feasible?

None of the major leagues in the world had done something like that before.

The reason was simple. They either did not dare to or were unwilling to fall out with major clubs.

Major clubs brought in fans, attention, and funds for the league. To be fair, certain competitions were popular because of the joint efforts of organizers, sponsors, clubs, professional players, and audience. The lack of any one of those stakeholders could cause everything to go awry.

That was why, many times, even though organizers had the means to; they would not dare to offend major clubs. Even if certain clubs exploited their players and as long as they would not ignite too much public anger or resentment, the organizers would likely punish both parties equally without considering guilt.

After all, in most cases, players could be replaced and sacrificed. On the other hand, the loss caused by the departure of a major club would be difficult to make up for.

On the other hand, the rules and regulations that Boss Pei was setting were skewed against the clubs. Certain clubs would be unhappy for sure.

The result of that would be to break up and part ways because Boss Pei was not one to compromise or be threatened.

Zhang Yuan could vaguely guess from Boss Pei’s attitude that he really did not care for the resources that the major clubs had!

After a moment of silence, Zhang Yuan said, “Boss Pei, on an emotional level, I support your suggestion to supervise the league. After all, nothing can be accomplished without proper rules. Good competition can only take place after the league has been legitimized and regulated.

“However, imposing such strict and controlling measures would drive many clubs away. Weighing the pros and cons... would it really be worth it?

“If the clubs are driven away, the entire league’s funds, popularity, and attention could be affected. If half the veteran clubs leave, we could lose far more than we gain. What would we do then?”

Pei Qian sniggered. “Of course, it’s worth it.”

Zhang Yuan remained silent for a moment and then nodded. “Alright.”

Since Boss Pei sounded so sure, he must have had a goal for the longer term. Thus, Zhang Yuan decided to stop questioning him.

“Boss Pei, what would we call the new regulatory authority?” Zhang Yuan asked.

After some thought, Pei Qian said, “Let’s call it the Esports Division. We can take this chance to set up GOG’s Professional League, GPL, as well.

“The few clubs that we have now can have priority to enter for now, but they must be willing to accept our rules and regulations and submit to our supervision.

“As for the scheduling for the clubs... we can think about that once the new division has been set up.”

Zhang Yuan nodded. “Alright, Boss Pei.”

After sending Boss Pei off, Zhang Yuan returned to the conference room and read his notes from beginning to end once again. He wanted to guess Boss Pei’s intentions.

For now, what confused Zhang Yuan the most was Boss Pei’s reply: ‘Of course, it’s worth it.’

The first priority for the esports industry was to expand as much as possible.

Although GOG’s international invitational tournament had garnered a lot of attention, anyone with discerning eyes would be able to tell that there was still much room for improvement.

There was much more to be done in the future.

Boss Pei had already said that he wanted to set up GOG’s Professional League, GPL. Obviously, he had intentions to increase the scale of that esports event.

However, the problem was that the strict rules and regulations he was going to impose on clubs would directly contradict that goal to a certain extent.

How exactly was Boss Pei calculating his moves?

Zhang Yuan began to analyze each one of Boss Pei’s rules carefully.