Pirated Esports Apparel and Merchandise Threaten Organizations’ Bottom Lines

With more people stumbling upon esports and gaming as an entertainment medium, due in large part to the absence of the more traditional forms of entertainment now closed down due to the COVID-19 pandemic, there was no doubt that some would fall in love with the scene and become fans. And naturally some fans like to show their appreciation and allegiance by showing off their favorite team in the form of apparel such as jerseys, sweatshirts, hats, and more. But unlike traditional sports leagues, some folks just don’t know exactly where to go to get esports team merchandise and there are some out there that will sell you that merchandise who have no relationship to the team–meaning the team gets zero proceeds from the sale.

In Trent Murray’s piece for the Sports Business Journal earlier this week, he noted that Andy Miller, founder and co-ceo of NRG (who happens to also be the co-owner of the Sacramento Kings), was unhappy after he noticed that his esports organization’s apparel was being sold on Amazon without his knowledge. After Miller lambasted Amazon via Twitter, other owners came forward lamenting this illegal practice while sharing their thoughts with The Esports Observer on how this type of theft can affect the burgeoning esports ecosystem.

In today’s esports ecosystem, there are some very different approaches as to how teams generate revenue. However, the reality is that to one degree or another, the merchandise stream of revenue is pursued by every organization in the space. The organizations most affected by the illegal sales of merchandise on merchant sites such as Amazon and eBay appear to be those in their infancy and established brands with a large following.

Carlos “Ocelote” Rodríguez, owner of G2 Esports,  aligns with Miller’s assessment in regards to places like Amazon not doing enough to thwart the practice.

“It truly sucks, but it mostly sucks for the top clubs. Nobody Googles apparel for unknown teams. So ultimately, the top five esports brands worldwide are losing tens of millions of dollars off these sites,” Rodriguez said. “It should really be illegal. They [merchants] simply say, ‘Yeah, if you report them, we will take them out,’ but they should already be more proactive in only allowing verified vendors or brands to register on their site without being a vendor just to ensure similar logos can’t be sold there illegally. We’re frustrated, what can we do?”

Last year federal agents confiscated more than $123M USD in counterfeit fan apparel and merchandise before Super Bowl LIV which consisted of gear featuring the Kansas City Chiefs and San Francisco 49ers logos. It looks like esports is catching up, but not in a positive way.

“Merchandise is a key revenue stream for esports teams and players,” Founder and CEO of Cloud9 Jack Etienne told TEO.  “The sales of unlicensed apparel has a direct negative impact on the teams and players.”

Etienne makes note that some players have it written into their contracts that they would receive a certain percentage of proceeds from jerseys sold that bear their name. This essentially is theft, taking money out of the pockets of both the organization and the player. 

While esports has shown it can grow despite the pandemic, the fans who are buying apparel are usually those that know where to go–the organization’s web site. However, those who are running esports organizations know that it’s just a matter of time until the genre becomes popular to the point that widespread sales of counterfeit items is a regular occurrence. 

“Triumph has not seen a lot of that happening to us so far.  For the most part the digital fan art that we’ve seen is mostly complimentary, and helps build our brand,” Scott O’Leary, founder & CEO of Triumph Esports said. “I have not seen anyone try to sell actual merch using our IP as of yet, but if you are an org like 100Thieves or FaZe Clan selling merchandise at scale, I’m sure that knockoffs would have a significant impact on that business.”

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