I’ve been hearing this in a lot of Esports pro teams but can’t really understand how they work, tried google but to no avail. Like what happends if you buy out a player? Who gets the money? Who is paying?
In: 9
Contacts will typically have a timescale attached to them. A player may be hired with a contract that states they will be paid $25,000 a year, and that they will be employed for three years.
The problem comes when one side wants to change this agreement – maybe a team decide they don’t want the player on their side and want rid of them, or the player decides that they would rather play for a different team. In these situations they will be breaking the context they previously made, with one side gaining a benefit, and one side taking a loss, so naturally the losing side will want to say ‘no, we want to finish the contract as agreed’.
The idea of buying out a contract is that the two sides will come to an agreement on how they should break that contact in a way that is acceptable to both sides. Typically by ‘buying’ it from the losing side.
So if a good player wants to leave and join a bigger team, that bigger team may pay the previous team a sum of money equivalent to cover the losses they would expect to make without that player.
Or a team may want rid of a player, so instead of paying them $25,000 for another three years, they may agree to pay them more, but only for the current year (after which the player will be free to start a new contract with another team).
Some of this will be set out in advance in the contracts signed, while since of this will be negotiated at the time.
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