10:00 AM PT -- FaZe Clan owner, Banks, has responded and actually admits that Tfue's contract was "trash."
Banks wants to set up a meeting and talk things out.
One of the top esports gamers in the world is at war with his crew over, what he says is, one of the worst contracts in talent history, but his employers beg to differ. Luckily, we have obtained the actual contract and can reveal the details that caused the meltdown at FaZe Clan.
The Blast obtained the Gamer Agreement, from a non-FaZe source, between Turner "Tfue" Tenney and FaZe Clan, which outlines just how much money the gamer has to give up of his lucrative endorsement and tournament winnings.
Tfue claimed FaZe was entitled to 80% of the profits from his endorsement deals, but after the lawsuit was filed FaZe leader, Banks, came out and claimed Tfue was an ungrateful liar. Banks also released information claiming to have collected only $60,000 based on $300,000 of deals with third-party vendors. He also said FaZe has collected $0 of Tfue's tournament winnings.
Banks threatened to release Tfue's contract, but he never followed through, so now we have the actual agreement.
At the crux of the disagreement is the contract, which appears to allow FaZe to come in at any point and collect up to 80% of Tfue's cash as they see fit.
Here's a breakdown of the contract:
The contract is a "Gamer Agreement" dated as of April 27, 2018.
It reads that the "initial Term of this Agreement shall be six (6) months from the Effective Date (“Term”). At the end of the Term, and notwithstanding anything to the contrary set forth in this Agreement (including the T&Cs), this Agreement shall be automatically extended for an additional thirty-six (36) months, provided the following conditions have been met Play on the Team, which includes participating in tournaments and training sessions with the Team and representing the Team, including at events arranged by Company or where Company decides to participate, and provide publicity and promotional services as required by Company"
So essentially, Tfue was automatically locked in for three years with FaZe after his initial 6-months.
The contract states that FaZe will pay Tfue "$2, 000 per month" as a fixed fee, plus "All other income (including, but not limited to, salaries, earnings, fees, royalties, bonuses, share of profits, and gifts, etc.) generated in connection with Gamer’s Services (whether individually or as part of the Team)."
Tfue's main issue with the contract lies in the way his money is split up:
In-game/sticker (creator code income) 50% to Gamer and 50% to Company
Brand deals featuring the Gamer that exist on Gamer or Company’s content creation platforms (e.g. Twitch/YouTube) or social media sites, if the deal is brought to Company by Gamer: 50% to Gamer and 50% to Company;
Brand deals featuring the Gamer that exist on Gamer or Company’s content creation platforms (e.g. Twitch/YouTube) or social media sites, if the deal is brought to Gamer by Company: 20% to Gamer and 80% to Company
All income generated by Gamer from cash prizes (each, a “Prize” and collectively, “Prizes”) won in any Tournaments and/or Matches shall be split (after any payments to the Team coach) as follows: 80% to the Gamer, and 20% to the Company.
The contract clearly states that FaZe Clan is entitled to half of Tfue's creator code income and 80% percent of any brand deals that the company brings to the table. It also makes it clear that even if Tfue brings in the business, the company gets half of the profits.
In the gaming industry, "creator code income" can be astronomical. Our sources say Tfue's income is pushing $10 million dollars per year.
The only 80/20 split where Tfue receives the lion's share is from the prize money earned in tournament play.
We're told Tfue's team has huge issues with these numbers and percentages, especially because the contract entitles FaZe Clan to collect on their percentage at any moment or any time. And, according to the contract, they reserve the right to collect on the largest pots of money earned by Tfue.
Team Merchandise & Touring
The contract states that, "anything (featuring Gamer or Gamer’s likeness), unrelated to FaZe Clan merchandise and apparel, manufactured by or in conjunction or consultation with Company," pays out 20% to the gamer and 80% to the company.
Appearances, touring, sign-up bonuses and similar activities pay out 50% to gamer and 50% to company.
Exclusivity Period / Matching Rights
Tfue has an exclusivity clause in his contract which allows FaZe the opportunity to match any offer made to him by another gaming team, and dictates he is obligated to share the identity of any team making an offer. We're told Tfue and his legal team feel this is an unfair practice.
The language reads, "Gamer receives an offer from another 'Fortnite' team to join such team upon lawful termination of the Agreement by Gamer (“Offer”), Gamer shall be obligated to provide the Offer to Company and the identity of the party providing the Offer, and Company shall have the right to match such Offer during a period of fifteen (15) business days following Company's actual receipt of the Offer (the “Matching Right”). If Company elects to exercise the Matching Right, Company shall inform Gamer within said fifteen (15) business day period, and Company shall, automatically have exclusive rights to Gamer’s services on the same terms as the Offer, as supplemented by all of the terms and conditions of the Agreement."
The contract has a specific termination clause that forces Tfue to sit on the sideline for 6-months and not professionally play video games if he gets fired for cause.
It states, "In the event of termination for a Gamer Material Breach, Gamer shall be prohibited from playing video games publicly (on-line or in live tournaments) or professionally for a period of six (6) months from the effective date of such termination."
The agreement effectively prevents Tfue from earning an income if FaZe decides to cut him loose.
As part of FaZe Clan, Tfue's contract specifically lines out what is expected to remain confidential, and also limits what he is allowed to say to the media.
It states, "Gamer and/or Gamer’s representatives shall not issue any press releases nor make any other statements about Gamer’s Services, the Team, Company, its affiliates, agents and/or employees, or any other party involved in the Services (e.g. the sponsors) in any media (including, without limitation, any online or print communications) without Company’s prior written consent."
If he's found in violation of the confidentiality notice, Tfue can be hit with a fine equal to 125% of his monthly pay. It reads, "In addition to the foregoing, in the event Gamer fails to meet at a LAN Tournament or breaches Gamer’s confidentiality obligations under the confidentiality provisions of this Agreement, Gamer hereby agrees to pay Company a cash amount equal to one hundred and twenty-five (125%) percent of monthly compensation, plus all travel costs incurred by Company."
Tfue and FaZe Clan are already at war, but we're told the fight could become more volatile.
Our sources say Tfue's team believes the whole contract is invalid for several reasons.
First, they believe FaZe Clan is operating as a talent management firm while not not licensed to do so. Plus, the Hollywood standard for most agents is 10%.
Second, they believe several parts of the contract violate laws dealing with anti-competition in the workplace. Non-compete clauses in California are also unique, and are regularly rejected by the courts as unfair business practices.
The biggest issue with the agreement, however, is that it entitles FaZe to millions of dollars in income that would fall under the 3-year extension of the contract. The amount and percentages are the main point of the beef.
The internet has been arguing over whether Tfue's terms are fair, and whether FaZe Clan is entitled to their cut after helping his meteoric rise to gaming fame.
Tfue's attorney, Bryan J. Freedman, tells The Blast, "This is the most unfair contract I have ever seen in almost 30 years of practicing law."
The two sides have not been able to come to an agreement, so a Los Angeles County court will make the final decision.