On November 24, 2014, Sony Pictures Entertainment became aware that its company's computer systems had been hacked by a group known as the "Guardians of Peace." In the following weeks, Sony had five of its movies (four of which had not yet been released in theaters) uploaded to file-sharing websites, personal emails from company executives criticizing public figures published, and the confidential medical records of employees released, Additionally, the company received a terror threat surrounding the premiere of The Interview, starring James Franco and Seth Rogen.
Subsequently, Sony cancelled the release of The Interview. (At the time of this writing, the hack has been linked to North Korea, whose government disapproved of the films ending). The full extent of the confidential and personal information obtained about Sony employees is unknown. A full timeline of the hack's aftermath can be found here.
Sony Pictures Entertainment's security breach highlights the increasing importance of a business' cyber security in today's world. Such a cyber attack exposes a business to immense liability concerns. In fact, a class action lawsuit has already been filed on behalf of 15,000 Sony employees who had private information (such as social security numbers) released. A particularly scathing IT assessment conducted by Sony several months prior to the hacking is likely to play a central role in that litigation, as it is arguably evidence of the company's knowledge of cyber security weaknesses. So what can businesses do to protect themselves against some of the legal backlash from such attacks?
Following these four suggestions will aid a business in limiting its liability should a security breach occur. Hopefully, your business is never breached like Sony Pictures Entertainment was.
Recently, strong allegations have surfaced that eSports is suffering from a performance enhancing drug ("PED") use problem. These PEDs are not the steroids and human growth hormones of other sports, but are instead neuroenhancers.
These kinds of drugs (Adderall, Ritalin, Selegiline, etc.) are known as "smart drugs" due to their abilities to enhance focus, calmness, and act as stimulants, which debatably enhance performance in professional gaming. Although there appears to be much confusion as to whether such neuroenhancers are banned from professional gaming (a quick Google search reveals many questions on the topic and few actual answers), if it is banned, there appears to be little enforcement as noted in the link above.
Irrespective of neuroenhancers' status as potentially banned substances in professional gaming, utilizing such substances can have an impact upon a player's/team's existing sponsorship agreements.
As I noted previously, sponsorship agreements generally contain morals clauses. A morals clause allows a sponsor the opportunity to cancel a sponsorship should the athlete or team act in a way that is harmful or damaging to the sponsoring brand. In other words, morals clauses allow sponsors a means of exiting a sponsorship agreement with an athlete engaged in a scandal or otherwise illegal activity.
The use of neuroenhancers in pro-gaming, regardless of whether the substance is banned, can trigger a sponsorship's morals clause in several ways:
Any of the above reasons, which certainly is not an exhaustive list, could also be the cause of a scandal within the sport. Although scandals could be sufficient to independently trigger a morals clause, when combined with any of the above points, a scandal makes it much more likely.
Similarly, a team sponsorship may be impacted by a team member's use of neuroenhancers. Depending on how the morals clause is written, a single team member's actions may be sufficient to trigger the morals clause and permit the sponsor to cancel the sponsorship agreement.
As the eSports industry determines methods for curbing its PED problem, teams should keep in mind that any PED use can impact the sponsorships that they have worked hard to obtain. No team would want to lose its sponsor because a morals clause was triggered in an effort to perhaps gain a competitive advantage. Even worse, future sponsors may be hesitant to sponsor a player and/or their team due to past PED use.
Roger R. Quiles, Esq. is an esports, sports and business attorney based in New York City.