Faze owner admits that Tfue's contract is 'trash,' claims better deals were offered

The dispute between Fortnite pro Turner 'Tfue' Tenney and Faze Clan has taken an unexpected twist as Faze owner Ricky Banks, who earlier this week was vociferously defending the terms of Tenney's contract with the organization, now says that the deal is "trash." 

Tenney filed a lawsuit against Faze Clan last week, alleging that he's lost out on significant amounts of income because of the terms of the contract he signed. He claimed that Faze takes 80 percent of revenues earned through sponsorships it negotiates on behalf of Tenney, and half of what he brings in through "appearances, touring, and similar activities."   

"That Gamer Agreement is grossly oppressive, onerous, and one-sided," the lawsuit states. "Faze Clan uses its illegal Gamer Contracts to limit Tenney to deals sourced exclusively by Faze Clan and to prevent Tenney from exploring deals presented by others; deals that are potentially superior to deals procured by Faze Clan; and deals that are not saddled with an eighty percent (80%) finder's fee."

In the wake of the filing, Banks said on Twitter that Tenney "makes millions and millions monthly and we have earned $60k from our relationship with him IN TOTAL," and also denied preventing him from seeking his own solo promotional deals. "Tfue is 100% and has been free to make deals on his own, without us being involved at all. We haven't blocked anything," Banks tweeted. "That 20% comes only from the deals we bring him." 

That led Tenney to share a "response" video calling for the contract to be released to the public, so people could judge the matter for themselves. Banks very quickly agreed to do so, although the promise that it would be released "momentarily"—made yesterday—didn't come to fruition. Earlier today he said again that the contract would be made public, but he was no longer defending its terms. 

"Listen obviously Turners initial contract was horrible. Nobody ever disagreed with that. But over the last year we have offered him so many new ones, solutions. 0% splits. Honest and MORE THAN FAIR ways to solve the issue," he tweeted. "AND AGAIN. This was never about money. We never expected this to happen and over the last year have only collected $60k from $300k in brand deals WE BROUGHT HIM. (20%) That's the absolute total. This wasn't about money, ever. Or an unfair contract.

"With all that being said, we had every intention on releasing the contract. I have nothing to hide and I've made the mistake of allowing shit people to run my business. We've solved those issues & are trying our best. The contract was trash. There's no denying that." 

Neither Banks nor Faze have officially released the contract yet, but a copy was leaked to The Blast [confirmed by ESPN] and the terms do seem to be as Tenney described them. Base compensation is set at $2,000 per month, with reviews every six months that can result in either an increase, or a decrease, of up to 25 percent, "at Company's sole discretion." Tenney is also entitled to 80 percent of any winnings he earns, with the rest going to Faze Clan. 

The "other income" section is where it gets interesting: 

• In-game/sticker ("In-Game Merchandise"): 50 percent to Gamer and 50 percent to Company
• Merchandise and apparel exclusively featuring Gamer's personal brand and manufactured by or in conjunction or consultation with Company (after deducting all costs in connection with such merchandise and apparel) will be negotiated separately 
• Brand deals featuring the Gamer that exist on Gamer or Company's content creation platforms (eg. Twitch/YouTube) or social media sites, if the deal is brought to Company by Gamer: 50 percent to Gamer and 50 percent to Company 
• Brand deals featuring the Gamer that exist on Gamer or Company's content creation platforms (eg. Twitch/YouTube) or social media sites, if the deal is brought to Gamer by Company: 20 percent to Gamer and 80 percent to Company 
• Team merchandise and apparel (featuring Gamer or Gamer's likeness), unrelated to Faze Clan merchandise and apparel, manufactured by or in conjunction or consultation with Company (after deducting all costs in connection with such merchandise and apparel): 20 percent to Gamer and 80 percent to Company 
• Appearances, touring, sign-up bonuses, and similar activities and sources: 50 percent to Gamer and 50 percent to Company 

There is also a term in the contract that appears to restrict Tenney's ability to promote himself independently, stating, "Gamer shall actively participate in finding new business opportunities and shall bring all such new opportunities promptly to Company's attention."   

The contract took effect on April 27, 2018, for an initial six-month term, which doesn't seem especially onerous—enough time to be a valuable lesson learned without doing significant damage to his life. But the contract was automatically extended by another 36 months at the end of that period, meaning that he is now locked in until October 2021 under the terms of the deal—and if a different organization makes him a better offer when the current contract expires, Faze has five business days to make a matching offer that Tenney is obligated to accept.

Contracts are complicated and this one is no exception, but based on my reading I'd have to agree with Banks' analysis:

Tenney has not responded to Banks' claim that he was offered better deals, and that Faze "only collected $60k from $300k in brand deals" over the past year, which doesn't fit with the terms of the contract.

If Tenney and Faze are unable to reach an amicable settlement in the matter, the lawsuit could also have far-reaching consequences for esports as a whole: It also calls for Faze Clan, and by extension other esports organizations operating in California, to be regulated under the state's Talent Agency Act, "which protects artists from those like Faze Clan that act as an unlicensed talent agency." If the court agrees, esports teams could be forced to make significant changes to how they handle players and promotions in the future.

Update: Faze Clan has released a video addressing the Tfue contract controversy, saying that it had concerns about the nature of Tenney's deal with the org—a "starter" contract—even before he raised any issues about it. Recognizing the value of its relationship with Tenney, Faze leadership began making efforts to revise the contract. But Tenney's reaction was tepid at best, and eventually he stopped responding to its outreach efforts entirely. 

Faze CEO Lee Trink says in the video that the first revised contract was offered in September 2018, followed by others in January and April 2019. There was also an attempt to work things out in a face-to-face meeting between Trink and Banks, and Tenney, his manager, and his father. On top of that, Trink said that to ensure Tenney knew "that we had his back," Faze did not collect any monies the contract entitled it to, including prize winnings and YouTube revenue, "except for a couple of brand deals" it had previously set up, from which it took 20 percent. 

Trink and Faze member CBass both express a belief that the negotiations went nowhere because Tenney is intent on starting his own competing esports organization, something the organization is understandably reluctant to enable. "Like the Lakers letting Lebron James create a competing NBA team," Trink says. "They would never let it happen, and we should never let that happen."