CEO breaks down transfer market
Source: https://www.cybersport.ru/blog/post/302846/pochemu-navi-pereplachivaiut-za-igrokov-i-kak-obstoit-situatsiia-s-transfernym-rynkom-v-sng-blog-seo-hr - (30.09.20) (by Aleksei Slabukhin on Cybersport.ru)
Aleksei "Magician" Slabukhin Berezin, CEO of HellRaisers, breaks down some things related to the CIS transfer market in the wake of September’s mass reshuffle. Answering common questions the fanbase has, like “why did that team let this player go or why did they not buy that one?”, Aleksei tries to clarify the processes from the inside to clear up the motivations behind your favorite team’s transfer decisions.
Right now [starting back in September] is the perfect moment to form a Dota 2 roster. Valve did release a compendium this year, but there was no TI. Next year the developers will again release a Battle Pass and again gather prize money. That money could be directed two ways. First - to double The International’s prize pool. Second - to distribute this year’s compendium money across DPC tournaments. Thus there is a reason to gather a roster right now, for it to build chemistry and confidence for the coming season.
It’s possible that many organizations will try to sign two equally strong and competitive rosters, because when Valve finally reveals their plans, there might be problems with available free agents, forcing them to buy players from other teams or taking a risk by signing novices. Right now CIS organizations understand that their current rosters are not contenders for high standings at TI or Majors, so a global reshuffle feels like a logical move.
Forming a competitive roster is difficult, even now. Player options are rather limited. Some CIS players moved to European or American teams, like Artsiom "fng" Barshak [signed by Alliance]. Some players became streamers. The European players on the other hand are in no hurry to move to CIS, and it’s not only the salary and conditions issue, but also the level of competition. Europe has a higher level of competition, so top players move there. Nobody wants to sit on their salary achieving nothing right now, everybody wants to play for a real contender.
I have two minds about premature leaks of transfer related information. On one hand, insiders might play into the organization’s hand. For example, if someone learns that our player is being tested in another team, it might raise some hype around that player and ultimately raise his price. Plus, any transfer rumors improve the team’s media presence, since they all accumulate the community’s interest.
However, there is the flip side to it. If an insider or a resource publishes some kind of leaked information about the moves, they are the ones who end up getting all the media traffic for it. On the other hand, if we were to keep all of it secret, all of the audience traffic will go through our media sources and partners. As a result, fans following those sources will enter our site, see our ads and possibly even click on them after reading the announcement. So this insider thing is a double edged sword.
At some point I even had an idea to drop some interesting tidbits to the public ourselves. That’s how we started my “Insides from CEO” series on YouTube. We try to share news and info in a controlled fashion about our transfer market, to let people know what is going on in the organization.
Let’s assume a hypothetical situation where I’m selling a player to another team and we negotiate about the price. Let’s say I want $5,000, but I’m being offered only $100. However, I can see that this organization just sold their own player for $10,000. Thanks to that I know that they actually can afford the price I am asking.
I will give an actual example without calling names. I know that for a particular player us and Na`Vi were interested in at the same time, both of us were offered completely different prices. Let’s just say that the price tag offered to Na`Vi was significantly larger. As far as I understand, Na`Vi are aware of this kind of state of the market, and other entities are as well. It’s fundamentally obvious that an organization like Na`Vi might get a significantly higher price simply because of their wealth. For example, if our player is being looked at by Na`Vi, then I understand that they can afford to pay my asking price. If the same player is being looked at by a different organization, like Khan for example, then I can’t ask the same price since they simply have no way of paying that much. That’s why I will always look for the org’s budget.
It will be a similar situation dealing with Virtus.pro. When selling them a player, I will keep in mind that they already bought two whole CS:GO and Rainbow Six Siege rosters. So I can tell that they are ready to pay more than the market price. But then again, it’s a subjective opinion and in the end it all will always depend on the way negotiations will go.
Football has a “release clause” term - a price of compensation to pay another club for buying out their player without negotiations. A clause is usually evaluated using a specific formula, which is being checked by the player’s agent. Esports doesn’t have that. In Dota almost no one has an agent, with a few exceptions. Here an org can come up with a clause practically based on nothing, while the players won’t even be bothered to try and figure out the details.
I have a story where I wanted to buy a player, but couldn’t come to an agreement with his org. Then I asked for their clause price. I received a screenshot saying that the clause is decided by the org, while the player gets its percentage. The price in those cases can be simply fantastical. From a legal point of view, let’s assume there is a situation where you can somehow prove that the player’s compensation price is significantly higher than his salary. Then it means you have to go to court. What does going to court mean? A 12 to 18 months worth of trial, at the least. A usual situation - anyone can go to court, but nobody ever does.
CIS organization owners once gathered to discuss the transfer politics. We tried to come to an agreement regarding some sort of a prices fork, a formula to calculate the transfer prices and so on for everyone to have a clear understanding of how much the players can be bought and sold for.
However, we realized that all that will stay on the level of gentlemen’s agreements and everyone will still factor in the buyer org’s budget when selling a player. We simply have no regulatory body, like UEFA in football, to dictate how a price should be calculated, player salary caps and so on. Valve should be the one to perform this function, but they have no desire to.
There is nobody to replace Valve in this regard for the foreseeable future. Hypothetically, let’s imagine that all the transfer business is being directed by Russian Esports Federation. An organization performed a transfer while ignoring the rules, what happens next? REF representatives come to Maincast tournament organizers for example, and say: “This team or player should not be participating in this tournament because they broke the transfer regulations”. Maincast has a tournament coming up, sponsor contracts are already signed, what benefit is there for them to drop a participating team? So the Maincast people simply say: “No. What are you going to do?” Only Valve has leverage here.
However, certain gentlemen’s agreements regarding transfers are still being honored by CIS organizations. I have never had someone trying to take my player without a proper warning. There are situations where players themselves approach other organization representatives behind their owners’ backs. In those situations I simply talk to the team’s managers and the issue is settled. I have also been approached by other org’s CEOs when my players did the same. All of that is being settled without any conflicts though a couple of direct conversations. Esports is, of course, a business. Nobody wants to sour relationships with others, since our industry is rather small and you will have to be working with those people going forward.
However, despite the gentlemen’s agreements, all organizations have a certain fear before transfer deals. What does a player transfer often entails? I pay another organization, they break their player contract and that player signs a contract with me. Here we instantly get concerns from both sides. On one hand, they are afraid that as soon as the contract is broken, we will refuse to pay and the player will go somewhere else entirely. On the other hand, we are afraid that after we transfer the money, the player will refuse to sign our contract.
HellRaisers has a transfer protocol that protects both sides. We use it in every deal and it has yet to fail us. We send it to the other organization’s lawyers and as soon as they approve it, we start the transfer procedure. I can be frank, in my experience there has never been a single scandalous transfer or some attempt to cheat us.
Actually, advice on how to run transfers was given to me by Aleksey "xaoc" Kucherov [former CEO of HellRaisers, currently COO of Na`Vi], he explained all the subtleties and pitfalls of this process. Big thanks to him for that.
I would like to point out that most of the information regarding the transfer processes are openly available online. They will help you better understand motivations of your favourite organizations and see the whole professional scene under a different light overall. However, I will agree that many organizations should be more open with their fans and avoid generic phrases like “our paths diverge” when commenting on selling their player. At the end of the day, esports is like any other media - a gladiatorial arena, where fans demand spectacle. Our goal as organizations is to provide it to them.