Monday, April 25, 2016

Platinum Pro Club Changes, Corporate Greed or Legal Mandate? (Both?)

Wizards of the Coast, a Hasbro subsidiary, announced last week that the benefits awarded to its Pro Players Club members would be cut for the 2016-2017 season.  One of the most critical benefits (critical at least to those players trying to live up to the “Pro” in the “Pro Tour” name) was a $3,000 cash appearance fee at each of the four Pro Tour stops for Platinum players.  This appearance fee was slashed by $2,750 and is now a $250 reminder of the good ol’ days.  A replica (not to scale) of a Platinum Player Appearance Fee.

I am in some ways qualified to discuss this from the impacted player viewpoint, and in some ways not.   I am currently one of about 30 players enjoying the $3,000 Platinum appearance fee, but I am not tracking very closely towards Platinum again for the 2016-2017, and perhaps most importantly, Magic is not my day job as it is for several of my friends and colleagues in the Platinum player’s club.  (By the way, the Hall of Fame appearance fee of $1,500 per Pro Tour is also being reduced – it will now occur at a single Pro Tour each year, not every Pro Tour).

I want to first discuss my conspiracy theory (of which I’ve convinced myself, but that’s the easy part), then the decision to cut benefits itself, then the timing of the decision, with an aside on legal action against Wizards of the Coast, a Hasbro subsidiary. 

Is this All Motivated by a Desire to Undermine the Claim that (Some) Players Are Employees?

I don’t think it puts too much tinfoil on my head to note that the timing of this announcement relative to the lawsuit claiming Magic judges are employees of Wizards of the Coast, a Hasbro subsidiary, is interesting.  Also, the announcement itself focused on shifting the goals away from trying to support professional Magic players, who presumably would then be acting in many ways at the direction of Wizards of the Coast, a Hasbro subsidiary, in order to earn a living. 

It is possible that because of the judges’ suit, an employment/labor attorney was forced to come in and look at not just judges but other 1099 independent contractors and they said, “Uh oh, here we have a program with not only the function but even the stated intent of creating professional, full time players.  Who decided the company wanted to do this and what is his or her phone number?”  If that kind of analysis is what led to the decision, a change has to be made and announced, but you can’t announce that you’re attempting to reduce future liability for wages & benefits where you might have past or present liability … so what do you announce? 

Maybe you announce that “The appearance fees we awarded for Platinum pros were meant to assist in maintaining the professional Magic player’s lifestyle; upon scrupulous evaluation, we believe that the program is not succeeding at this goal, and have made the decision to decrease appearance fees.

Instead, we will be increasing the amount of prize money awarded at our biggest tournament of the year: The World Championship.”

You revise the Worlds payout structure to create both a positive smokescreen and a sensible use of the available funds. 

The HOF appearance fee reduction doesn't fit neatly into this story, but that's exactly what they wanted you to think when they came up with it.  Okay, I should probably go to sleep - will write the rest in the morning. 

The Decision to Reduce Appearance Fees

Wizards of the Coast, a Hasbro subsidiary, is the embodiment of everything I hate about corporations.  It has become not just interested in quarterly earnings, but myopically focused on the trailing few quarters and the targets for the next few.   It is the owner and supposed warden of an important part of my life and culture, but it is constantly willing and able to make trade-offs against my interests in favor of its own.  As KFC has protected the institution of wholesome dinner for working families, Wizards of the Coast, a Hasbro subsidiary, has looked over trading card gaming for competitive players.  

This analogy runs fairly deep.  Nobody has to enter a Magic tournament or eat a bucket of fried chicken, and indeed, each year, more evidence emerges that doing neither is a good idea. 

The great bridge in corporate strategy between Wizards of the Coast, a Hasbro subsidiary, and the rest of the worst of corporate free trade is the shortcut.  Why scale tournament prizes to keep pace with profits when you can just keep them flat and show a bigger margin in the short term?  Ask the Colonel: if they keep buying the chicken with the cheap ingredients, why use the healthy version?  Why fund a headline grabbing (by 2001 standards I guess) prize pool in the World Championships by increasing the total budget for organized play when you can just cut some benefits elsewhere?  Shortcuts. 

Wizards of the Coast, a Hasbro subsidiary, claims that the appearance fee was intended to support players making a living off the Pro Tour, but that it wasn’t accomplishing that goal.  It must be the goal that has changed, since nothing in the announced changes helps professional players earn a living from year to year with any consistency.  Wizards of the Coast, a Hasbro subsidiary, is free to change its organized play goals, but all the evidence suggests that they barely know what they want to accomplish with organized play, let alone how to achieve it.

I keep going back to that in my mind: Wizards of the Coast, a Hasbro subsidiary, barely knows what it wants to accomplish with organized play, let alone how to achieve it.  If the goal is to scale viewership and community on Twitch, hire a real team to produce that content and don’t let Blizzard hire Brian Kibler to commentate every major event for your primary competitor.  If the goal is to allow aspiring competitive players to rationalize spending way too much money and an unhealthy amount of time on your products, build trust with those players instead of constantly undermining it (see timing section below for more).  If the goal is to grab a few headlines when major tournaments happen, then try to hold those tournaments on the same scale, relative to your sales levels, as the gaming tournaments it competes with for headlines.

Wizards of the Coast, a Hasbro subsidiary, has always been, and likely always will be, a group of talented game designers plagued by visionless leadership, incompetent and overly risk-averse legal strategy (of course with blind spots where it really might matter like whether Judges are employees – being conservative doesn’t guarantee conservation), sister and parent offerings that lose money (preventing proper reinvestment into what’s working – Magic), and a corporate culture of hindsight bias and myopia that observes growing sales but doesn’t even start evaluating how much more they could have been growing until a competitor comes along and punches them awake. 

When measuring the progress of Magic as a product in Q1 2016, don’t be content to compare to Magic in Q4 2015, show me how you’re tracking against Q1-2016-Alternate-Universe-A -B and -C in which the game isn't inhibited by a failing online version, isn't held back by weak organized play support that doesn't scale with the growth of the game, and/or doesn't advertise via an embarrassing offering on Twitch.  What Magic earns Hasbro is a fraction of what it could earn them, what it should earn them.  Blizzard filling some of the gaps was supposed to wake these people up, but maybe this wasn’t an “asleep at the wheel” situation but a “doesn’t know how to drive” situation.

Long story short, the decision to gut support for the career player itself did not surprise me.  They are entitled to try different incentive structures for their players in the competitive gaming landscape, and they will in fact try new ones.  And they will do it in the same old frustrating way, as an industry laggard on everything but the product itself holding back a leading (and still best) product.  They will continue to succeed, at an immeasurably fractional rate relative to their potential, despite themselves, and they will call it an obvious success.

The Timing of the Decision to Cut Appearance Fees

Even though I got to enjoy $3,000 appearance fee checks in 2016, I earned them in 2015.  The players who earned them in 2016 have had the rug pulled from under them since their investments of time and money in 2016 are unrecoverable and (for now) it looks like the payoff has been nerfed.  PokerStars recently did the same thing to its players, and the backlash there was something Wizards of the Coast, a Hasbro subsidiary, probably didn’t consider or understand.

Here is how it should work: when a company says, “Do X in period 0 and we’ll give you Y in period 1,” the company should budget for Y in period 0 and then keep their promise in period 1.  Maybe accounting rules say you can put Y in the 2016 budget.  Maybe the law says you can break the promise (see below), but this isn’t the way a mature company worthy of trust from its customers should act, if it cares about preserving that trust and continuing to appear mature.

These players deserve the money they earned.  I don’t care if it helps them survive as a professional player or pay taxes on 2016 earnings they used to get by, or if they use it to figure out what to do next with their life, or if they give it to charity like Jon Finkel probably does.  They earned it, it’s their money.    

For the players’ part, when a company acts in an untrustworthy and immature manner, you have to simultaneously adjust your expectations and withhold your full support.  Ask the PokerStars pros if they hold that company in the same regard, provide it with their full support, or feel comfortable tying their livelihood to its existence and success.

Quick Aside: Legal Analysis of Whether Players Could Successfully Sue Wizards of the Coast, a Hasbro subsidiary for Breach of Contract or Promissory Estoppel

Every Reddit thread on any change a company makes will inevitably include a claim that the company can be or should be sued.  I’m sure on /r/SoupCanCollecting when Campbell’s changes the shade of red on its soup cans someone posts “IANAL, but can’t collectors just sue them?” 

I already said above that a labor & employment case on behalf of Pros is possible, but costly and not even likely to succeed.  A case against Wizards of the Coast, a Hasbro subsidiary, for breach of contract or promissory estoppel (a fancy term for essentially breaking a promise you made that you knew or should have known others would reasonably rely on), has several issues that in my view are fatal to the players’ cause.

For as long as I can remember, descriptions of the Players Club benefits have been accompanied by a reservation of rights, the right to change or revoke the benefits at any time.  This language makes it difficult to claim that the promise of these benefits a few lines of text away could be reasonably relied upon in an actionable way, whether contract or quasi-contractual theories are invoked.  Wizards legal is bad, but they did repeatedly pepper us with the right disclaimer in the right place on this issue.  

Few things in law are truly open and shut, so of course there is a chance it could be found the other way, but it would have to be litigated to find out and when the class of potential plaintiffs is ~30 people and the dollar amount per claim is $11k or whatever, that dog just won’t hunt. 

Where Do the Pro Players Go from Here?

Somewhere else perhaps.  But even if we learned that Wizards of the Coast, a Hasbro subsidiary doesn't need us, some of us may need it.  The game is fun, the community is great (the ecosystem of many communities actually, fuck off with that Community Super League appropriation), and only 30 of us were platinum anyway.  Maybe this is getting a little overblown, I respect that take.  And I suspect Wizards of the Coast, a Hasbro subsidiary, will back off the timing component of the decision and make the new benefits effective 2017-2018.  I suspect this because the backlash has been much larger than the dollar amounts are.  As described above, Wizards of the Coast, a Hasbro subsidiary, is a greedy hellscape of myopic corporate pragmatism, and I predict they do the now seemingly pragmatic thing on the timing issue.

If they don’t back off the timing of the change, I suggest all current Platinum Pros, myself included, coordinate in order to boycott PT Sydney and to prepare and present counter-programming against its broadcast that weekend on Twitch by having top Magic pros learning and streaming other TCGs.  For me, at 28 points with a few GPs coming up, there is a very good chance that skipping Sydney would cost me Gold (and a shot at extending my last-PT-of-the-year top 8 streak and making Platinum, which used to be different than Gold by the way).  As a community of top players, we don’t have many high-powered tools to push back with and we have no such tools which involve zero personal sacrifice.

However, assuming things go as predicted and this is walked back to a 2017-2018 change, that gives professional players a couple years to figure out how to downshift into “hobbyist who pursues the World Championship but not at the expense of everything else” or find something else entirely to spend time and money on (Hearthstone, HexTCG, or even, gasp, personal or professional pursuits outside of gaming). 

Attempting to unionize or sue for back pay on a, based on my best guess, fairly thin but not entirely unprecedented definition of “employee” seems likely to kill the Pro Tour at the same time it consumes a bunch of time, energy, and money of the players involved.  But if the players who did attempt to make a living at Magic feel entitled to unionize or to seek back pay I would support their efforts.  Nothing in this post shall be construed as an admission or waiver, express or implied, of any of the author’s rights under the NLRA, WA or CA state law, or otherwise. 

The one thing none of us should do for several years is trust Wizards of the Coast, a Hasbro subsidiary, to act with integrity or respect towards the community of entrenched competitive players.  Some individuals working there certainly want to do right by the players and support them, but if you’ll allow me to return to my favorite analogy, people at KFC merely wanting you to stay healthy doesn’t get it done in a corporate culture that either renders them powerless or incentivizes them to do the opposite while keeping up appearances.   

Aaron Forsythe recently tweeted that Greg Leeds, who resigned as President of Wizards of the Coast, a Hasbro subsidiary, “went out on top.”  On top of what, a steaming pile of shit?  Now we have received an indication of where to set our expectations for new President Chris Cocks.  I wish him luck in stopping the hemorrhaging of market share to Blizzard’s Hearthstone.  Unfortunately, Magic’s organized play won’t be helping the cause.  Not with this approach or at this scale. 

Take care,
Matt Sperling.

Twitter @mtg_law_etc is a better place to converse than the comments below if you want me to read and maybe respond.  Someone should also post this on Reddit so we get the free expert legal advice that's easy to find there.