Chinese live streaming company DouYu has won a lawsuit against Leyou Network Technology, the parent company of Chinese esports organization Royal Never Give-Up (RNG) and has been awarded ￥30M RMB ($4.5M USD) by a Chinese court, according to a report in 21 Finance. The lawsuit filed in the Wuhan Intermediate People’s Court in September of 2019 revolved around a breach of contract dispute between the two companies related to streaming and content creation.
Leyou and DouYu signed a one-year exclusive streaming deal for esports organization RNG in September of 2018 that included ￥20M ($3M) in base pay, a ￥11M ($1.64M) bonus, and the commercial rights to use RNG players’ images and names. However, RNG allowed League of Legends player Liu “Zz1tai” Zhihao to stream on competitor Huya beginning in February of 2019, and also allowed players to attend Huya’s esports talk show “Esports Youth Speak.” In addition, Leyou transferred the operating and commercial rights of RNG to another company called Tiantong Cultural Communications.
The court confirmed that those activities related to Huya violated the terms of the contract and ruled that Leyou must pay ￥10M ($1.5M) in compensation to DouYu.
The court explained that the remaining ￥20M ($3M) penalty was because two RNG players retired without giving DouYu written notice. In 2019, RNG announced that its League of Legends players Yan “Letme” Junze and Liu “Mlxg” Shiyu had retired, and had been replaced by players Xiao “LovEZrr” Zhi and Xie “Langx” Zhenying. DouYu convinced the court that Zhi and Zhenying were not able to provide the same level of performance and influence as the individuals they had replaced.
The lawsuit is made even more interesting by the fact that in August Tencent Holdings revealed its intentions to merge both Huya and DouYu into one company.
The Esports Observer has reached out to RNG for clarification and will update this article if we receive a response.
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