SK Gaming, Luminosity locked in contract disputes after SK attempted to poach Luminosity players

Luminosity Gaming's Counter-Strike team celebrates on stage after winning DreamHack Austin. The roster was later caught up in a contract controversy between LG and SK Gaming. Sol Neelman for ESPN

"ELeague" officials are in discussion to potentially discipline -- and perhaps remove -- Counter-Strike: Global Offensive team SK Gaming after it attempted to poach the entire Luminosity Gaming team, coach and manager.

Now, as the players try to go back on contracts they signed with SK Gaming, SK on Friday threatened to pursue litigation against them.

While no official complaint has been made to "ELeague" officials, sources close to both Turner Broadcasting and WME|IMG say they are aware of the situation, which could result in action taken against SK. Turner will televise "ELeague," a live video-game competition.

The discussion on the matter, which has involved parties from WME|IMG and Turner, stem from a contractual dispute between Luminosity Gaming and SK Gaming over the players who currently compete under the Luminosity banner. ESPN obtained email exchanges between the players and SK outlining a lengthy back-and-forth process between the parties since February, ultimately culminating in the players signing contracts with the SK Gaming organization, which go into effect July 1.

However, the Luminosity players also had outstanding letters of intent with Luminosity Gaming for a two-year term that were signed in December 2015.

In the emails, SK Gaming managing director Alex Müller said the players could choose where to live and practice, and offered $9,000 in monthly allowances for the team house and for flights to Brazil to see family. Müller even brought the letters of intent to a group of German and British law offices. Their legal analysis concluded that letters of intent "always [have] an OUT," according to one email exchange. Müller also promised the players legal representation, additional compensation and counsel in any regard.

The players, coach and manager have ultimately decided to stick with Luminosity, but due to the SK contracts -- which the group said were signed out of pressure and a promise of protection from Luminosity --SK Gaming is now threatening to prepare litigation against the players, coach and management, according to the players' lawyer, Ryan Morrison.

"SK was pushing us to sign a contract with them when we were not comfortable with the whole situation," Luminosity Gaming captain Gabriel "FalleN" Toledo told ESPN. "That happened three days before the major. At that time, all we wanted is to be clear of those organizations 'problems' and focus on winning the major. After achieving that, we discussed internally and with lawyers about the situation. We also realized that we wanted to stay, building the history we have been building this entire year with LG. We have been growing so fast lately, both team and organization, and we feel proud to be part of it. That's why we wanted to stay where we feel comfortable."

Luminosity Gaming CEO Steve Maida explained the process by which Müller contacted the players:

"To this day I've yet to receive an email from [Alex]," Maida told ESPN. "He continued to proposition, bribe, manipulate and con my players, of whom only a few speak English, and did so with no legal representation. He never once informed me that he was doing this behind my back or [was] even speaking to my players. He manipulated my players into thinking LG was the devil, and coached them on how to break their contracts with false information and lies, all the while telling them he would protect them if LG took legal action, by paying for any legal fees. He even went so far as to personally write the communications to Luminosity (me) for the players."

Representing the players in the matter is video game attorney Ryan Morrison, who has worked in the players' interest apart from any specific organization. Esports lawyer Bryce Blum is the representative of Luminosity Gaming, while World Esports Association (WESA) interim league commissioner Pietro Fringuelli represented SK Gaming originally.

But Fringuelli has removed himself from the case after being approached by all parties and asked about a blatant conflict of interest given his position with WESA. The new SK Gaming lawyer, Konstantin Ewald, has threatened the players with litigation if they don't compete with SK Gaming starting July 1.

Fringuelli is not the only WESA-associated party involved with this case. Electronic Sports League CEO and WESA board member Ralf Reichert is a partner in SK Gaming, as verified by the German company's register. However, Reichert said Thursday on Twitter that he has made an agreement to sell his shares in the company.

Maida, the Luminosity Gaming CEO, notified Reichert about this issue. In a statement from ESL, Reichert claims to have no involvement in this situation. However, according to Maida, he and Reichert discussed this matter.

Maida claims he originally became alerted to WESA members' involvement after finding out Fringuelli had been a lawyer on behalf of SK Gaming. After asking around, Maida heard that Reichert was a partner in SK Gaming, and Maida claims when he asked, Reichert admitted to this.

"I approached Ralf to discuss how he could assist in resolving the matter and righting a wrong. He claimed ignorance and said he has no power," Maida told ESPN. "We later discovered that he did have the power. Ralf took the stance that what SK did was perfectly legal and he has nothing to do with it. Meanwhile, he was back channeling with his people about damage control if this information was leaked. One of those strategies was to sell his share of SK and claim ignorance."

Maida said he doesn't know if Reichert had direct involvement with the attempted poaching, but it "doesn't look good" from his perspective that Reichert didn't take action.

"The entire situation is extremely disheartening that a group of authoritative figures that we trust as owners and players would try to steal something the players and I have built from the ground up," Maida said in a statement. "As of now the team, by their own decision, is staying with LG and honoring their pre-existing contracts. We hope to continue to build our legacy in peace."

In Counter-Strike, poaching is not against any current rules and is handled on a case-by-case basis by individual leagues. However, it is highly frowned upon by many, particularly when one party interferes with the business of another. In other esports, such as League of Legends, team associates such as Renegades CEO Chris Badawi and organization Counter Logic Gaming have received hefty fines and even complete bans from leagues due to similar action.

"ELeague", while declining to go into specifics, told ESPN that there is a process for these kinds of situations.

"Team owners may file a formal complaint with 'ELeague' to raise issues of tortious interference, poaching or any other actions that may be deemed damaging to 'ELeague,'" league officials told ESPN. "Matters of discipline against teams or players are handled at the sole discretion of the 'ELeague' commissioner."

SK Gaming and Alex Müller could not be reached for comment on this story.