Riot reveal NA LCS franchising model to go live in 2018

Riot Games, the publisher of one of the world’s largest esports, League of Legends has revealed details of its franchising plans for the North American League of Legends Championship Series. The spots are rumoured to be worth around $10 million a piece. 

The plans, to go live in 2018 state will remove the uncertainty of relegation which the release suggests made “long term bets in the NA LCS extremely risky”. The franchise system will remove relegation from the fray and make large investments, sponsorship deals and investment in infrastructure for esports teams significantly less risky. 

Application process, safeguarding against poor performance and the Academy League

The system will see Riot assess individual applications, before choosing its franchise partners. The company will prioritise organisations with the “welfare and support or pro players” as one of their top priorities. The statement expands, stating that “part of our evaluation process will be examining how teams will support their pros, not only in coaching and training, but in career opportunities or higher education once their playing career has ended” – thus placing emphasis on ensuring that there is life and prospects for athletes outside of esports. 

There’s also safeguards in place to ensure that competition stays at the top level despite the danger of relegation being removed. Financial incentives will be offered such that the better a team does, the more they will be financially rewarded. In addition, should a team finish 9th or 10th five times over an eight split span, they can lose their place in the league – thus guarding against consistent under-performance and ensuring teams continue to strive to be the best. 

Currently, the NA Challenger Series is the division that sits below the LCS. The Challenger Series will now be geared towards breeding the finest talent for the LCS. The Challenger Series is set to become an Academy League, where each NA LCS Organisation will field a team of developmental players. It will provide deeper rosters to experiment with younger talent and more games to played thus to ensure and foster development amongst upcoming players. 

Teams must submit an extensive application, including Brand Plan, Business Plan, Team Strategy and “Owners” which all have example questions listed on the website. 

Revenue share

In return, the league will introduce a revenue-share agreement between those that buy-in to the franchise spots. League-based revenues, such as the MLB deal signed last year will be shared amongst those who buy-in. Teams will also be required to share a portion of their league-driven revenues as well – such as sponsorships and merchandise sales to best align Riot and the Franchisees. 

It elaborates, stating that “only a portion” of revenues that a team makes is added to the revenue pool, and the organisation will keep the bulk of the revenue they make from sponsorship deals they sell. It allows those with the best business acumen to make the most, whilst ensuring that each and every team can work together and grow appropriately. 

Professional teams will receive a 32.5% share of league revenues. Half of the pool will be distributed equally across all organisations, and the other half will be split across league finish and contribution to viewership/fan engagement. 

For the players

The minimum salary for a professional player in the league will now sit at an impressive $75,000 which, although still a far cry from that of, say, a football player, is still comprehensive. Riot has revealed that professional players will also have the opportunity to share in the league’s revenues. “The total play population will also be guaranteed to earn at least 35% of league revenues”, the statement reveals. It also adds that “players will earn their full salary throughout the year, and if the players’ share of league revenue is greater than their combined salaries for the year, the difference will be distributed to the players directly” – if it’s less, then players won’t lose any money themselves. 

Players’ Association

Riot has also revealed plans for a Players’ Association, which it will provide the resources for. Players will vote on reps to be their voice in league decisions and the Association will provide access to core resources like skills training, financial planning and legal help. 

The goal is to create an “independent voice of the players to work with Riot and the teams”. Riot expands “It’s our hope and expectation that as the association grows, the players will assume full financial control over the organisation”. 

The time frame has also been revealed. The application process opened yesterday, and closes on July 14th. By November the partners for the NA LCS from 2018 moving forward will be revealed. The model looks, on the whole, sustainable and well thought out and is a huge step in ensuring the sustainability of League of Legends as an esports title. 

Esports Insider says: Mammoth news coming out from Riot. The company has been very clear and public with their plans and this may well be an attractive proposition for many who look at esports. Whilst no one knows exactly what’s going on with Blizzard’s Overwatch League, this couldn’t be clearer. The Player Association is a great move, assuming it works. It will be interesting to see if and when they roll this out across other regions.