The advent of franchising in the NA LCS was supposed to bring a level of stability and financial viability that had never before been seen in League of Legends esports. For years, publisher Riot Games had sought to wean teams off a business model built on tournament winnings and individual sponsors. This was supposed to create an ecosystem where the teams are partners as much as competitors and all benefit from the growth of the league.
In an episode of Beyond the Rift that aired yesterday, popular League personality and former professional player William “Scarra” Li raised concerns over the viability of the league. Problems are so bad that he said that “there are [LCS] teams that you could buy, there are teams up for sale.”
Podcast guest Alberto “Crumbzz” Rengifo, a former player and color caster nodded his agreement, saying “oh yeah,” in confirmation.
If true, the revelation that teams are up for sale after just one year in the franchised LCS league is a huge concern. It’s the type of problem that, if not properly resolved, could affect more than just North America: Europe is in the middle of its own franchising process, and Riot Games is taking a more active role in the creation and operation of leagues around the world. This would be a huge black eye on Riot’s ability to run an esports operation.
The reason that Scarra believes teams are starting to hedge on their investments in the LCS is that Riot has not produced an environment conducive to growth. He reported that teams are competing for a limited pool of sponsors and other revenue sources, which restricts their ability to grow.
“Everyone competes for the same sponsors,” Scarra said. “People undercut each other all the time. And there’s no figure at the top saying, ‘Stop.'”
Franchised leagues typically bargain with sponsors, equipment providers, and other revenue sources as a collective whole, which strengthens the league’s position in negotiations. Teams are often able to obtain local sponsors on their own, but only to the extent that they don’t compete with other organizations, or the league as a whole.
News that Riot may be fumbling basic elements of franchising add on to the torrent of criticism that has been leveled at the company this year, from its handling of internal sexual assault allegations to its production of Worlds. Individually, some of these issues are ones that can be worked out in time. But taken together, they paint the picture of a company that is in over its head.
Dot Esports has reached out to Riot Games and multiple NA LCS teams for comment. No replies were received at the time of publishing.