Franchising Announcement Marks a Milestone Moment for Esports
Riot Games has made a long-awaited franchising announcement, which is being touted as one of the most significant moments in esports history. Starting in 2018, the NA LCS will be transformed into a stable league with revenue sharing for teams and players, a move that solidifies the industry’s growth and longevity.
In order to ensure the success of future leagues, it is essential that this transition is executed properly. While there are benefits to being a pioneer, there are also risks involved. Riot, as well as the teams and players involved, must work together to establish a sustainable structure. Only then can the league fully embrace the advantages of the franchised model while minimizing the drawbacks.
Riot’s announcement contains both positive elements and potential challenges that could impact the long-term viability of the LCS if not handled correctly. However, let’s start with the good news.
Moving in the Right Direction
Since the announcement, much of the discussion has revolved around the selection of participating teams and the franchise fee, which Riot has revealed to be $10 million. However, this may not be the most crucial aspect of the franchising decision. The fact that Riot is conducting an organized search for the best partners instead of simply auctioning off spots demonstrates a step in the right direction.
Another significant development is the inclusion of revenue sharing. Previously, Riot held almost complete control over its worldwide leagues. Granting control to team owners is beneficial for the overall health and long-term growth of the league. Franchising and revenue sharing incentivizes teams to act in the best interests of the collective, something that has previously been lacking.
Additionally, the removal of relegations will have a significant impact on the Challenger Series. By requiring partner teams to field Challenger organizations, Riot is enhancing the stability of the secondary league. This change will likely lead to better scouting and player development, as teams will now have the opportunity to practice in a more structured environment. The hope is that, with funded Challenger teams and no fear of relegations, even the weakest LCS teams can innovate and make bold moves for their future.
Clearly, Riot’s announcement is a slam dunk for the league and the teams involved. However, we must not forget another important group: the players.
Is a Players’ Association Enough?
Riot has also made efforts to address the needs of the players by establishing a players’ association funded by the league. The association will serve as a platform for players to collectively negotiate with Riot and the teams. While this is a step in the right direction, proper execution is crucial. The organization’s close ties to the league raise concerns about potential conflicts of interest. There has also been scrutiny regarding the selection of association representatives.
Although players have the opportunity to reject Riot’s suggestions, the fact that Riot is vetting representatives is troubling. Furthermore, some of the most reputable esports law firms were not invited to the table. The entire process seems poorly thought out or intentionally structured to favor Riot’s interests. Neither scenario bodes well for the establishment of a successful league.
To alleviate player concerns, Riot has promised a minimum of 33 percent of league revenues through contracts and revenue sharing. While this may seem fair, it falls significantly behind major franchised leagues such as the NFL and NBA, where players receive close to a 50 percent share. Riot’s unique position as both a league owner and game developer contributes to this disparity.
Riot’s ultimate goal is for players to assume full financial control of the players’ association. Yet, the current negotiation process seems to place players in a position of weakness. Historical evidence from other leagues suggests that player influence over pay and decision making tends to decrease as the league grows and undergoes economic changes.
While yesterday’s announcement represents a major step in the right direction, there are still obstacles that could hinder the creation of a stable and successful league. It is crucial that the right choices are made to navigate this new esports landscape, taking into account the interests of all parties involved.