Riot has announced massive changes to the NA LCS Structure to begin in 2018. Here are some of the biggest changes:
*Permanent Partners will be brought in based on an application process. Current teams are NOT guaranteed to be given slots. *Spots will cost $10 million USD. *Revenue will now be shared, both between Players and Teams. *Teams will be guaranteed 32.5% of the NA LCS revenue. *16.25% of this revenue will be evenly spread between all of the teams. *The other 16.25% will be used for prize pools. *Players will be guaranteed 35% of the NA LCS revenue. *Minimum salary for players will now be 75k. *Challenger scene will be rebooted as an Academy scene. *Players' Association will also be built.
For the full information, check out Riot's announcement here.
I guess the TL roster makes a lot more sense now. This split is meaningless for teams that aren't going to be fighting for worlds spot so might as well hold off wasting any money mid season and instead wait for contracts to be up end of year.
There are a lot of positive steps here, I personally dislike the concept of franchising as it isn't needed for the rest of it to happen anyway. Players Union being linked with Riot kind of defeats the purpose in a way as well so we'll see how much teeth such a thing has in the future.
On June 01 2017 23:47 Numy wrote: I guess the TL roster makes a lot more sense now. This split is meaningless for teams that aren't going to be fighting for worlds spot
Unless you get relegated. Relegation dies in 2018- there's still one more chance to get relegated in 2017.
On June 01 2017 23:47 Numy wrote: I guess the TL roster makes a lot more sense now. This split is meaningless for teams that aren't going to be fighting for worlds spot
Unless you get relegated. Relegation dies in 2018- there's still one more chance to get relegated in 2017.
Teams have to apply for LCS spots next year so doesn't matter what happens this split. It's just about if Riot likes you in the league or not. TL is an old brand, owned by sports guys and has Riot approved CEOs so it's highly unlikely they won't be a part of the LCS. So saccing this split and just trying to get better lineup for next year plays into their application more than trying now.
On June 01 2017 23:47 Numy wrote: Players Union being linked with Riot kind of defeats the purpose in a way as well so we'll see how much teeth such a thing has in the future.
It doesn't look like it's linked - it's just initially funded by Riot and after that run independently. That's about as good as you could hope for.
Riot's cut being 30% seems huge, but I don't know the exact structure of other 'pro' sports(although I know revenue splits tend to be at or above 50% pretty much for players), and I know Riot is a more active participant in this case in comparison to say the NFL(the monumental difference being that they own the game, it's an actual IP not a sport, and they provide venues, not just a commissioner and league office staff).
On June 01 2017 23:47 Numy wrote: I guess the TL roster makes a lot more sense now. This split is meaningless for teams that aren't going to be fighting for worlds spot so might as well hold off wasting any money mid season and instead wait for contracts to be up end of year.
There are a lot of positive steps here, I personally dislike the concept of franchising as it isn't needed for the rest of it to happen anyway. Players Union being linked with Riot kind of defeats the purpose in a way as well so we'll see how much teeth such a thing has in the future.
Honestly though, who was out there to be signed? Outside of pulling rookies, the only player available of any note was Turtle. Doesn't really do much for the mid position unless you intend to keep Piglet in mid.
10 million buy-in? Seems like a lot for a game that might well be dead in 10 years. But what do I know.
Especially since you're only guaranteed like what, a 1-2% share of total revenue before performance rewards? To me this seems like Riot trying to 100% offset risk onto teams with the buy-in. Is Riot even making money off of LCS yet? Because I'm trying to fathom a scenario where this makes any economic sense for the team purchasing the buy-in, and I'm really struggling.
On June 02 2017 07:49 red_ wrote: Riot's cut being 30% seems huge, but I don't know the exact structure of other 'pro' sports(although I know revenue splits tend to be at or above 50% pretty much for players), and I know Riot is a more active participant in this case in comparison to say the NFL(the monumental difference being that they own the game, it's an actual IP not a sport, and they provide venues, not just a commissioner and league office staff).
in 2014 the NFL (the most owner/league focused of the big three) made about 12 Billion. We know how much was shared because of the Green Bay Packers, who release said info as the only publicly owned team. the rev share total works out to about 7.2 Billion for 2014. So the NFL kept ~40% of revenue. This was during the transition from non profit to for profit.
Salary Cap was 133 Million per team that year, which would work out to 4.256 Billion if every team spent at cap. (which they did not)
So it looks like riot took the NFL proportions and used those. Though the NFL is the greediest of sports leagues.
i am wary about Riot fronting the money to create a players union. how much will they be influencing that union. because once the union is founded, they are at odds with it in negotiations. But im overwhelmingly pro labor and pro union in these types of situations.
As for the revenue. It's important to note that NFL teams keep Local Revenue (tickets concessions etc team sponsorship/partnership). Something that is a lot harder to come by for LCS teams.
On June 03 2017 16:21 zer0das wrote: 10 million buy-in? Seems like a lot for a game that might well be dead in 10 years. But what do I know.
Especially since you're only guaranteed like what, a 1-2% share of total revenue before performance rewards? To me this seems like Riot trying to 100% offset risk onto teams with the buy-in. Is Riot even making money off of LCS yet? Because I'm trying to fathom a scenario where this makes any economic sense for the team purchasing the buy-in, and I'm really struggling.
Well then there's the 20 million Blizzard wanted for OW which might never be alive.
On June 02 2017 07:49 red_ wrote: Riot's cut being 30% seems huge, but I don't know the exact structure of other 'pro' sports(although I know revenue splits tend to be at or above 50% pretty much for players), and I know Riot is a more active participant in this case in comparison to say the NFL(the monumental difference being that they own the game, it's an actual IP not a sport, and they provide venues, not just a commissioner and league office staff).
i am wary about Riot fronting the money to create a players union. how much will they be influencing that union. because once the union is founded, they are at odds with it in negotiations. But im overwhelmingly pro labor and pro union in these types of situations.
Having a strong players union is basically mandatory for franchising to exist as the nature of franchising disproportionately gives power to the teams over players where as now there exists a more middle ground. I do wonder if salaries will drop substantially next year as teams no longer have to fork out the big money to keep players from running off to new VC teams.
On June 02 2017 07:49 red_ wrote: Riot's cut being 30% seems huge, but I don't know the exact structure of other 'pro' sports(although I know revenue splits tend to be at or above 50% pretty much for players), and I know Riot is a more active participant in this case in comparison to say the NFL(the monumental difference being that they own the game, it's an actual IP not a sport, and they provide venues, not just a commissioner and league office staff).
i am wary about Riot fronting the money to create a players union. how much will they be influencing that union. because once the union is founded, they are at odds with it in negotiations. But im overwhelmingly pro labor and pro union in these types of situations.
Having a strong players union is basically mandatory for franchising to exist as the nature of franchising disproportionately gives power to the teams over players where as now there exists a more middle ground. I do wonder if salaries will drop substantially next year as teams no longer have to fork out the big money to keep players from running off to new VC teams.
Probably not. They still don't anywhere match the advertising impact they provide.
That's a solid point but it also could hint at something else. Previously marketability was a very big factor in NA esports(Still is obviously). Over time I felt teams try go for a mixture a bit bringing in all these Korean players who while they have name power don't quite have the marketability as other players. Is it possible we see a shift more back to the previous setup? There are also players who don't really have that same advertising impact but due to being NA resident in a weak position or just lack of talent pool locally been paid rather high as another VC team could just take them away. Now that kind of player may be worth less going forward.
So it could be the very top guys stay the same but rest take a hit. It'll be interesting to see.
On June 04 2017 03:52 Numy wrote: That's a solid point but it also could hint at something else. Previously marketability was a very big factor in NA esports(Still is obviously). Over time I felt teams try go for a mixture a bit bringing in all these Korean players who while they have name power don't quite have the marketability as other players. Is it possible we see a shift more back to the previous setup? There are also players who don't really have that same advertising impact but due to being NA resident in a weak position or just lack of talent pool locally been paid rather high as another VC team could just take them away. Now that kind of player may be worth less going forward.
So it could be the very top guys stay the same but rest take a hit. It'll be interesting to see.
It's even easier and more desirable now as a sponsor due to it being a safe investment. Instead of having that brand buildup go in a few months, it's going to take 2.5 years unless a team does something exceptionally dumb.
Team owners are going to import as many players as they can under the rules if there's no suitable NA talent. If they got rid of region locking in the offseason, you'd better believe somebody will back up the truck to move over a full Korean roster.
On June 03 2017 16:21 zer0das wrote: 10 million buy-in? Seems like a lot for a game that might well be dead in 10 years. But what do I know.
Especially since you're only guaranteed like what, a 1-2% share of total revenue before performance rewards? To me this seems like Riot trying to 100% offset risk onto teams with the buy-in. Is Riot even making money off of LCS yet? Because I'm trying to fathom a scenario where this makes any economic sense for the team purchasing the buy-in, and I'm really struggling.
Well then there's the 20 million Blizzard wanted for OW which might never be alive.
I mean, at least they can be excused by pie in the sky levels of engagement.
Broadcast rights for League look to be about 200-300 million over a 6 year period based on rumors? Player salaries are going to be at least 100 million. After that, as a team, you're guaranteed like 700k per year? Then you have to account for hiring support staff, rent, etc. So it's going to take like 20 years to break even as a bottom tier team. Unless sponsorships or broadcast money end up being significantly more than I'm envisioning. I suppose the broadcast rights could sell for 2x as much, but you'd still being looking at a 10 year break even point.
I also find their argument about competitiveness to be extremely half-hearted and disingenuous, but I suppose that is pretty much par for the course for Riot.
On June 03 2017 16:21 zer0das wrote: 10 million buy-in? Seems like a lot for a game that might well be dead in 10 years. But what do I know.
Especially since you're only guaranteed like what, a 1-2% share of total revenue before performance rewards? To me this seems like Riot trying to 100% offset risk onto teams with the buy-in. Is Riot even making money off of LCS yet? Because I'm trying to fathom a scenario where this makes any economic sense for the team purchasing the buy-in, and I'm really struggling.
Well then there's the 20 million Blizzard wanted for OW which might never be alive.
I mean, at least they can be excused by pie in the sky levels of engagement.
Broadcast rights for League look to be about 200-300 million over a 6 year period based on rumors? Player salaries are going to be at least 100 million. After that, as a team, you're guaranteed like 700k per year? Then you have to account for hiring support staff, rent, etc. So it's going to take like 20 years to break even as a bottom tier team. Unless sponsorships or broadcast money end up being significantly more than I'm envisioning. I suppose the broadcast rights could sell for 2x as much, but you'd still being looking at a 10 year break even point.
I also find their argument about competitiveness to be extremely half-hearted and disingenuous, but I suppose that is pretty much par for the course for Riot.
But that's just one revenue stream. They could very easily start doing spot ads like they used to do for a Game of Thrones season starting or a movie coming out(I think it was GotG1). Or have a big sponsor like they did for a while with Coke.
The 10 million buy in is only 5 million up front, the rest over a period of time(they were intentionally vague on how long that was).
I mean just look at the three biggest esports right now. LoL and CSGO are pretty close, then DOTA2 and then the emerging one is OW.
LoL - Riot Games has a proven track record with viewers and is now implementing revenue streams in NA. The biggest PC game in the World.
CSGO - Almost as big as LoL in the West, especially in Europe. Slowly growing in NA as well. However, just look at what happened when the NA teams tried to create their own franchised League. Players revolted and chose the bigger EU scene. NA Orgs have little to no control over the scene and players have huge power.
DOTA - Similar to CSGO but even worse. The real Wild Wild West. Players come and go, no real governing body or movement towards franchised systems in NA.
Overwatch - At least as expensive as LoL if not even more expensive. Blizzard has a history of fucking up their esports. Look at their biggest current esport, it's Hearthstone. Of course, with that being said it means they'll be throwing money bags to try and make OW its feature esport, so there's that to factor.
TSM already backed out of OW for being too expensive and I'm sure a bunch of other orgs felt the same. Even if League dies within 10 years, this 5 million dollar investment keeps you relevant in the biggest esport until the next one emerges.
Say you are a team like Immortals, give up on League, and to add onto that you don't make it into OW League. That leaves CSGO as your big esport, which Immortals have already had their past grievances with. CS is also much bigger in Europe than in America and you still have that shooter stigma. So you're out of the spotlight until a LoL-killer emerges if it ever does. If you stick with LoL until its death, you stay in the spotlight and then you can transfer your viewership and fanbase with you into other esports.
