The Rising Tide: 2019 Changes to the European League Championship Series are Geared Toward Long-Term Prosperity

09 Apr 2018

The Rising Tide: 2019 Changes to the European League Championship Series are Geared Toward Long-Term Prosperity

Big changes are coming to the European League of Legends Championship Series (EU LCS) that are likely to benefit everyone involved: players, teams, league, and sponsors.

For years, the EU LCS operated as a promotion and relegation system, similar to European football and some other European sports. In a promotion and relegation system, teams bounce between different divisions based on their performance from the previous season. In other words, at the end of a season, the best-ranked teams from a lower division are promoted to a higher division, while the worst-ranked teams in that higher division are relegated to the lower division.

This system led to a fairly high turnover of teams throughout the history of the EU LCS. It also created some high-drama situations, such as when team Misfits went, in approximately one year’s time, from the Challenger Series (the tier below the EU LCS) to almost knocking SK Telecom T1(a consistently high ranking Korean team) out of the 2017 World Championship.

However, it also caused some turmoil. Two teams in particular, H2k and Unicorns of Love, have publically complained about the lack of financial stability in the EU LCS. Several EU LCS teams applied for entry to the North American league (but were denied).

“It’s also very unfortunate that, for example, we don’t have Origen right now anymore,” Marc Schnell, head of EU league management at Riot Games, said in an interview with Forbes. “Not only Origen, there’s a bunch of other teams that have been truly storied teams that have shaped the early years of our league that unfortunately are not with us anymore.”

That’s why, for the 2019 season and going forward, the EU LCS is going to become a franchised league. Partnership agreements with teams will last for three years, and the only conditions for removal are consistent poor performance or disciplinary issues.

“We believe that, in the long term, having teams that stay with us, teams that are able to build true deep emotional connections with their fans, teams that will be able to build up rivalries with their competitors in the league over the course of five, 10 years. I believe that down the road this will be more powerful and more engaging,” said Schnell.

Riot Games runs a similar league in North America (known simply as the League Championship Series or North American League Championship Series). It went through its own upheaval by becoming a franchise league earlier this year.

Photo Credit: Variety

Applications for the EU LCS are already being accepted. The buy-in price will be 8 million euros (approximately $10 million) for current teams in the league, and 10.5 million euros (approximately $13 million) for new teams. These prices are in line with the North American franchise agreements (which was exactly $10 million for existing teams and $13 million for newbies).

All teams that wish to take part in the EU LCS need to go through a three-stage application process. The first stage consists of a detailed application that includes meticulous financial data, ownership information, plans for brand growth, and how they intend to enhance the overall league.

Those that move on to the second stage will attend an in-person review. The third stage involves narrowing the field to the lucky teams that will take part in the revamped league.

“It’s not necessarily that we want the 10 richest teams or the 10 ultimately, individual best teams,” said Schnell. “What we’re looking for is for the right mix that allows us to learn from each other. I feel we would like everyone to bring something to the table that will help elevate the league as well as all the other teams. It’s pretty hard to say ‘this is exactly the individual profile we’re looking for’ because, if I said that it’s 10 of those, then this would probably be a really stale league. We’re looking for the right mix.”

Another big change being made is to the player’s salaries, which, according to ESPN, will increase from the current rate of $29,791 to $74,749 (60,000 euros) annually in 2019. That’s almost a 150 percent increase. In addition, Riot is creating a player support program that includes financial counseling and personal development. All in all, a smart move with the intent to keep players happy and invested in the league.

Those base salaries could be just a starting point. The revamped league is going to participate in a consolidated revenue pool.The players will get 35 percent, which will fund their salaries and any money left over will be distributed among the players as a bonus. Next, 32.5 percent of the revenue pool will be given to Riot to use for production costs, live events, and other league expenses. The remaining 32.5 percent will be distributed to the teams.

Photo Credit: My Gaming

“We do think that these changes that we’re making will allow Europe to become an economically stronger region, which we hope and believe will have a positive impact on players as well as teams in the long run,” said Schnell. “There might be an effect of players being less inclined to change regions. There might also be an effect of teams being more incentivized to think long term, invest in players long term.”

The biggest fear about franchising is that, since the worst teams no longer get relegated, it may have a negative impact on the competitive integrity of the league. However, the best argument against that line of thinking can be found just a couple of sports over. European football, which routinely regulates teams, is dominated by the same few top teams every year. The reason for this control is because they have the majority of the best players. Which makes sense; the best players all want to play for the top teams because it gives them stability, thus keeping the top teams at the top. It is a system that’s great for the cream of the crop, but not so great for everybody else.

Compare that to American football where all the teams are franchised. In that league, there is a great deal of parity, and it is hard for a single team to remain on top for long while low-ranked teams can improve quickly through the draft and free agency.

Eight to 10.5 million euros may seem like a healthy chunk of change to shell out for a league team, but consider this fact: since franchising, the North American teams are valued between $140-200 million. There is every reason to suspect that the value of the EU LCS teams will be comparable.

This presents a great opportunity for brands interested in breaking into the esports scene.

The new franchise EU LCS model will lead to greater stability of the teams and players. It will be easier for spectators to become invested in the teams and players because they are going to stick around. It won’t be long before rivalries develop between players and teams, further enhancing the narrative.

There are many ways to become involved and several sponsorship opportunities: players, teams, league events, broadcast opportunities, and more.For a greater in-depth look at all the chances available to you in the current scene, give our esports specialists a call at 972-323-6354.