Franchising the LCK – A Step in the Right Direction?

The League of Legends Championship Korea (LCK) will join Riot Games‘ long-term partnership model in 2021, following other big regional leagues like the LCS, LEC and LPL. What will change for the South Korean LoL stars?

The so called long-term partnership is a model similar to franchising, known from US sports leagues such as the NFL or the NBA. It allows organisations to partner with Riot Games and secure themselves a spot in one of the professional leagues for an indefinite amount of time. However, the organisations are not co-owners of the league their teams are playing in, and that’s the difference compared to classic franchising.

Riot Games‘ model is becoming more and more popular: Before the LCK decided to adapt them, long-term partnerships had already been implemented in the North American LCS, the European LEC and China’s LPL. Big changes to the ecosystem will of course lead to big changes for players and teams. This begs the question: Is the decision a step in the right direction for the LCK?

Higher salaries and sustainability – but what about competition?

There are some obvious benefits to players and teams in a franchise league. For the professional players, the greatest benefit is of course a growth in salaries. Without long-term partnerships, the minimum salary for an LCK player per year is around $16,000. The league will now, as the new ecosystem gets implemented, triple this minimum. Each player will have to get paid at least $48,000 a year. This is obviously great news for the young athletes, who are still getting paid significantly less than most of the players in LCS, LEC or LPL.

Although the organisations will have to pay higher salaries, they will profit from some aspects of the long-term partnerships as well. The first one is revenue sharing: Riot Games will share all LCK revenues with their partner organisations, which will help them to stay profitable. The second and most important one is sustainability: The LCK teams will be safe from demotion and have long-term planning security to find sponsors and sign young players, using their new academy teams.

But there is also a downside coming with this security. Without the risk of relegation, players and teams could lose motivation to show their best possible performances. Playing in a franchise league means you are fighting for a playoff spot, but as soon as this is out of reach, there might be a lack of incentives to do your best. This, however, is a risk that cannot entirely be eliminated without having relegation.

Protecting the players and organisations and making the league more attractive to new sponsors is essential for the LCK. It could be hard to keep all the teams motivated over the course of a split, but the LEC, the LCS and the LPL have already shown, that even without relegation there is still enough tension for many viewers to keep watching the games.

Alternatives: How do other publishers handle their esports?

Riot Games is not the first esports publisher to come up with a long-term partnership system. Blizzard pioneered this approach with their Overwatch League back in 2017. The Call of Duty League, founded by CoD publisher Activision, uses the same economic system.

However, there are also other approaches demonstrated by some big publishers and organisations. For example in Counter-Strike: Global Offensive, publisher Valve does not run its own league, but rather gives the responsibility to third party tournament organisers such as BLAST, ESL and FACEIT. As a result professional CS:GO teams play in multiple tournament circuits, but also in leagues with long-term partnerships or even factual franchise systems.

Another tactical shooter, Rainbow Six: Siege, takes a different angle. Ubisoft is working closely together with ESL to run their Pro League, where relegation is still a thing. There is no franchise nor long-term partnership in the league, and the teams have to rely on the money they get for their final placements. In the future, regional leagues will be played in seasons consisting of four quarters, with a major tournament after each stage and relegations only after the fourth.

LoL’s rival Dota 2 is setting up regional leagues for next year as well, but publisher Valve will not establish franchising or long-term partnerships and instead enable relegation.

Since Riot Games decided to not include third party companies in their esports economy, other than the organisations playing in the leagues, it makes sense for them to use the model of long-term partnerships. Riot stays in full control of all esports matters and allows the teams, players and sponsors to have planning security, since there is no threat of relegation.

With that in mind, the adaption of the long-term partnership model seems like a big step ahead, not only for the LCK, but also for other League of Legends competitions that have adapted this ecosystem.

Pictures via League of Legends Champions Korea LCK / Flickr and Riot Games