Unicorns of Love CEO Jos Mallant has a different perspective on how to best survive in the EU LCS. Where some teams in the league enjoy access to venture capital money and partnerships with traditional sports teams, UoL lives and dies off of Riot’s stipend and sponsorships. Where other teams can afford to take a loss for a year in order to maximize profits the next, Mallant, better known as UOLdad on Twitter, can’t let UoL dip into the red because of the organization’s grassroots nature. But while other orgs are investing in their own future, Mallant makes it a point to invest in the future of his players.
UoL’s future in the increasing affluent League of Legends scene isn’t entirely certain. Unlike most teams that compete in the LCS, the organization doesn’t have any outside investors and Mallant says that their only real business plan is to make sure that the organization doesn’t spend more money in a year than it brings in. Instead of maximizing profits, Mallant says that he prefers to focus on developing and providing for his team’s players. In fact, that’s the very reason why UoL is an independent organization. When his son, Fabian “Sheepy” Mallant’s team qualified for the EU LCS, Mallant took a look at the offers the team received at the time and was disappointed at how easy it was for these orgs to kick the players off their own team.
“When the guys got offers from other organizations when they got the LCS spot, I looked at the contracts and more or less it was possible to bench all the players after the first game in the LCS,” he said. “This is something, of course, which is highly frustrating, or can traumatize young people when they don't get the reward for the work they have done. I think that's wrong. When you have kids of 17, 18, 19 years in a slump, you should give them the time and the support to solve this and come back stronger instead of benching them and taking them out during a phase when they already have problems. Because this can be a deciding factor in their whole life.”
Mallant says that making sure UoL’s players have fun is a core part of the organization’s business plan, if only because they’re at the age where they should be having fun. Mallant isn’t out to turn a massive profit with UoL, instead saying that he’s out to make sure the young adults playing for his team don’t hamper their futures because of playing League of Legends professionally.
“First I'm a father, second I'm a CEO,” Mallant said. “Sending the guys to Korea for a bootcamp, financially it's okay, but the question is if it's good for the development of the guys. It's excellent, so you do it. I had my own companies before, so I know how to make business plans and work for profit, but in esports it's very difficult to make any calculations regarding returns on investment or business plans, so a lot of decisions we are taking here is more focused on what is best for the team, what is best for the development of young people.”
Building a future for UoL’s development is a little more difficult than that. The current state of the EU LCS is such that the Unicorns are forced to grow fast or sell, even the future itself is unclear. Sources have told theScore esports that the NA LCS is moving to a franchising system, and Riot announced that China’s LPL would begin franchising in 2018. Right now it’s unclear if franchising will come to Europe, but Mallant doesn’t believe that it should.
Mallant says that while franchising makes sense for regions like North America, with venture capital backed organizations and greater advertising opportunities, it can’t work as well in European League of Legends. By that same token, he feels that Europe as a region just isn’t used to franchising, since professional soccer leagues use a relegation system, similar to the one the LCS currently uses. It’s an argument that mirrors Riot’s claim that Europe was better suited to best-of-two series than best-of-threes, since Europeans were more used to tied games than Americans. But coupled with the monetary issue, Mallant says it simply doesn’t make sense to franchise the EU LCS.
“I don't believe that franchising will function at all in Europe,” Mallant said, “I think franchising has a lot of good sides, but as you can see in Overwatch, what I see is a big discrepancy between what Riot and Blizzard are thinking about money involved in organizations and people who are willing to invest in a league where you don't know exactly how you get return on investment and if the league will still exist in three three or four years. Overwatch is still not accepted like League and League is already five years old. How much longer will it survive? I don't see people buying slots here for a couple of million, I see the exact opposite happening.”
However, Mallant does believe that the EU LCS needs a major change in the form of revenue sharing. Revenue sharing could bring in more investors, he argues, or even help keep smaller teams afloat. The only problem is that right now, there’s no incoming revenue for them to share.
“Sponsoring is one issue, but you will not get a couple of million from sponsors, at least not at the moment,” Mallant said. “Merchandising is nice, but if you make a couple of hundred thousand that's lucky. The only way to get a healthy system that organizations can make money is revenue sharing. It's the only way. The big question is how you create revenue sharing, because at the moment, there's not much revenue to share. The Twitch channel, the YouTube channel, they don't bring much money. Companies like Riot first have to do the homework and create the revenue, which they already started to do in the United States with the new contracts, then they should also share a part of this revenue to keep organizations alive. Or simply to justify that investors have to invest millions to get into a league.”
The cost of existing in the LCS goes up every split, Mallant says. Player salaries are exploding, a statement echoed by G2 owner Carlos “Ocelote” Rodriguez, and the more you have to pay players, the less money you have to grow the organization. But even spending big money on star players isn’t a sure investment. UoL performed particularly well this past split, but according to Mallant, taking first in your group during the regular season and second in the playoffs doesn’t necessarily mean that sponsors will start lining up outside your door.
“I'm astonished about that as well,” Mallant said. “Otherwise companies like H2K and G2, who are doing very well and went to worlds and so on, they should have tons of sponsors. The opposite is true. I think a lot of the story around esports is that this is the top new market and money involved and there's sponsor money, everyone is investing, and if you're not in esports today you're already too late. This is all just a picture for Reddit, and has nothing to do with the truth.”
Mallant points out that most of the non-endemic sponsors getting into esports are sponsoring North American teams and not European ones. Meanwhile, Europe is getting the same kinds of sponsors that esports teams have always had (computer companies, peripheral makers, graphics cards manufacturers, etc…) and that the money isn’t much better than it has been in the past. He believes that’s partially because non-endemic sponsors still don’t really know what esports is.
According to Mallant, UoL was laughed out of meetings with non-endemic sponsors simply because they were confused about esports. UoL is lucky in that many non-endemics care about how many dedicated fans the organization has, and UoL’s fanbase has survived plenty of high-profile player departures. He also notes that their recent partnership with Lagardere has helped open more doors. Mallant believes that there will be more sponsorships in EU next year, and then, UoL can expand and work on the projects they’re interest in, like setting up a school to invest in the players of the future.
“We would like to get a second team in a local league to grow talent and foster young people and get them on track,” Mallant said. “Get young people on contract and coached by my son and getting more coaching staff as well, so we can have a kind of school, where young people playing in the German league can go and learn not only about how to play League, but also how to perform on social media, what's important for their career. You see a Perkz and he still has to fight about his few wrong tweets about taking a vacation, one or two wrong tweets or actions can ruin a young person's career.
"To take young people and teach them what life is, where to be careful, what to avoid, and I think this is what we want to do for next year.”
Daniel Rosen is a news editor for theScore esports. You can follow him on Twitter.