Riot reveals revenue-sharing for teams, crowdfunding for Worlds and MSI prize pool

by theScore Staff Sep 22 2016
Thumbnail image courtesy of theScore esports / Riot Games

Riot Games has promised some major changes for LoL esports in 2017, including revenue sharing for team-branded in-game goods, and increases to Worlds' and MSI's prize pools through skin sales.

"As we move into 2017 and beyond, we’re continuing to take steps towards a future where top LoL players have very well paid, long careers doing what they love - and where LoL esports team organizations are thriving businesses led by empowered owners who share responsibility and accountability for the long term prosperity of the sport," the announcement says.

"To help get us there, we’ll share LoL esports revenue streams and collaborate with our partners to develop new business models and actively shape the league. We want these partners to have permanent stakes, to be invested in a stable future and to profit from the continued success of the sport."

While the statement says revenue sharing will begin with 25 percent of Team Championship skin revenues going to the teams they're based on beginning with this year's Worlds, Riot will also be introducing new team-branded in-game content in 2017 and increasing the percentage of summoner icon revenue that goes to the teams.

In addition, 25 percent from Championship skin revenue will go towards increasing the prize pool for Worlds, similar to Dota 2's Compendiums and Capcom's Capcom Pro Tour DLC pack, which added $90,000 to this year's Capcom Cup prize pool. Twenty-five percent of Challenger skin sales will also be going towards the Mid-Season Invitational prize pool.

"As we invest and build towards the future, we recognize that the current ecosystem isn’t consistently profitable yet for team owners or for the league. Costs have risen — namely in the form of player salary increases and support for those pros — mainly as a direct result of significant external investment and interest in the scene," the statement says.

"This part of the journey isn’t unusual; escalated investment is a natural occurrence in a growing ecosystem, and is a sign that our initial approach has been working. However, we recognize that we can help rebalance the scene by accelerating some of our longer-term economic tactics to help address short-term pain felt by many of our partners."

As new revenue-sharing ventures find their feet, Riot will also be giving teams a lump, minimum income in 2017, to be determined on a league-by-league basis.

"In 2017 each league will set aside a guaranteed minimum to each of its teams as it determines appropriate based on regional needs. For example, the EU LCS will have a minimum revenue amount of €100,000 per team for the full season, of which 50% will go to players as supplemental income on top of their existing salaries. Even without counting the retroactive payments to past champions, this will contribute millions of dollars in additional revenue to teams and pros each year."

The promises of revenue-sharing and increased prize pools could go a long way towards alleviating the concerns of LCS team owners brought up during the public feud between Riot president Marc "Tryndamere" Merrill and Team SoloMid owner Andy "Reginald" Dinh that resulted in several in several LCS teams sending a proposal to Riot for better cooperation.

RELATED: Reginald responds to Tryndamere: 'It’s irrational to invest even more money into LCS, given how restrictive LCS is'

While Merrill ultimately apologized for launching personal attacks on Reginald on Reddit and promised new revenue-sharing opportunities for teams in 2017, today's announcement tiptoes around actually giving teams a say in the LCS through formalized partnerships. While the statement says the company is building plans for partnerships, nothing major will happen on that front until 2018.

"Nailing fandom and strong economics is important for a thriving sport — but stability, with partnered organizations and the right structure, helps create a healthier environment in which our sport can grow and evolve over the longer term," the statement says.

"We’re not yet at the stage where we can describe exactly what long-term org partnerships will look like; we’re not sure how they’ll work, or even if there will be the same structure in each region. Creating long-term partnerships across the globe is complicated — legally, financially, operationally. That said, the first step is securing those partners and putting the right structure in place. We will be looking to make this step in 2018."

However, Riot acknowledges that these moves are the first steps on a longer path towards developing a mature sport and a mature business model.

"We believed the future was bright for LoL esports in 2012 — and it’s even brighter today as we take our most significant steps yet. As we face additional challenges and future unknowns, we’ll continue to stick to our core beliefs; to put esports fans first, to build a great ecosystem that keeps the sport you love around for the long-term, and which fans, pros & teams all aspire to," the announcement says.

Sasha Erfanian is a news editor for theScore esports. You can follow him on Twitter.