Slingshot's Vince Nairn has acquired an unfinished draft of a letter addressed to Riot Games executives that was allegedly written on behalf of 18 teams in the NA and EU LCS. The letter proposes a moratorium on relegation in 2017, and a $700,000 minimum annual revenue-share for NA LCS teams (€700,000 for EU LCS teams).
The letter, dated Nov. 10, appears to be a non-final draft, and has not been signed by any of the teams listed as parties to it. theScore esports has not been able to independently verify its authenticity, but will report further details as available.
The letter claims that insufficient compensation provided to teams by Riot, as well as overly restrictive controls on team sponsorship agreements and the constant threat of relegation to Challenger Series, have subjected the teams to financial losses and prevented them from adequately investing in player talent. It argues that eliminating relegation and introducing a much more liberal guaranteed compensation package for teams would provide adequate stability for players, teams and the league.
According to the letter, teams’ negotiations with Riot about a franchise-based league have come to a stalemate, with Riot flatly refusing to consider eliminating relegation in Europe, and postponing negotiations about franchising in North America until 2018. Though the letter claims that Riot has agreed to eventual franchising in the NA LCS, it claims that “Riot is not sure that the current NA Teams are desirable long-term partners” and will not disclose how it plans to choose which teams to include as charter members.
As far as compensation, Riot has so far revealed to the public that its expanded digital item revenue-sharing plan for 2017 will provide $100,000 in compensation to teams, in addition to the $100,000 they currently make from player salary compensation each year. The letter claims that this is, so far, the only compensation enhancement package that Riot has put forward in 2016, and that the company refuses to discuss revenue-sharing from league sponsorship or media rights until at least 2018.
“The digital-item revenue concessions alone clearly will not solve the problems described at the beginning of this letter, especially if no action is taken on relegation, revenue-sharing or the establishment of an overall [minimum revenue guarantee] in 2017,” the letter states. “Riot’s terms simply will not fix the instability and financial losses which the Teams have articulated to Riot in detail.”
The letter proposes instead that each team be guaranteed to receive $700,000/€700,000 at minimum, factoring in player compensation and other revenue-sharing agreements. As part of the agreement, the letter proposes NA teams will guarantee their players a minimum annual salary of $100,000. (The letter claims EU teams will not commit to minimum player compensation, citing Riot’s decision to eliminate this rule in 2017.)
The letter also proposes that Riot institute a moratorium on relegation until charter membership can be implemented in NA in 2018, and states that Riot must provide auto-renewal in EU as well.
Calling the proposal a “compromise solution,” the letter states that meeting these terms will nonetheless “not effectively solve the problems stated above and, at best, will still find the Teams operating at a loss in 2017.”
“We believe, however, given Riot’s position on these issues, the compromise solution outlined above is a minimally acceptable path forward for 2017,” the letter concludes. “We respectfully request that Riot adopt these compromise terms no later than December 1, 2016, so that we may plan accordingly beyond that date.”
In August, during a dispute over league sustainability with Riot co-founder Marc “Tryndamere” Merrill, Team SoloMid owner Andy "Reginald" Dinh said that he and other NA team owners had prepared and sent a "detailed proposal" to Riot about how to deal with long-term financial stability in the league. This is unlikely to be the same letter, as Reginald said that his proposal was signed by only NA teams, and the dates do not line up; however, if the Slingshot letter is authentic, it may have been part of the same ongoing discussion between owners and Riot.
Read the full text of the document below.
Annabelle "Abelle" Fischer is a writer for theScore esports with a love for Dota 2, birds and cheese. You can follow her on Twitter.
Jeff Fraser is a supervising editor at theScore esports.