League of Legends Esports (LoL esports) is introducing a new business model to major leagues League of Legends Championship Series (LCS), League of Legends EMEA Championship (LEC), and League of Legends Champions Korea (LCK).
This model is “closer to the one we’ve successfully implemented with the Valorant Champions Tour (VCT)” in terms of revenues driven by in-game digital items, according to an official statement by President of Esports at Riot Games, John Needham.
The goal of this change is to keep LoL Esports healthy and on a path to long-term sustainability so that it can generate enough revenue to cover the costs of production, teams, stakeholders, and more.
The new business model involves paying LCK, LCS, and LEC teams a fixed stipend and sharing revenue from digital content sales.
This shifts focus from sponsorship to digital content, which is more stable and scalable according to John.
A Global Revenue Pool (GRP) distributes digital revenue among teams based on tiers, performance, and fan engagement.
Riot increases revenue share and digital content quantity to support the GRP, eventually contributing 50% of other direct revenues like sponsorships and media after recovering investments.
This model aims to incentivize competitiveness and foster fan growth, benefiting both leagues and teams in LCS, LEC, and LCK. As for the LPL, John assures that efforts are underway to explore how their business model might develop in the future.
Notably, the announcement did not address any of the minor regions, including the Pacific Championship Series (PCS), Vietnam Championship Series (VCS), Brazilian Championship of League of Legends (CBLOL), League of Legends Japan League (LJL), and Liga Latinoamerica (LLA).
The new LoL Esports model, similar to VCT, will likely result in an increase in digital content featuring teams and players. This could include a variety of items such as player cards, emotes, icons, chromas, and skins.
The Valorant Champions Tour (VCT) is Riot Games’ competitive esports circuit for their first-person shooter, Valorant. In VCT, fans have access to various digital content for their favorite teams, like player cards, gun buddies, sprays, weapon skins, and team capsules.
They show their support for their favorite teams by purchasing these team capsules through in-game transactions. 50% of the profits generated from each team’s collection are shared with the teams throughout the season.
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