Riot Games has delivered a 12 month ultimatum to parties that have ownership conflicts in the North American League of Legends Championship Series.
From 2018 onwards the NA LCS will feature 10 franchise teams rather than the previous system of relegation and promotion from previous seasons.
This will include four teams that have had no previous history in League of Legends – OpTic Gaming, 100 Thieves, the Golden Guardians, and Clutch Gaming.
The Golden Guardians and Clutch Gaming are brand new organizations owned by the Golden State Warriors and the Houston Rockets.
100 Thieves, a team owned by former Call of Duty player Matthew ‘Nadeshot’ Haag is also relatively inexperienced but recently received funding from the Cleveland Cavaliers, another NBA team.
OpTic Gaming is one of the biggest brands in esports and was recently purchased by the Texas Rangers’ co-owner Neil Leibman.
— Dexerto.com (@Dexerto) November 21, 2017
There are similar stories for other endemic teams to the league like Cloud9, Echo Fox, CLG, FlyQuest, and Team Liquid. Team Liquid sold majority interest to aXiomatic which is a group that included Warriors co-owner Peter Gruber and assistant GM Kirk Lacob.
In fact, TSM is the only team that remains in the league that does not have major outside funding or investment.
Unfortunately this appears to have created a few conflicts of interest where investors or part owners of one of the LCS Franchises are also involved in some way, shape, or form with another – breaking Riot’s rules.
A report by Sports Business Daily has outlined some of these conflicts and revealed that Riot Games has given the parties involved a total of 12 months to fix these conflicts:
Riot prohibits any individual from owning stakes in multiple League of Legends teams. The Warriors own Golden Guardians, but Guber serves as Chair of aXiomatic. Also, Warriors assistant GM Kirk Lacob is an aXiomatic investor and Warriors Exec Board member Chamath Palihapitiy is an investor in Cloud9. Riot has given the parties 12 months to fix the conflicts, either through divestment or the creation of new operating entities with a separate cap table.
The new season of the NA LCS will be the start of a new era of franchising for esports. The Overwatch league is following a similar model, while other major esports are currently remaining with their endemic teams and open circuits.
The likes of Valve, the developers of CS:GO and Dota 2, have tended to maintain a rather hands off approach to the esport side of their games – sponsoring the Majors and The International but avoiding interference where possible.