Schalke 04 joins the EU LCS in 2018

2018 EU LCS changes helping or hurting Europe?

Riot is rolling out big plans for European professional League of Legends, according to a recent report from ESPN esports. Jacob Wolf’s sources outlined a new format for the EU LCS starting in 2018, which includes “the league…[splitting] into four regions… 24 total teams,” “a number of group stages and a double-elimination playoff bracket,” and “a multi-year license from Riot Games.”

These updates come in response to several instances of dissatisfaction from organizations that own teams in the EU LCS. Top-tier European teams applying to join the NA LCS in 2018, and H2K’s recent public announcement to the community are two recent, high profile examples. These organizations cite financial unsustainability and insecurity as primary causes of strife within the EU LCS.

Maintaining the current promotion-relegation model creates an environment of uncertainty and risk for LCS teams, which scares sponsors from making high-value investments. European organizations also suffer from a more fragmented, regional market, when compared to those in North America. Without more certainty for organizations, and without the possibility of larger investment, the value of EU LCS slots has stagnated.

As reported by TheScore esports, EU LCS viewership is on the decline, especially when compared to the NA LCS. While Riot has developed and announced plans for franchising in the NA LCS next year, fans and players are worried that the EU LCS will suffer without serious change. The newest report shows Riot EU is looking to bring needed changes in the following areas.

BUSINESS & FINANCES

Misfits Academy sold to Mysterious Monkeys for $400,000

Image from LoL Esports Flickr

First and foremost, these changes aim at improving the economic environment of the EU LCS. Growth and excitement in esports, professional League of Legends included, revolve around money. Viewership, audiences and fans create opportunities for advertising, which allows developers, like Riot, to monetize the broadcasting of their games. Business organizations, such as Roccat or Splyce, view esports events as opportunities to advertise their products by sponsoring teams to compete. Players and coaches see esports as opportunities to make a living.

The decline in EU LCS viewership and the maintenance of the promotion-relegation model, coupled with the immense potential of an expanded, franchised NA LCS, present problems for European League of Legends organizations. While other regions and esports are taking major steps forward to increase revenue opportunities, the EU LCS is lagging behind. For example, while North America’s most recent LCS slot purchase (FlyQuest) clocked in at $2.5 million, Europe’s (Mysterious Monkeys) only sold for $400,000. Mysterious Monkeys was relegated within one split of entering the EU LCS, demonstrating the riskiness of such a venture.

From a financial perspective, the most compelling portion of Jacob Wolf’s’ report states “Participating teams will be granted a multi-year license from Riot Games to compete in the league, but a hard date on those licenses has not been established, sources said. This means teams won’t have to fear the possibility of relegation from their domestic leagues.” Doing away with relegation boosts the security for teams within the league, which, in turn, makes them more attractive as investment opportunities. This change removes the risk of a team, like Mysterious Monkeys, entering and exiting the LCS within a split or two.

Another element that should affect the business side of the EU LCS is the localization. Since there will now be four domestic leagues centered in Berlin, Paris, London and Barcelona, companies and organizations with more ties to specific locations may be more likely to invest. Spanish businesses may be drawn to sponsor a team in the Barcelona league, while French agencies might invest into Paris. Assuming this localization is more attractive to European investors, splitting parts of the LCS should be a beneficial move.

A final, less direct benefit of these new changes is the fact that Riot EU has tangible plans for next year. Financial backing is impossible without clear, executable strategies for the future, especially when organizations are targeting investments that may not return over several years. Once Riot unveils more detailed plans, organizations, team owners, sponsors and investors can begin to seriously consider their financial future with less uncertainty.

The only possible problem with the new EU LCS league format would be the need for more overall investment in a short period of time. There are currently 10 teams in the LCS and six teams in the Challenger Series. The reported 24-team league would require eight additional professionally funded organizations. This would mean each localized region would need to find two additional major organizations to enter the league from scratch. It is unclear if this is feasible. However, Riot EU has most likely analyzed the market to a point to determine this as a realistic goal for 2018.

COMPETITIVE INTEGRITY

Fnatic Academy sold to Ninjas in Pyjamas for $500,000

Image from LoL Esports Flickr

When talking about professional sports and esports, the competitive environment is of utmost importance. No one wants to watch matches that are excessively one-sided or low overall quality. The EU LCS has not struggled too much with these two problems up to this point, but the new reported format could have an impact.

Riot will break up the EU LCS into four regional leagues. The  increase in overall league size will bring in at least 40 new players to the big stage, most likely more. This will have an effect on competitive integrity by drawing in a larger pool of players, which may not be impactful immediately, but it will train a mass of players as professionals.

The second part of the reported formatting that will affect the competition is this:

“The top two teams of each domestic league will automatically qualify into the greater league, which will run alongside the competitive seasons of the domestic league, similar to the Champions League, according to sources. The third- and fourth-place teams will compete in a play-in, while fifth and sixth places will play in an open qualifier. The greater league will house a total of 16 teams, with a number of group stages and a double-elimination playoff bracket.”

Paris, Berlin, Barcelona and London will now have their own domestic leagues with six teams representing each. These teams will play within their locality first to qualify for the greater league and the play-in. This format will create competition by having all teams competing to get into the greater league, rather than having only the bottom two LCS teams facing off against the top two CS teams for slots.

The major downside to this is that there will most likely be even more striation within localities than what currently exists in the EU LCS. For example, during the regular season this year, Group A created clear first, second, third, fourth and fifth place teams with Fnatic being a couple of wins ahead of G2, G2 a couple of wins ahead of Misfits, etc. Imagine this concept stretching to four groups, and that layered effect may be more extreme.

On the flip-side, this may create more competition, just more often at a lower level. Unicorns of Love may be able to crush all of the teams in the bottom four, but maybe the fights for third through sixth within the Berlin locality would be closer. Maybe the greater league will have closer match-ups more frequently between the bottom 10 teams, while the top six continue to duke it out for championship points.

It is also possible the concentration of high-profile players will decrease if the team market expands. Instead of having several star players within a few rosters, and less notable players meshed together for Challenger teams, perhaps more teams will be able to sign one of the very best and build around them with lower-profile and rookie players. 

FAN EXPERIENCE

Origen may rejoin the EU LCS in 2018

Image from LoL Esports Flickr

Esports are nothing without an audience. This is where the cycle of monetization begins, and a major factor in the success of professional League of Legends. Making headway with EU LCS fans is vitally important to the future of the league. As stated earlier, viewership for the EU LCS has been on the decline, so investors, organizations, teams and players are looking at Riot to make changes to address the issue.

However, Wolf’s report does not really touch on this part of the conversation, leaving many questions unanswered. With so many more teams, there must be many more games. How will this affect streaming? Will Riot schedule simultaneous broadcasts in Paris, Berlin, London and Barcelona? Will they be in their native languages, or English for all? Are these going to be best-of-ones, twos, or threes? Are these the only changes directed at gaining more viewers?

Audiences have expressed dissatisfaction with best-of-ones and best-of-twos in the past. The two group format for 2017 has also been underwhelming. Splitting even further into four groups may make everyone even more fractured, causing viewership to further decline. If fewer of the match-ups are of higher competitive quality, then viewers may elect to spend time watching other regions, rather than Europe.

There is also the question of production staff. Can Riot get enough casters and analysts to effectively carry four different domestic leagues? Will the quality of the overall production decrease in response to the increase in the total amount of production? The EU LCS already has less week-to-week content when compared to the NA LCS. Will stretching those resources across more broadcasts affect this disparity?

Hopefully, more information will come to light to address these concerns. While it is understandable that Riot may be primarily focused on the health of organizations and the financial future of the league, they cannot completely forget about the fuel for esports: the viewers. Creating opportunities for investment into the league is not enough. Viewership has to scale with the investment, or else it will all be a sink.

PLAYERS’ & COACHES’ WELL-BEING

Paris St. Germain may join the EU LCS in 2018

Image from http://lol.esportsmatrix.com

The EU LCS is not the EU LCS without its players and coaches. These are the individuals that train day in and day out to achieve peak performance and beat all opponents. Professional League of Legends, and esports as a whole, would be nothing without them. Organizations sign contracts with these people to provide them enough resources to get on stage, play the game and gain viewers. Investors have no business in the EU LCS without these talents.

Of course, there is a bit of cyclic nature to professional esports athletes. Money and material gains are the incentives that bring high quality talent up to create professional teams. High quality players need to exist for audiences to watch regularly. But the players may not play if the financial incentives are not high enough.

It is unclear how these changes for 2018 will affect players and coaches in the EU LCS. Will most players’ and coaches’ salaries go up due to an overall larger pie, due to investment? Will the top players and coaches maintain the same pay and benefits, while only nascent teams bring in new money? Is it possible that the top players and coaches already make too much money, and they may see a decline, as the market expands into four separate leagues with more teams and players available to choose from?

The report also does not mention anything about revenue sharing or players’ associations, akin to the announcements for the NA LCS. While owning organizations and teams may be gaining more investment opportunities, there is no guarantee that players, coaches or other staff will actually benefit. Players and coaches should expect higher salaries and more resources, but that may be naive thinking. Some investors may simply view these updates as a chance to recoup losses before expanding their costs in any meaningful way.

OVERALL

Challenger teams may join EU LCS in 2018

Image from http://windandrain.org

These reported changes do seem to be overall beneficial for the EU LCS in the grand scheme. Creating four district leagues that compete alongside a greater regional league seems to address European investors’ issues with the small, localized markets. Removing relegation and introducing multi-year licenses should ease organizations’ fears of the risk-reward nature of the league. Formatting the LCS to include more teams may create a healthier environment for developing more European talent, upping the overall competitive spirit.

There are some concerns with regards to the logistics and quality of broadcasting, as well as the effects on players and coaching staff. These should be addressed more in-depth in the near future. More steps may need to be taken by Riot EU to ensure that these increased economic opportunities are not lost on the individuals that make esports work at the end of the day, audiences and players. Higher investment ceilings only mean so much if there are no consumers to drive the advertising and monetization of the broadcast.

Finally, organizations have been rather quiet in response to Wolf’s report. This silence may be due to non-disclosure agreements with Riot EU. However, considering how vocal owners and organizations have recently been, one would expect more public announcements expressing thoughts and feelings on the subject.

In the report, Wolf mentions “other teams with ventures in League of Legends, such as Paris Saint-Germain, Origen and Red Bulls, have expressed interest in participating.” Misfits’ owner, Ben Spoont, gave some brief insight on Reddit, and former H2K manager, Chris Kalargiros, wrote an opinion piece for Blitz Esports. However, not much else has been heard from the rest of the professional League of Legends community. This may turn out to be a critical moment for European League of Legends. The community is waiting for more clarity from European organizations.


Featured Image: LoL Esports Flickr

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Bot lane main out of Virginia. Love to run. William and Mary Class of 2013. League of Legends esports writer with The Game Haus since January 2017.

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