H2K has published a letter to RIOT, demanding changes in the financial management of LCS.
In a lengthy open letter to RIOT, H2K criticised the company that created League of Legends and claimed that the current LCS model is unsustainable. “The financial arrangement between RIOT and the teams is unfortunately backward and upside down,” reads the letter, co-written by H2K CEO Susan Tully and Co Chairman Richard Lippe. This was no toothless criticism, however. H2K threatened to leave the league if RIOT do not make changes before the 2018 season: “Accordingly, H2K ownership has made the decision that we will no longer financially subsidize RIOT and will not continue in the EU LCS beyond the 2017 season UNLESS RIOT creates a new financial and operating structure.”
This is not the first time RIOT has come under fire for its management of LCS teams. Ex-OGN commentator Monte Cristo famously championed a franchising system before he left the scene to commentate on Overwatch and the ensuing pressure encouraged RIOT to introduce such a system, doing away with promotion and relegation for next year. But this is the first time a team has outright threatened to leave the league, and despite H2K’s poor performance in the recent playoffs, they have been one of Europe’s most successful teams in recent years. The loss of H2K would come as a powerful blow to the European LCS, which already averages less viewers than its American cousin.
Tully and Lippe went on to express specific details of what the changes they wish to see from RIOT:
“RIOT must provide the EU LCS teams with the realistic opportunity to earn through subsidies and revenue sharing, minimum compensation of at least €850,000 per year. Recognizing that as teams we must perform and contribute to the success of the league, we accept that a portion of the revenue sharing should be based on competitive performance, viewership, effective branding activities and other reasonable metrics. Also, critically important to the teams is that any planned changes to the EU LCS structure planned by RIOT for 2018 and beyond must actually increase the value of the legacy team slots and not diminish them.”
This is a stark contrast to the situation as it stands, according to the H2K organisation. “We incur annual losses of over €1,000,000,” the letter goes on. “The fact is that most League of Legends teams lose money.” RIOT has yet to reply publicly to the letter, but such a damning level of criticism from a major European team is unlikely to go ignored for long.
