Rebuilding the EU LCS

How the EU LCS lost its way, and why a Champions League format might not save it

SEP 28, 2017

We’re in the midst of the 2017 World Championships, and yet an even bigger issue looms on the horizon for Riot Games. Last year it was the North American owners who challenged Riot, asking for a bigger slice of the growing LoL esports pie. When Riot finally settled their issues later this year, they promised they’d have an update on Europe’s future soon, but after months of silence, some owners had grown restless.

For Europe, the supposed salvation from European football giants teams never quite arrived. Schalke 04 were relegated after two splits, and Paris Saint Germain have been languishing in the Challenger scene for almost a year now leaving many other football teams weary of the risks associated with entering a seemingly unstable position. And so, the European teams waited for Riot’s announcement. In the meantime, they were questioning the sustainability of their investments in the EU LCS.

First came the admission from G2 esports owner, Carlos ‘ocelote’ Rodriguez, that he’d consider applying for the new franchised NA LCS. Then rumors swirled that apart from G2, three other major European teams had applied to join the NA LCS. Finally, these concerns reached a climax when H2K wrote an open letter to the EU LCS community detailing their issues with the way Riot was managing the EU LCS.

It seemed as though Europe was at risk of being torn apart by the events across the Atlantic and with Riot EU unwilling to consider franchising, many wondered if Europe would survive without revenue sharing. Soon after, an ESPN report outlined that Riot was considering splitting Europe into four minor regions, and Misfits owner, Ben Spoont, chimed in to confirm that Riot was indeed considering this major shift.

Fans were divided. Some liked that Riot finally recognized the need to focus on regional divisions; others were angry that Nordic countries were not represented in this system given they provide the most professional players. Others flat-out dismissed this attempt as Riot once again trying to shoehorn esports into the football system. These concerns are all valid, but they don’t do justice to what is a complex issue which will shape the future of the second largest region — in terms of player base — in League of Legends.

Europe vs. North America: The Atlantic Rivalry

Before we take a look at the changes that Riot is bringing to Europe, we must first look back to see how Europe got into this situation. For a long time, Europe was very clearly the big brother to their Atlantic neighbors. They won the very first LoL World Championship and CLG.EU and Moscow 5 challenged for titles throughout Season 2. The North American teams, meanwhile, very rarely posed much of a threat. What they did very well, however, was build brands, mainly centered around the booming streaming industry on own3D and Twitch.TV.

North American professional players like Doublelift, Voyboy, HotshotGG, and Oddone all had burgeoning followings on these services, and these followings proved to be very influential as the scene matured. Europe, on the other hand, had very few streaming personalities. Current G2 owner and former player, Ocelote, was one of the few European streamers with a following. For the most part, Europe dominated on stage, but it was off the stage, in bedrooms and team houses, where the Western LoL hierarchy would be decided.

When Riot took control of the LoL scene in 2013, Europe was given the prime time weekend slots. It made sense as Europe was the premier region in terms of results. CLG.EU lost narrowly in the Season 2 Summer OGN Finals — a league which would be known as the highest quality — and Moscow 5 had a cult-like following with their blunt and straightforward approach to the game. Players like Darien, Diamondprox, and Alex Ich were some of the biggest names in the world, and Europe’s dominance continued on stage against the North Americans. Fnatic took down Cloud9 in the Season 3 Worlds Quarterfinals to maintain Europe’s consistent Semifinal finishes.

Then, Riot surprised everyone. They decided to give North America the prime-time weekend spots, citing reasons like “accommodating international fans” and making North America more visible for Europe and vice versa. However, this was clearly a negative change for Europe. While it was true that Europeans could more easily watch the North American league with the switch, the European league actually became more difficult to watch as the games began while North Americans were at work or school.

While NA continued to build both its professional league viewership and its individual player streaming viewership, Europe was struggling. CLG.EU, which had renamed to Evil Geniuses and then to Alliance, had its roster revamped. Moscow 5, who had also been acquired by Gambit Gaming, were suffering due to the LCS being located in Germany where they were unable to get long-term visas. Soon after, one of the most famous teams in Europe was no more.

By Season 5, the European landscape had drastically changed. Besides Fnatic, many of the old guard had moved on, and new teams like H2k, Origen, and G2 Esports had emerged looking to grab a piece of the pie. Fnatic weren’t left unscathed either, as three of their longstanding members, sOAZ and xPeke left the team to start their own organization in Origen and Cyanide retired. The EU LCS was simply stuck in a rebuilding stage while the NA LCS was going from strength to strength, attracting interest from everywhere, from sporting teams to Hollywood.

What this whole situation boils down to is money. It’s a power struggle between people who’ve invested in a scene that began as an advertisement for League of Legends, not as a sport, but as a game. Of course, as it developed it became clear LoL as an esport had grown beyond that of an advertisement and spawned an industry worth hundreds of millions of dollars. And while it was clear to everyone that we were headed towards this trajectory, Riot held all of the chips when it came to the money in the sport, and these chips were almost all paid for by owners expecting a return on their investment.

So while North America benefited from Venture Capital investment and successful sports influence, Europe floundered. The North American region was centered around two countries which both spoke the same language and were culturally similar. Meanwhile, Europe spans dozens of countries and languages meaning large sum investments were hard to come by when most other industries centered their investments around smaller regions rather than the entirety of Europe. So while Riot’s investment in both regions in terms of lump sum payments to teams was equal, a monetary gap had emerged.

The Football Conundrum

Riot hoped that large football teams would be willing to invest in the European league to bridge this monetary gap. Unfortunately, the first few teams to join the league did not have any success, and that meant that other teams stayed clear and we never quite saw EU LCS dominated by the esports divisions of established football teams.

Firstly, besides the big Spanish, English and to a lesser extent, German, French, and Italian teams, most teams aren’t renowned beyond the countries they play in. That means investing into a league which is supposed to appeal to the whole of Europe makes little sense to teams which market themselves primarily to one country. So unless internationally recognizable brands like Manchester United or Real Madrid entered the scene, European teams would struggle to match NA teams for the foreseeable future.

So to spur investments without giving teams franchising, Riot has proposed a system with four leagues which play into a Champions League format. For now, confirmed details are sparse. What looks clear is that the four leagues will be centered around the UK, Germany, France, and Spain, following the current most successful national leagues.

The benefits of this switch are clear cut. Firstly, by focusing leagues around countries, teams can market towards a unified language, culture, and sponsorship base. That also means that national sports teams will be more likely to invest in esports teams since they will be focused on the same region.

However, there are negatives to this format. First off, it’s not known how many teams each league will have and whether there is enough talent to fill four different leagues. Even now with only two groups of five, many have lamented the lack of competition within some groups and splitting the league into what is essentially four groups will only exacerbate these problems. Secondly, making the national league games meaningful will be a struggle as Riot’s two split format already means that Spring split games especially lack meaning. Another drawback is splitting the EU viewership between national leagues. With viewer fatigue at an all-time high, will sponsors be willing to invest in leagues with lower viewership numbers?

Even ignoring all of these issues, something that can’t be overlooked is which teams will be going where? The act of balancing national league equality with the preferences of teams will no doubt create some difficult decisions for Riot and for team owners. Will teams stick around if they’re put into a league that they didn’t want to go into? And the big question remains if Riot doesn’t offer revenue sharing it’s banking on more sponsorships and potential football team investments to ensure teams stay afloat. If those don’t eventuate, how will Riot manage the increasing costs of team ownership without more investment or revenue sharing?

The Answer: A Salary Cap?

One such way of managing these increasing costs is by setting an exact limit on the amount teams can spend on players. Setting a salary cap means that teams have an understanding of how much they need to spend every year and Riot can subsidize these salary caps accordingly. Salary caps will also ensure that there will be a certain level of equity within the national leagues.

Of course, there are drawbacks to a salary cap. Unless Riot is willing to enact salary caps in every region, which would be highly unlikely, European teams will be unable to match the salaries that can be offered to players in free market regions. One way to offset this issue is to give teams a marquee slot which is exempt to a salary cap would mean organizations would be able to offer more money to their star player and ensure they remain in Europe.

Whatever the case, we’re unlikely to see any concrete details from Riot until after Worlds, and until then the new format will remain locked in mystery. What is clear, however, is the fact that Riot is losing interest from both teams and viewers in the second biggest region in the World. Their next move will shape the future of the European region, for better or worse. And if it doesn’t get it right this time, there’s no guarantee it’s going to get another shot.

Photo Credit: Riot Games