“We, 10 teams creating the LCK franchise (from the following referred to as LCK) have come to consensus, and require LCK to change to maintain the strength of the tournament during the past 3 years. However, everything has fallen into a situation that cannot be resolved smoothly,” the general statement of the 10 LCK teams started with steel affirmation.
“Accordingly, LCK teams discussed structural issues and difficulties that have been publicly notified to them. With the approval of most teams, we will clarify the stance as follows. At the same time, we want to inform that the rest of the teams do not object much about the direction of change, but they cannot participate in this joint statement for different reasons in the procedure.”
When the LCK tournament franchise began to be applied in 2020, the teams believed and participated in the vision: “The best global eSports tournament in the world” that Riot Games presented. With that trust, the teams have made every effort and fulfill all possible obligations, through investment with world standards for players competing at LCK. Through that, the LCK tournament has achieved impressive achievements about the brand since its debut, and the approach, achievement as well as the loyal audience of the tournament have continuously increased.
However, despite such continuous growth, the LCK team has not been able to develop the business value of the tournament in the past three years. Obviously, the growth of LCK's viewers has contributed greatly to the maintenance and retention of the League of Legends, stimulating revenue and business growth, but the LCK's distribution profit is decreasing year by year.
The LCK tournament has never achieved the revenue target they have set since its launch. In addition, the amount of allocation paid to teams in the past 3 years is significantly less than other regional tournaments. In contrast, LCK does not share or convince all partnership teams about specific vision and plan to improve the current situation.
Above all, teams are very worried about reducing investment in League of Legends and LCK of Riot. Situations such as players cannot train normally because they are delayed to provide servers for the training match, or the frequent error arising in the gaming server is still constantly occurring. In addition, the employees of the LCK tournament in important parts and items are constantly leaving, making the tasks really urgent to develop the tournament are delayed or suspended.
For this reason, all teams are really worried that investing in LCK and nurturing players is no longer a sustainable model. The teams said that the LCK tournament is changing the responsibility of growth and survival to the players and the team without solving the basic problem including the business structure.
However, all 10 teams still believe that LCK is likely to achieve great vision together. The teams still intend to make continuous investments to stick with fans and players for a long time. Accordingly, we would like to ask all the people involved under Riot, including the LCK Commissioner, please actively talk to the teams for the sustainable future and the better ecosystem of LCK. First, we ask for specific answers on the following issue.
1. Expanding investment in specialized manpower LCK and sharing the trust of the Commissioner.
2. Reasonably improves the tournament business structure, including revenue allocation.
3. Solving the issue of annual LCK matches, less significant compared to other professional sports.
4. Solving features in the game to improve the training environment.
5. Planning and implementing the business model is linked to links with the League of Legends game
In the end, I will reveal why teams decide to publicize the stance. Over the past three years, teams have repeatedly conveyed their opinions on “Building the tournament and sustainable team structure” in many different ways. However, LCK is only consistent with unilaterally conveying Riot's policies. In the last negotiation, we received a warning that if the teams deliberately made a common opinion rather than reaching a satisfactory agreement with LCK, there would be a penalty. Therefore, teams are always forced to be responsible and fulfill their obligations as a member of LCK, without receiving any benefits and growth together.
At the same time, in the general statement, the LCK teams attach the press release to prove their stance:
– LCK is promoted as a global professional sports tournament, with higher access costs than Korea's leading professional baseball tournament.
– However, compared to baseball, the annual match of each team is only 1/4 and the annual revenue of the tournament includes the right to broadcast and the general business revenue is less than 1/10.
– LCK professional teams are investing and providing the best infrastructure and remuneration in the world for annual electronic sports athletes. The reason is that when we become a global tournament, we expect a bright future of business growth (increasing revenue) that the company companies proposed.
– The world's leading sports stars – Faker and Deft, have won the second world final championship and the Gold Medal at the Asian Games for Korea.
– Teams are concerned that the purpose of the Esports tournament is not giving priority to expanding revenue as a business. Because, on the position of game companies, the number of viewers of E-Sports increases, the number of users of the corresponding game increases and the natural game revenue increases, instead of the tournament revenue.
– Summary of business achievements in 3 years since the franchise of 2020 LCK launched:
The accumulated deficit of 10 teams: more than 100 billion won (about 800 million won per team for 3 years).
(Source: Summary of published data and internal supply of losses and revenue of gamers)
– Instead of confronting the tournament, the teams encourage the development of professional sports feders, add more organized manpower and together build goals to have a better business structure. “
Two days later, on January 19, LCK immediately had an official answer to this information, through the press release. In particular, LCK protects its position, and rejected the information on applying legal sanctions to LCK teams:
“Hello everyone, we are LCK.
Recently, some LCK teams have publicly made requirements for the tournament. We are extremely worried and sorry when they choose this method to make requests, although we have constantly discussed and advised each team on important issues, including the partner model issue of the tournament.
Creating a healthy and sustainable LCK tournament is always optimal and our vision. Since the long -term partner model began to be implemented, LCK has been constantly striving to expand the business of the tournament, bringing joy to the fans, increasing professional competitiveness between teams in general and individual players in particular. So far, the tournament has applied a lot of ways to handle financial problems as follows:
– Division of revenue equally, not just dividing net profits from the tournament
– Set the level of revenue division to create stability for unfortunate teams to fall into an unexpected recession.
– Flexible adjustment of payment time in accordance with the financial situation of each team and postponed payment of the remaining entry fee. Therefore, up to now, only about 50% of the entry fee has been paid.
– Applying licensing to companies and offices to manage and grant the right to nurture and balance spending.
Moreover, stating that teams may be disciplined in case of general opinion is not true. The penalty will only be given in case some teams claim that they are representing the general opinions of all 10 teams, but in fact there are some teams that do not approve this representative rights. If the statements do not respond to the representative accuracy, it can be considered fake and will be handled in accordance with the law.
We do not have a public discussion about business with partners, and we will continue the privacy with all 10 teams, as we always do until now.
As always, we also hope to continue cooperating with partners to develop LCK. Thank you very much. From LCK ”.
