Deilor on LCS franchising: "In five years' time, why would anyone invest anywhere, if they can never make it to the LCS? There’s no growth."
Photo by: Riot Games

Deilor on LCS franchising: "In five years' time, why would anyone invest anywhere, if they can never make it to the LCS? There’s no growth."

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To say the European community was unaccepting of Riot's original plans to reorganize EU LCS would be an understatement. The company's proposed reforming of the league into regional sub-divisions — although perhaps designed to cater to the peculiarities of the European market — invited vocal responses from industry insiders. In open letters, organizations like H2K and Unicorns of Love expressed their concern and pointed out the difficulties associated with running an LoL team in Europe.

To address these concerns, Riot announced in October their plans to bring a franchise model to EU LCS, similarly to their NA LCS model, but this move might bring a whole other set of problems for the EU market. To better understand the business dynamics of the region, we reached out to former Fnatic coach 

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In your first post on on your new Facebook profile, you mentioned that you weren’t happy about the changes coming to Europe. In particular, that Riot couldn’t just copy the NA model. Was this in reference to the changes to the Challenger Scene, the LCS, or both?

There were multiple questions in this. I think the NA and European markets are different in the sense that NA is one big market. It’s united. Sure, it’s not one big country, and you also have Canada, but it’s basically the same market.

Whereas in Europe you have a fragmented market. There are many different countries with many different languages. This presents us with multiple challenges. First off, if you have an English stream in NA, that’s going to work perfectly, but if you have an English stream in Europe, it might work more or less. All the countries more or less speak English, but in reality the southern countries don’t speak that great English.

Another factor are sponsors. In NA, if you want a sponsorship, you talk to Asus or any other big name brand you want. You talk to them, and they have a budget labelled USA. But if you go to Europe as an LCS team, and you go to a sponsor, you’re talking to Asus Germany, not Asus Europe. The budget that you have access to, is going to be fragmentet per market.

On top of that, NA has a long history of franchising, with the NBA, NFL and the other sports. In Europe, however, we have a completely different model than these basketball and football leagues. In Europe, we have relegations. In Europe, this is very common, and I think it largely has to do with how both systems treat talent.

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Let’s use the NBA as an example. Before reaching the actual NBA, you have all these high school, college and university leagues. You enter these teams and from there you get drafted to the real deal. They grow up in these mini-professional environments that are somehow connected to your studies.

In Europe, things don’t work that way. Here, if you’re a kid who plays basketball and you’re really good when you’re 10, then you get to play with the team in your town, or city. But on your own time. Then, if you’re good, you get to play on a team in your region, and if you keep improving then a league in your nation, and so on. The difference is that you’re not connected to these establishments, like universities and so on. And because of this, you’re not drafted while studying [not paying for studies by playing — Ed.]. In Europe, if you play high level, it’s because you’re hired.

So from my point of view, it would make sense if Riot based their European leagues on this model. If you want to franchise in NA, that's awesome due to the single massive market and the way sport is integrated into everything. But in Europe, taking into account that we have like three times more players — a massive pool — a fragmented market and a culture of people who are all used to competing like this in other sports… Why not spend the money developing these kinds of Leagues for the players?

I mean, let’s say you make an online league for under 14-year-olds, an online league for under 16-year-olds, and so on. So it looks like the sports clubs we all grew up with. Use the money to build a system in which talent can grow, so they can get properly hired by organisations. I think it makes much more sense mimicking what sports have been doing in Europe, and putting money into the younger generations, because they’re what will allow the games to continue.

Photo by: Riot Games
Photo by: Riot Games

That begs a different question then, though, doesn’t it? With what you’re saying here, there’s obviously a lot of cultural gravitas according to how Europeans see relegation. We all grew up with it, it’s how we understand sport. But if you think about relegation for a moment: a lof of your fans are tied to you via geography. You mentioned it yourself. You grow up, you play in your town, then region, then country. With esports however, there is no town. No region. Does it make sense to view esports through the lens of physical sports, when the constraints, the geography, doesn’t exist?

Relegations obviously has some issues. First being that the organisations that are already established obviously don’t want it. As you just said, esport teams can lose their fanbase and so on. But I would argue that the organisation that gets relegated and loses its fan-base have done a really bad job. What you see in the LCS — we’ll use that one, since it’s what I know best — is that a few orgs will do a really good job of getting their message out there. They’re good at engaging with the fans. But the rest of the orgs do very little. So yeah, if an org who does very little gets relegated, then they’re doomed. Sure.

But let’s say that Fnatic get’s relegated. Fnatic isn’t going to lose their fans instantly because of that. They’re too visible. Besides, getting relegated is a consequence of doing things wrong. You’ve created a roster that isn’t working, with coaching staff that doesn’t function and so on. Relegation should be seen as a way of bringing in fresh blood, when the league needs it. So right now in Europe, what has been happening is, you have the LCS Challenger and you have regional leagues.

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What we also have is a massive talent pool that can move upwards. But if you don’t have relegations, how are these teams and players going to go up? In NA, they fix this with the draft system. Even the good players don’t get to stay. But that would mean you’d need a draft system in Europe.

Also, I understand that the fan-base is connected geographically in traditional sports, but it’s not the same in esports. Here, whoever has the better marketing and whoever figures out how best to interact with them, is going to have the biggest fanbase. So, if you don’t have any marketing, if you don’t interact with your fans and if they can’t relate to your players… And you then get relegated? Then you fucked up in your marketing and your sports.

Basically, an esports organisation has two things they must do. One, get money from sponsors; and two, win tournaments. To get money from the sponsors, you need fans who want to watch you play. To win, you need a team. So you have two jobs and you basically failed both. So you get relegated, and that means you get crushed? Well… Yes?

But let’s pretend that Europe removes relegations. You have an organisation like the one I just described. You now have a bad organisation. In the LCS. Forever. That’s bad.

Screengrab via: YouTube
Screengrab via: YouTube

I’m trying to separate Challenger and LCS topics. But we keep touching upon both, and I think maybe in the end, that the solution to a European style LCS must include Challenger. I think we have to talk about how we sort this whole “multi region” thing, which brings me back to the fractured market.

One argument a lot of people make is: Let’s assume you have a French sponsor, which has no business in Germany, so they’re not going to sponsor you therefore. They therefore can’t be that big, and won’t pay you a lot of money. They just want to do a French sponsorship. But a French market alone won’t keep this game alive. The French were cool during Paris, they were great, but they won’t keep League of Legends alive on their own. They’re not big enough. How do we tackle the fact that you need the global scene to survive, but sponsorships are endemic to their nations?

Well you’re right that any country alone can’t make League of Legends succeed at a European level. But France probably has enough power, to make League a success… In France. I know that’s what it’s like in Spain, so I’m assuming other countries are similar.

So in Spain, we have a team called Baskonia. They’re a basketball organisation with a League team. Then we have Giants and Asus and all these teams have former LCS players. These teams are attracting top level talent. They don’t lack money. The team I work for, Movistar Riders, I think are using the smartest method to run their team. They have a massive sponsorhip with a Spanish telecom. The telecom has a tv channel, phones, internet. All the usual things. And think about it: esports merges perfectly with all these things. It’s the perfect sponsor. There’s a demographic out there, of roughly 16 and up males, who don’t watch tv. How are you going to reach these people better, than through an esports org? And we’re not alone. Vodafone has a team and the league itself is sponsored by a third telecom.

If you try to force everyone to be identical, it won’t work. The markets aren’t the same, the populations aren’t the same.

So my claim is, why shouldn’t this be able to happen in France, or England, or Germany, as well? We even see it with Germany, where you have Schalke04. So my question is, why shouldn’t these countries be able to organise their own leagues? Have all the regions, and then end up with a sort of Champions League (the top teams from every region, enter a special league of their own).

Now, Riot tried to do something like this, but it seems like it exploded. I think where it failed, is that they were trying to control everything too much. Obviously, I don’t have all the info either, but from what I could read, it looked like they wanted four teams in every region. And they’d compete and then one would go to the LCS. But they wanted to keep this LCS structure.

I think it would be much better if every country organised themselves, and then a European league on top. And to enter the leagues, you’d have a qualifier. So the countries in Europe would all be wildcards, and they have competitions and fight over who gets in.

Now obviously, in the short term, this will probably be a lot worse. Brands wouldn’t be happy with putting money into teams who were suddenly smaller. We can use G2 [as an example]. G2 on a European level is much bigger than G2 on a Spanish level. They have a team on each place, and they’re not the same. But the player base in Europe is big enough to sustain it, and the orgs are getting more money so I believe we’d reach a point where it would sustain itself. I don’t think it can work, however, if Riot is trying to control the whole structure.

Let’s pretend that Spain wants to have 10 teams in the first division, and 10 teams in the second, and then they want to have a third division because Spain has a ton of teams and players. But France only wants 8 teams in their first, and has no second. Then let it be that way. The competition will ballance out eventually. But if you try to force everyone to be identical, it won’t work. The markets aren’t the same, the populations aren’t the same. Riot assume that Europe works as one. We don’t.

Photo by: Riot Games
Photo by: Riot Games

Don’t we risk a situation where the only reason regional leagues exist,is to provide the LCS with a talent pool they can poach from? Will it hurt the leagues if they’re run separately, instead of together?

Hmh, I’m going to tackle this one from a different angle, so bear with me. I think there are two approaches. Top-down, and bottom-up.

Top-down is pleasing the existing teams. If you go to an LCS org and say, “Hey, you have to move to this country, and you have to play only here, and you can be relegated” they’ll say of course they don’t want that. Let’s stay in Berlin and let’s franchise so I can’t lose my investment. But if you do that, what happens with everyone else? The ones who aren’t in the LCS. Where are they going to go? There’s no relegation, so a new spot isn’t going to come along. There’s no access.

In five years' time, why would anyone invest anywhere, if they can never make it to the LCS? There’s no growth. But if you go bottom up instead, you create a structure where all the talent has a chance to make it to the top. If you have the chance and there’s a clear structure of how to get there, then you’ll work for it. Sponsors will see them compete and find tournaments where they can drop money, and fans can access the games.

I think the ecosystem is more important, so I’m clearly in favour of bottom up, over top down.

In five years' time, why would anyone invest anywhere, if they can never make it to the LCS? There’s no growth.

Ok, but what can Riot do then? Assuming right now that franchising is happening, how do we get the best scenario out of this?

You need to make a system where talent can go upwards. Whether it’s NBA drafts, European football league relegations or whatever, but we’re playing a game that’s not constrained by location. So… Why aren’t there any internet leagues? Under 12, under 14, under 16… Why aren’t we making an environment in which people can compete and move upward through the ecosystems. But as it is now, third parties can’t really host tournaments to make this happen. And I think this is limiting a lot of the growth of the game.

I think Riot should be aiming at making League an eternal game, so to speak. To do that, you need to invest heavily in the youngest players. They’re your new pro’s in five years' time. They’re the ones keeping this alive.

So… kind of like football? Loads of kids play an infinite amount of tournaments, because no one owns “football”. Obviously, FIFA owns FIFA and UEFA owns UEFA, but anyone can create a league and spread the game to all the clubs… Is this what we want? Do we want a football based League of Legends, where every team is a Schalke04?

I don’t know really. I mean, Overwatch is sort of doing it, aren’t they? There’s a massive fee to get in, they all represent a city. Maybe that’s the way esports is currently moving, and maybe I just don’t understand it, but I know I don’t agree. This is exactly what I said before about the top-down approach. They’re trying to get big money to invest in esports and take care of these top teams, without taking care of how talent is rising to the top. I think it should be the other way around. 

Photo by: Riot Games
Photo by: Riot Games

So what’s the biggest challenge that the teams face? For the endemic teams, without limitless funds, what are some of the biggest pressure points that they have?

For the last few years, it’s easilly the amount of money that’s coming from outside esports. Three years ago, a team was made because someone really enjoyed sports and was a professional player. So they created one. That’s no longer the way. Now it’s “an NBA franchise got interested in esports” and they’re dropping millions on it. So if you’re a team without private investment, like Fnatic, Team ROCCAT or Unicorns of Love, it’s going to be really difficult to compete. Venture capital money is entering the scene, and it’s raising everyone’s salaries. So suddenly things aren’t growing organically anymore, which forces the endemic organisations to get VC money too.

Speaking of that, we can’t really ignore the fact that NA currently has all the money in the world. How does that impact Europe? How do they compete with that? Can we deal with the fact that everytime we get a Bjergsen, they look at us and go, “Well we have all the money, why doesn’t Bjergsen become an American?”.

Venture capital money is entering the scene, and it’s raising everyone’s salaries. So suddenly things aren’t growing organically anymore

I don’t actually think that’s a problem. We have so many more players than they do. We have twice their population. So with a bigger playerbase comes a bigger pool of players of equal quality. At the end of the day, NA can’t just hire every single European, or Korean for that matter. Especially with the import restrictions in place. So the best way of ensuring that enough people reach top level, where losing a few to NA doesn’t matter, is to make sure that we have a system to train them.

When a normal team creates their roster, they hire the best five that they can access. Then the best coach they can access, followed by the best analyst. From here, you get a great roster that works perfectly, or at the very least meshes, kind of like Fnatic in 2015. Lots of rookies, but everything worked fine. But this isn’t normal. What tends to happen, is that the team will have conflict. Sure, if you’re lucky, the team is able to form around some key players, while others are willing to sacrifice, but you can’t count on that.

So instead of getting the best players for every role, we instead find a team that matches the level of our coaching staff. If you get five LCS players and a rookie coach, they’ll eat the coach. You need balance. So we have analysts, coach and assistant coach for the main team, and then running a 10-man roster. This allows us to constantly sub in and out to test synergy between players, as well as adding an edge of competition to it. They all want to be the one who starts, so they’re trying to improve all the time. So my suggestion is: do this for the top teams. And the ones just beneath them. And the regional teams, etc., all the way down. This way, every team has two coaches, two analysts, and these rosters going head to head.

Now, some will say this will cost more money, but you’re only investing more money if you’re hiring the most expensive players. You can get this entire structure set up for the price of one “star player team”. But now, instead, you have a training facility for making your own stars. Sure, in the first 2-3 months, this team will have worse results than an all-star team. But the environment is so much more built for growth. With a normal set-up, every year you have to rebuild, because your best players got hired by teams with more money. But if you have a 10-man roster, you’ll just sub in a player you’ve already been training for many months. There’s no slump. Coach gets hired? You have another coach who knows your players and organisation etc. You’ve invested in a system that allows your organisation to continue, without risk of collapsing on itself every split.

So yeah, NA has more money? Great for them. But we should focus on having better structure, then it’s not a problem.

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