League of Legends Franchising, Compared to the NBA
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League of Legends Franchising, Compared to the NBA


The North American LCS will be franchising
in 2018. That means no more relegation, and a lot of
structural changes to the league system. Let’s break down some of those changes in
comparison to another major franchise system: the NBA Franchise systems turn team owners into permanent
partners, meaning the same teams play every season. And because nobody leaves the league, it’s
harder to join. In the LCS, Riot will be choosing ten franchise
teams through a strict application process. Organizations will send proposals on how they’ll
handle their business, from branding to salaries to general management. After that, Riot will do some snooping into
their credit and financial histories. And then this November, Riot will announce
the franchise teams. In the NBA, the current team owners can vote
to add a new expansion team, but this happens very rarely. More teams in the league means more competition
for talent and revenue. The last team to join was the Charlotte Bobcats
back in 2004. For teams already in the LCS, it’ll cost
10 million dollars to join the franchised league. New teams will have to pay Riot an extra 3
million on top of that. The cost is meant to bring in serious investors,
but also to raise capital for the league. When the Charlotte Bobcats (now called the
Charlotte Hornets) joined the NBA, they paid a 300 million dollar fee. That money is split among the existing team
owners, to make up for the downsides to expansion. With NBA teams growing in value, the joining
fee would probably be way higher today. The last NBA team to be purchased, The Hawks,
went for $850 million. And for more popular teams, well, The Clippers
back in 2014 were sold for 2 billion dollars. Franchises use revenue sharing to keep mega-popular
teams from dominating and to help smaller teams stay competitive. The LCS will use revenue sharing to split
money between Riot, the teams, and players. Both Riot and teams will contribute some money
to a revenue pool from media rights, sponsors, merch sales, and team-branded digital goods. 32.5% of the total league revenue will be
allocated to teams — half of that amount is split evenly to each team, and the other
half will be used to reward teams who place higher, have more fans, and bring in the most
viewers. The NBA teams also contribute a chunk of their
revenue to a shared pool. There’s no third party like Riot, so the
30 teams split around 50% of shared league revenue evenly across themselves. NA LCS players will have a minimum salary
of $75k, and players as a whole must receive 35% of the league revenue. So when all the combined player salaries make
up less than 35% of total league revenue, they’ll receive the difference directly. If they make more than 35% of LCS revenue,
they get to keep the extra. Instead of minimum salaries, the NBA has salary
caps that keep teams from paying huge prices on players, more evenly distributing talent
and salaries. Each team has a cap for how much they can
be spending on all of their players combined, and each player’s individual salary is capped
based on their years of experience. Similar to the LCS, though, combined player
salaries also have to meet a certain percentage of league revenues. In this case, the players get around 50%,
and if they don’t, team owners have to pay up the difference. So who’s in charge of all this? Riot makes final decisions on LCS franchise
rules, game rules, and more, but is planning on tri-party negotiations between them, teams,
and players. Later this year, Riot is launching the Players
Association, a group of representatives, elected by players, that will serve as their voice
in league decisions. Over in basketball, the NBA Board of Governors
(made up of team owners and their representatives) make decisions on things like game rules,
tournament formats, and expansion. The NBA also has a Players Association, a
labor union that negotiates a Collective Bargaining Agreement with the team owners. This contract lasts for years, and it sets
the rules for salary caps, trade rules, and more. The NA LCS franchise is sure to evolve over
the years. Like other sports, it’s probably going to
see changes to the revenue sharing model, a system for adding teams, and stronger decision-making
power for the Players Association. And, of course, we’ll probably see lots
of money. Last season, the NBA teams made around $5.9
billion in revenue. As the LCS franchise takes off, streaming-service
BAMtech will be paying Riot $300 million for streaming rights over the next six years. That $50 million a year, along with bigger
sponsorships and other media deals, will be a big start to the League of Legends franchise
here in NA.

100 Comments

  • Cw_Vilsono

    This may seem unlikely, but I hope all teams right now can make it into franchising. I love all of their stories right now. Tsm desperately seeking for excellence despite being on top. Clg finding a new direction with it's hot new talent that ignites it's fire once more. C9 desire of being the best, being able to take down Tsm. while forging their own identity. P1, which live and die by their star junglers but always rise when they fall.

  • Romnys Gonzalez

    i hope they add a Salary cap so team can manage they players better and will stop the trend of SKT,KT Roster like teams

  • Cameron Robertson

    honestly, I don't like the way that America does their sports. promotion and relegation keeps leagues more entertaining and competitive, as even the bottom teams are still fighting for something, which can cause great upsets and be really entertaining for the fans

  • Michael Campbell

    As usual, this video is very clear and informative. some eSports leagues could learn from this example..

  • Drew Shattuck

    Do we know what's happening with the NACS if the franchising makes switching out the NALCS teams far more difficult?

  • xHibachi24x

    Great video as always!

    I was curious if any of your team has watched the Bill Simmons video here on YouTube called "What If Chris Paul Was Actually Traded To The Lakers."

    Both this and that video share similarities in that they're well informed and provide a clean aesthetic.

  • Bluey

    + money for fans?

    TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM TSM

  • Mano csak

    wait..wait..wait..wait..wait..wait..wait..wait..wait…… SO from now if there is a new team with new talents, who would beat from scratch all the big teams ex.: TSM C9 P1 IMT etc etc. still couldn't make it to the NA LCS without paying in? even if they are better every aspect of the game?

    So even if they will play terrible they will remain in the LCS because of the franchise?
    Riot wants to destroy the sport?!

  • Ignacio Eric

    i dont usually post comment on yt but this video is awesome, i was sceptical of this channel at first but lately ive been seeing lots and lots of quality contents, keep it up!

  • Jared Estrada

    First video I've seen by this guy. Does a phenomenal job with these cant wait to see more videos from him!

  • Mo Su

    Im always ready to learn something new when i click your vids. im dead serious i would rather see a new vid from you than a new vlog notification

  • Mangosah

    I do ink that the franchising as a whole is a good thing, but I'm alittle worried about the start of it all. Also if the casters arent a part of that revenue circle thats kinda shitty

  • SmartBored

    These types of videos I wish existed for school topics like physics math chemistry etc because the extreme concise and plainly stated manner of these videos is amazing. I'm also glad pro players will get paid the salary they deserve given the amount of time they spend "working"

  • Hugs and kisses -

    Love the video. I'm curious as to how people make these kind of graphic videos, do you just make the assets yourself and do some fancy editing?

  • pierre bourillot

    Woaw, you guys are doing such a good job to help people understanding the industry of esport, I love you !

  • I Love LoL

    i think ist a big problem though, that in esports a Company owns the sport, but in traditional sport noone owns a type of sport

  • Cranberry

    While I liked the video, I wish you guys showed us more NA LCS teams other than IMT/CLG/TSM/C9/TL, as it makes it seem as you think only those teams deserve to stay after franchising comes.

  • Maurice Flores

    I hate how they're franchising. I prefer the Dota and CS:GO scenes where everything is dynamic and isn't region locked.

  • Isadore Karlin

    As an NBA fan as well as LCS, this made perfect sense. Added points because of the NBAs connection and investment to league

  • RayisOkay

    So if Bam Tech is paying for Riot's streaming rights for the next six years, does that mean the LCS will be held on their streaming service instead of Twitch? And what does that mean for streamers on Twitch who stream LoL, will they have to move to Bam Tech?

  • starlord

    major cities should have teams representing them like in the nba nfl nhl and etc and different confrences like the east and west feel like it would give another aspect of cheering to the tournaments

  • Фаик Тагиев

    Blitz, this was explanation, but what are your thoughts on franchising?
    My opinion that it is good for buisness part, but bad for gameplay part.

  • aR0ttenBANANA96

    Ah American "sports" franchising is the biggest abomination to the world of sports in general and seeing the supposed e-sports retards taking the bait and sucking off riot when they're only doing this to get every penny they can from all of you.

  • Woodshadow

    I'm still amazed that the League is still going. In this era for a game to be popular more than a year or two is amazing

  • Craig Brown

    Get ready for an NA LCS team/s equivalent to the 76ers soon, no more stories like C9 coming through challenger series (which will be completely useless now) no draft system like the NBA and such which means it will be the same 10 teams and very rarely a change in personnel since none of the teams have to worry about being bad remember team coast? Now imagine if they were able to stay in the league forever no matter how bad they were. NA will be worse internationally in the future due to lack of competition (just look at USA national team in Soccer because that's the only sport they play that they didn't invent and have the only high level leagues in the world). This will also make it so that the same 2/3 teams win every year because if a team gets any good players the bigger teams will just throw money at them.

  • Umbrella Ellaellaeh

    Thank you for this informative video! Was wondering the type of cap that NA LCS is hoping to use? A hard cap like the NFL or a soft cap like the NBA with a luxury tax? If additional revenue is funneled into team performance incentives, it should provide for some more intrigue in player negotiations! Also you may have to account for the handling of traded players and the making up of the difference in compensation between tiers, with no draft picks to offer like the Big 4 do, and the issue of franchises poaching up and comers on the challenger circuit who are not currently at the age threshold. This of course may happen by locking them into predatory preliminary deals that have exclusivity clauses and the like while not paying them the league minimum. Hopefully won't occur, but unfortunately not unlikely. Also, with probably more international players incoming, the league needs to have a standardized relocation clause in the CBA as some of these guys probably won't know what to do with themselves once in NA. Lastly, the revenue sharing is a great thing via broadcasting, merch sales, etc., but what other sources of income can the franchises obtain to offset costs provided the league undershoots annual revenue projections? NBA teams each have their own facilities and thus ticketing revenue, something I doubt each LCS franchise will have. Yes, yes I know a lot of financial planning goes into these things, but I'm just curious!

  • Jonathan Ngo

    As a fan of both the LCS and NBA. I kept trying so hard to convince them that esports is just as legitimate as major sports. Hand eye coordination, communication to make plays, practice / scrims, watching tape these are all the things professional athletes do in general and just because the medium is different people couldn't accept it at first. Sure I can shoot hoops on my own, but isn't it more exciting to watch the best of the best compete? So when people ask "why don't you just play video games yourself?" I answer with that exact statement to help them understand it. I'm happy esports is getting the recognition and attention it deserves. This is going to make it so much more legit. And this video does an excellent job explaining the system for people who aren't familiar with either sport. Because honestly if ESPN shows scrabble, cup stacking, poker, and the damn spelling bee then surely a MOBA deserves air time! Just because it doesn't involve a ball going in a hole doesn't mean countless hours aren't spent mastering their craft. I don't understand certain sports but I damn well respect the fact they worked and mastered their craft to be the best in that sport / activity.

  • Jchamp Jchamp

    I understand that they wanted to make the lcs more profitable, but I hate the idea of franchising. There needs to be some sort of relegation/promotion system to both keep the standard of play from stopping as well as showcase new and unearthed talent.

  • Yatsura2

    I dont understand how north americans be in favour of such controlled system far outside of any free market and still shout "COMMUNISM!!!" whenever someone tries to establish anything even close to their beloved franchise system…
    I dont say its good or bad, just that USA guys really are hypocritical as fck…

  • MiloufromSaigon

    This video is very informative, most underrated League channel! Plus, this video is helpful for me on school assignment, thank you! Keep it up Blitz 👍👍

  • Maximiliano Zuñixtli

    If these guys make a minimum of 75,000 why does it seem they have shitty pay from the places they stream?

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