H2K threatens to leave the EU LCS
H2K has released a major bombshell to both the community and Riot games this week, insisting that if Riot does not “provide financial stability”, they will be withdrawing from the EU LCS and competitive League of Legends as a whole.
H2K, with the support of Richard Lippe, Board Co Chairman of H2K and Susan Tully, CEO of H2K, has explicitly said they will be “no longer (be) financially” subsidizing Riot for the competitive esports scene.
The organisation claims that a wide variety of teams are incurring costs on behalf of Riot, which from a business point of view, is currently unsustainable.
The post further states that their partnership with Riot results in “annual losses of over €1,000,000” while Riot gains “very substantial annual profits”.
It also claims that “most League of Legends teams lose money” as Riot’s subsidies for competitive teams only cover a “small fraction” of their rising operational costs.
What should Riot do?
If the allegation that most League of Legends teams lose money is true, then it’s a huge problem. Riot’s EU branch must take serious action and initiate discussions with all the teams currently in the EU LCS.
While esports is a risky investment and the returns can be extremely volatile, where results can truly may make or break a team, the potential that consistent losses are being felt by all teams across the board is worrying.
Riot need to increase revenue streams for competing teams, as for example not all teams make it to Worlds and receive financial support from merchandise sales.
To do this, Riot could increase team subsidies and relax their strict sponsor policies, which require organisations to report and seek approval from Riot on their business partnerships. They could also introduce higher prize pools with a fairly decent minimum reward as a safety net for teams who tilt on a particular season.
So, will H2K leave?
It is extremely likely this isn’t an empty threat, as an organisation wouldn’t release such a strong letter, risking their relationship with Riot if they weren’t desperate.
H2k should hold out at least until the beginning of the upcoming pre-season. H2k also has a fairly large fan base, it is likely with their influence, it would force Riot to move and change the EU scene for the better.
Whatever happens, stay up to date with the latest news at esports.net!