Riot Expands League of Legends Esports Revenue Sharing

Key insights

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New model

Riot Games is implementing a new revenue-sharing model for League of Legends esports.

The new model targets Tier 1 teams in the LCS, LEC, and LCK. Discussions are underway to adapt this model for the LPL.

Content expansion

Riot Games plans to increase the volume and variety of digital esports content.

This includes releasing more digital esports content throughout the season. New digital products are also intended for introduction later in 2024.

Future plans. Riot plans to increase the volume of digital esports content released throughout the season and intends to introduce new, currently undisclosed digital products later in 2024.

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Summary

Riot Games has announced a significant restructuring of its business model for professional League of Legends esports, aimed at enhancing long-term financial sustainability for teams. The initiative introduces a new revenue-sharing framework for Tier 1 organizations across the LCS, LEC, and LCK, with ongoing discussions to adapt the model for the LPL. This shift is designed to provide teams with more predictable income streams while aligning financial incentives with the broader success of the ecosystem.

The core of this new model is the establishment of a Global Revenue Pool (GRP), which aggregates revenue from digital in-game content. This pool is distributed to teams through three distinct channels: 50% is allocated as general shares for Tier 1 teams, 35% is designated for competitive performance based on regional and international standings, and 15% is awarded as fandom shares to incentivize the development of team brands and player engagement. This structure represents a notable expansion from previous years, where revenue sharing was primarily limited to teams participating in international events.

Beyond the GRP, Riot Games plans to increase the frequency and variety of digital esports products available to fans. The company has also committed to sharing 50% of other direct revenues, such as sponsorships and media rights, once its annual investment costs for the ecosystem are recovered. By implementing these changes, Riot Games seeks to solidify the financial health of its professional leagues, ensuring that teams and players can maintain viable, enduring careers within the global competitive landscape.