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Crowdfunding prizes is not the catch-all fix for LoL esports’ revenue problems

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It’s time to let our teams become truly independent

Riot Games

We're two weeks into World Championship, and the original $2,000,000 prize pool has more than doubled from Championship Zed sales. The voices of a million skeptics cried out in terror, and were at once silenced. It's unarguable; fans will directly support their teams financially if they get something in return. Especially when the method is 'doing something they were going to do anyway'.

Let's stop talking about crowdfunding. It's the wrong concept for what League of Legends needs in 2016.

Teams are businesses. Revenue comes in, games are played, players are paid. The revenue streams are pretty standard across nearly every team:

- Riot payments

- Sponsorship

- Twitch subscriptions / donations / ad revenue

- Merchandise sales

Twitch subscriptions go directly to the players, so although they technically don't count as a revenue stream for the org, it relieves the financial responsibility on the organizations for ensuring their players can afford to eat.

Fans contribute directly to two of these four sources, with Twitch ongoing and merchandise sporadic and low-margin. We know that Riot payments to players and the amount paid to orgs is pittance in the scheme of things; the logic behind low team and player payments is that it encourages teams to not be dependent on handouts, but we've just created a world where that dependency is transferred to the sponsors.

Different payer, same problem.

Handout dependence is dangerous. Outside forces such as natural disasters (eg Thailand floods destroying hard drive factories in 2011) can cripple an entire segment of industry, and it seems tenuous to form contracts that could feasibly depend on the weather half way around the world. The decision to drop a sponsorship agreement sits in too few hands to be considered risk-free, and in a world where a team’s dependence on a particular sponsor, conflict of interest & the possibility of corruption are things that need to be discussed.

Fans subscribe happily to the players on Twitch, but the vast majority of the fanbase for LCS teams is the silent majority. For those unfamiliar with the concept, 95% of people who enjoy any particular thing will never interact with anyone online about it. They will never post on reddit, they will never chat in a stream on Twitch. They play the game and watch the matches, but they don't step outside of that. These people make up the vast bulk of the LCS viewer base. The only connection we have to this silent majority is in the game client.

In 2016, to compete with Korea, China and Taiwan, LCS orgs need better revenue streams. We know that fans will pay money to support their teams on Twitch for little more than a subscriber icon and some emotes. The next step in the monetization of LCS teams is clear.

We need a way to subscribe to teams in-game.

An in-client subscription model similar to Twitch, unlocking unique Summoner Icons, Borders, Mastery emotes and Recalls, would have so many instant subscribers, I'm fairly sure it would overload the payment system's back end. It would even be possible to add some crossover to the forums since they share the same authentication system. Imagine if the orgs content creation team could sell more than just a team icon? If I could subscribe to Albus NoX Luna, I'd be logging into the client to faster than you can say "Shut Up And Take My Money".

Fans spent over two million dollars buying Championship Zed this past month.

You can bet they'd spend $2.50 a month to get a damn TSM recall.