This morning, Riot Games announced that they would be implementing a “permanent partnership” system for the NA LCS starting with the 2018 season.

You can read up on the full changes, but in short, the system will effectively create (mostly) permanent placements within the league, with revenue sharing between teams, Riot Games, and players. The system will also allow for funding to create a Player’s Association to further protect those who take their skills to the Rift.

In order to get the full details of exactly how permanent partnership will work, Yahoo Esports’ Travis Gafford sat down with co-head of esports at Riot Games Whalen Rozelle and co-head of esports and head of merchandising Jarred Kennedy, as well as Team SoloMid owner Andy “Reginald” Dinh and Immortals owner Noah Whinston to discuss the future of franchising.

Getting things started

Selecting teams to take permanent places within the NA LCS will be a difficult process. As such, Riot Games has set up a selection process that it has deemed both fair to everyone and gives the highest chance of success for the League as a whole.

To start, there’s going to be a buy-in.

“We’re not looking to do a bidding process,” said Kennedy. “We’re looking to establish a flat fee. That flat fee will be $10 million. The reason that we’re doing this in this way is we’re not optimizing for the highest dollar. We’re not looking for mercenaries who can pay the highest price and therefore have the highest ability to extract dollars from our fans or our scene and get a return on that investment. What we want to do is use this process to find the right set of partners who are going to build this league with us.”

That $10 million will be used not just as part of the vetting process, but a way to fund several services that the new league will provide, including the Player’s Association (which will be discussed later).

Rozelle is aware that the price point may seem high at first glance.

“We’re actually going to structure the payment so it’s even a bit easier to get in,” he said. It’ll be half up front, and the rest will be deferred. The goal is not to create a barrier that is so high that a team that should be in the league can’t get into [it],” he said.

With the revenue sharing breaking down to “roughly” (according to Rozelle) one third of league’s revenue going to Riot, teams, and players respectively, Rozelle knows that there will be be people looking at the NA LCS as a money-making opportunity. However, he believes that the best way forward is focus on creating the best LCS possible, rather than aim to make a quick buck.

“We put more weight on the ability to field a great team, take care of the pros, build long-lasting connections. At the end of the day, having a great fanbase and putting out a product on the Rift that fans love to see and connecting those fans with stars, that’s the core of what a sports league is all about. We certainly value the idea of potentially someone who could…dramatically grow the pie, because we think that’ll be good for everyone. If we had to choose one or the other, I think we’d weigh towards, ‘How can the NA LCS be as competitive as possible,’ because that’s the goal here.”

View photos Immortals owner Noah Whinston is ready for permanent partnership with Riot Games and the NA LCS (Jeremy Wacker) More

Making an investment

Entering into a long-term partnership is always a risk, something that Whinston and Dinh are fully aware of. But with the promise of a return on their money on the horizon, the pair are optimistic about the future.

“A lot of people will sometimes misinterpret this kind of franchise fee as a price of a ticket to get in the door,” Whinston said. “From my perspective, I interpret it as a cost to build a factory. This is a capital cost. You’re investing in something that will then return value to you, not just qualitative value, but quantitative value. You’re going to get paid for being a part of the league. It makes sense to pay money up front in order to access that.”

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