The Growth of League of Legends, And the Need for Collective Bargaining
eSports has become more prominent over the past decade. In 2015, the global revenues for all eSports games combined reached $325 million, with North America accounting for a third of that total. The trend shows that such revenue will reach $1 billion by 2019. In terms of viewership, statistics show a global audience of 226 million viewers in 2015, trending towards 450 million viewers by 2019. In mainstream media, eSports has also grown in popularity and has drawn the attention of large corporations. In 2016, two large media outlets launched platforms specifically dedicated to eSports—ESPN launched a specific eSports vertical and Yahoo! launched Yahoo eSports for professional eSports coverage. Based on participation and business trends, eSports is transforming into the next big sports league that may rival the size of traditional leagues.
eSports consist of organized video game competitions. Such games include Starcraft, World of Warcraft, and Counterstrike. One of the fastest growing games is League of Legends (LoL). In LoL, two teams of five are each placed on either ends of a map at their home base. The players for each team each have a distinct position on the team, and each player get to select specific playable characters with unique skillsets. The objective of the game is for one team to capture the other team’s base. This is a perfect setup for team-based tournaments.
Professional Lol is very similar to professional traditional sports. The game and the professional leagues are owned by the game’s creator, Riot Games. The main professional league in North America is the League Championship Series. Like other sports, each season in the league consists of a regular season and a playoff. The top finishers of the playoffs in the North American League move on to the World Championship, where they meet in a tournament with winners of other regional leagues. The League Championship Series contains a concept of promotion/relegation similar to that of the soccer world’s Premier League, where the worst team in the league gets demoted to a lower-tier league. Each team has an owner and consists of a coach and five to six players, with five playing at a time.
LoL has already surpassed the viewership total of the NBA and the MLB combined. The viewership of the 2015 World Championships’ final match garnered five million more viewers than those of Game 7 of the 2015 NBA Finals. Though the total revenue has not reached the level of traditional sports, the popularity level has made it worth considering LoL as a major sport.
In terms of revenue, Riot Games dominates the intake when compared to the teams and the players. In 2016, the company made $1.6 billion in revenue. Most of this money comes from in-game purchases of character and skins of the characters, sponsorships, and live audience for the tournaments. The teams themselves make most of their money from sponsorships, merchandise sales, and tournament winnings. The latter makes up the majority of the revenue; winning the World Championships can net a team over $2 million. However, compared to the league itself, the earnings by the teams are miniscule. The most successful team only made around $3 million in 2015. A player’s revenue is based on a contract signed with their team. Per the official 2016 Rulebook of the league, the only section involving player compensation is §2.2, which provides a minimum compensation of $12,500 for each starting player—an amount that could be reduced pro rata for each game the player does not start over the season. Any further compensation is decided by each individual team.
The main problem for LoL financially is that although the league has been growing dramatically over the past few years, the revenue has mostly gone to Riot Games. Fortunately, there are changes underway for more revenue sharing with the teams. However, it is at the player level in which the most changes are needed.
As mentioned before, the only rule involving compensation for players provides them a minimum of $12,500. The section does not even guarantee that minimum, as the players can get cut and be paid their pro rata share. In looking through the rest of the rulebook, all remaining rules appear to be negotiated between the owners and Riot. The only other section that involve players’ rights, §4, involve trades and free agency. The section mentions what teams can do with the players and the procedures in acquiring players, with no mention of any considerations of the players themselves. Thus, unlike in the major sports where a player’s union is involved in negotiations over the agreements of the leagues, the players in LoL have no large say over the rulebook.
LoL players have similar issues as athletes when they enter professional contracts. Players tend to sign their first contract as teenagers; this would often be their first job and thus, they would not have much experience in considering different aspects of the contract. They generally do not consider the market value of their skills nor the market of the league. Furthermore, as glorious as it may seem to be able to play video games for a level, when the work is broken down with respect to the number of hours required to stay competitive, the amount the players make per hour diminish. Players tend to practice more than 50 hours per week. For those at the lower end, their pay per hour ends up less than minimum wage. Other than money, their rights in terms of mobility and job security are also matters that need to be considered.
To resolve this discrepancy between the game’s increasing revenue and the relatively paltry amount of players’ earnings, collective bargaining for players is needed to negotiate fairer contracts. The purpose of collective bargaining is to have a united front through which all players can consider an overall plan of what the players all need. Negotiating all contracts in this manner would prevent the teams and Riot from negotiating with only the most vocal of the players and from avoiding a general standard that would be beneficial to all players. Establishing this framework now would also provide for improved negotiations in future talks. The key topics of negotiation would concern setting a higher minimum compensation based on the revenue the league is making, guarantees on contract so that the players have some job security, and more standardized control concerning mobility of players.
There are arguments against this. In entering the games, the players did choose to enter the profession and did have the opportunity to decide on what they agree to. The market itself could dictate an improvement in contracts; players know that the teams want to sign them, so they could create bidding wars between the teams to maximize their contracts. Lastly, there is nothing preventing players from making money via streaming games, which could provide them revenue via sponsorships and advertisements. However, players still would benefit greatly if, together, they could negotiate an improved minimum standard that would provide them a larger share of the success.
Jun Tong is a J.D. candidate, 2018, at NYU School of Law.
