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SBD/November 17, 2016/Media
Riot Games, BAM Tech Near Groundbreaking Deal To Stream League Of Legends
Published November 17, 2016
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TRYING TO GENERATE REVENUE: Much of the recent talks between MLBAM and Riot have been focused on refining the ad model within the League of Legends content in order to generate sufficient revenue. Video gaming programming generates some of the largest audiences of any digital content, regardless of genre. However, revenue development has been comparatively slow as Riot and most e-sports publishers typically eschew exclusive media deals, prioritizing maximum reach. To that end, League of Legends content is currently available on Twitch, YouTube, and other streaming sites. It is not known whether the new alignment is fully exclusive, though one source said current streaming partners have been assured they will still have the games in '17. Turner Sports Contributing Editor Richard Lewis yesterday reported a leaked document outlining the framework of the Riot-BAM Tech partnership, which included a standalone video application for the Riot Games website and references to subscription billing. The authenticity of that document has not been independently confirmed. The deal will be watched closely by traditional sports owners and other investors as they look to acquire stakes in e-sports teams, analysts said. Future media revenue has been a difficult X-factor to account for in those negotiations. “This deal is really a watershed moment, not just for LOL e-sports, but for e-sports in general,” said Catalyst Sports & Media Exec VP Bryce Blum, a longtime e-sports attorney.
UNDER PRESSURE FROM TEAMS: The deal also arrives as Riot faces increasing pressure to expand moneymaking opportunities to its individual teams, who currently depend on merchandise, tournament prizes and their own sponsorships to survive. Riot execs in September wrote a letter to fans stating, "Media/sponsorships are a vital part of LoL esports’ economic future. We've been working for over a year to restructure and expand our approach to media distribution and ad/sponsorship sales.” Franchises will demand to know how they will benefit from the BAM Tech deal, Blum said. “It’s probably taken for granted by the traditional sports audience that revenue sharing is a fundamental part of league economics, but it’s not in most e-sports,” Blum said. “Just because this media deal comes through, there isn’t a structure in place to guarantee that the teams and players are meaningful participants in the upside of a deal they’re undoubtedly instrumental in creating.”