MLBAM’s BAMTech subsidiary has signed a deal worth at least $300M with Riot Games for streaming, sales and tech development rights to League of Legends, a groundbreaking arrangement that will remake the economics of one of the world’s most popular e-sports properties. The deal, set to last through '23, makes BAMTech the exclusive sponsorship and advertising sales agent of Riot. BAM has guaranteed $50M annually on average to Riot, and a revenue share beyond that. BAMTech also has won the right to include League of Legends content in a multi-sport streaming package now in development. The centerpiece of the partnership is the eventual development of a proprietary mobile app for League of Legends viewing, akin to MLB At-Bat, which the companies hope to launch in late '17, Riot Games co-Head of Esports Jarred Kennedy said. Riot will continue to rely on third party streamers such as Twitch and YouTube, and execs do not intend to make the BAM-created app the exclusive home of League Of Legends. However, BAMTech will provide the feed and collaborate with Riot on distribution strategy. “We also believe in making sure out content is available in places fans want to see it,” Kennedy said. "So this deal contemplates working with BAM to distribute content where it makes sense.” Kennedy said the new app will have to meet very high fan expectations to compete with Twitch and other streamers for eyeballs. It is not planned to be a subscription product. “Anything we do that joins the conversation around distribution needs to be great, or it won’t be relevant,” Kennedy said.
KEY STEP FOR RIOT: The deal represents a key step for Riot along the way in its urgent push to monetize League of Legends more effectively. More than 100 million people play the game worldwide, and more than 43 million watched the world championships online in October. But teams, players and analysts all complain that revenues have not kept pace with that audience growth. Kennedy said they expect BAM to substantially increase revenue from integrated sponsorships on its streaming coverage on all platforms. For BAMTech, spun off last year as a subsidiary of MLBAM, this positions the outfit for the first time in the growing world of e-sports and gives it exclusive rights to one of its biggest entities. The Riot deal for BAMTech bears some similarity to its large-scale digital rights deal with the NHL in which gains a large package of content rights, will distribute them and sell sponsorships against them, and also will develop and rebuild a full suite of digital products for League of Legends. However, Riot is not gaining an equity stake in BAMTech in addition to the guaranteed rights fee and revenue sharing, unlike the NHL.THE DAILY first reported the talks in November. Alan Gold at Evolution Media Capital advised Riot on the deal.
