Riot Games has announced a long-term partnership with BAMTech, a subsidiary of MLB Advanced Media, for the monetization and commercialization of League of Legends esports. The two companies will be working together to “push the boundaries of the esports viewing experience” in League of Legends.
The deal carries a $50 million per year guarantee for Riot Games on average, and will run through to the 2023 season.
MLB Advanced Media (MLBAM) is a partnership of 30 Major League Baseball club owners that largely functions as the online and interactive branch of the league, operating the official MLB website and thirty MLB club sites. BAMTech is a subsidiary of MLBAM and is a streaming technology provider, with a portfolio of clients that includes Disney, the NHL, WWE, HBO, and the PGA Tour.
In an exclusive interview with Yahoo Esports, Riot Games co-head of esports Whalen Rozelle, co-head of esports and head of merchandising Jarred Kennedy, and BAMTech president of business and media Bob Bowman revealed more details about the deal.
How it will impact Twitch, YouTube, television, and other live platforms
Riot Games confirmed that the deal will not be changing how the audience can watch League of Legends content in 2017.
“We first and foremost believe in making sure that the content is in places where the fans want to watch it, so that will continue to be the case… We believe in making content freely available, and it will continue to be freely available into the future. We have no plans to change that,” Kennedy said.
While Riot Games plans to keep HD streams and ensure that the “core esports experience remains as accessible as possible and free without paywall,” there is also the possibility that a premium experience will be offered later on.
“That’s not to say that we won’t innovate down the road. Maybe there is something super cool that we create that has to be behind a premium experience so that fans want to buy into it,” Rozelle added.
Highlight reels and similar content posted by fans to channels such as YouTube will remain unaffected and can continue to be produced.
$50 million per year is the minimum
The monetary value assigned to the deal may seem hefty, but BAMTech has expressed the intention of making more than the $50 million stipulated annually on average.
“I hope we’re going to do a lot more than that. That’s the minimum guarantee, and I hope we’re going to exceed that by a large margin. And I expect that we will,” Bowman said in the interview.
BAMTech’s reasoning behind this assigned value to the deal lies in the nature of League of Legends as a “digital-first” property. By comparison, traditional sports have been television-first before eventually going to digital.
“The amount of time that [Riot Games] has over the top for live events far eclipses any other sport in the world — not just esport, any other sport in the world,” Bowman said.
“So the monetization for that effort and those kind of events is going to be really exciting. But we think the world is ready for esports. The sponsors, the advertisers are ready for it. They’re dying for it. It’s a great audience and they spend a great deal of time with this content.”
Which regions this will affect
Riot Games has not revealed exact details on what it plans for each region yet.
“We want to do the best thing for every region, for every league, as it makes sense,” Rozelle said. “We’ve sort of built in the flexibility to do what’s right… Our intent is that we go out there and we roll this out all over the world,”
“We’re going to be focused on rolling out the regions in a pragmatic way. The goal is for this to be essentially a global deal. But we didn’t want to say that we can turn it on overnight, because we need to be cognizant of what fans want in the region, each market has their own particular dynamic… and we want to figure out the right way to work within those ecosystems,” Kennedy said.
The monetization of distribution of content across different regions will be something that Riot Games will be coordinating with BAMTech as time goes on.
App and client integration
BAMTech has made it clear that the deal would eventually include the integration of an app.
“We wouldn’t be here if there [wasn’t] an app involved… we’re going to build a world-class app for a world-class game” Bowman said. It will be launched region by region, and development will be shaped by the input of fans, teams, and executives.
On the client side, Riot Games hopes to roll out some form of integration but didn’t disclose details.
“We absolutely want to achieve that,” Rozelle said. “There’s a bunch of technical stuff that needs to be unlocked in order to do so, but that’s just one fork down the road that we think could be really compelling and could create a lot of value that enhances the experience.”
Riot Games expects to share revenue with teams and players in the future
According to Riot Games, player and team streams are not expected to be added to the deal. Kennedy also touched upon driving consumption of League of Legends competition, however the focus of the streaming platform will be on professional League of Legends content.
“There’s more revenue coming into the scene. And that revenue will find its way to players in the form of salaries and to teams in the form of a share of that revenue directly once we get into that next phase of our growth, which is what we talked about last time we were here, that 2018 and beyond partnership,” Kennedy said.
When we will start seeing effects of the deal
The partnership will not affect broadcasts for the upcoming season, Riot Games confirmed, although the company didn’t reveal any additional details regarding a rollout date.
“We don’t anticipate the economic value of this deal to start hitting materially until 2018. We’ve got no product to announce, we’re just way out in front of this because of the fact that we wanted to come out and get in front of some of the misinformation that was out there,” Kennedy explained.
“We’ve got a roll-out schedule that’s very hectic and it is staged in different regions,” Bowman said.
Reports of a partnership between Riot Games and MLB Advanced Media’s BAMTech had surfaced last month, although initial reports marked the deal at $90 million. Riot Games has made several big announcements as of late, including changes to the EU LCS format for the 2017 season and launching League of Legends patch version 6.24.