Riot Games has given the Golden State Warriors, Cloud9 and Team Liquid one year from now to resolve conflicts of interest between ownership of the three teams, according to a Wednesday report from SportsBusiness Journal and confirmed by ESPN.
The Warriors' GSW Esports LLC, a subsidiary of the greater GSW Sports Ventures LLC, was granted a spot in the North American League of Legends Championship Series in October. That corporation has several owners who also own stakes in Team Liquid and Cloud9, which were also accepted into the league, violating Riot's multi-team ownership rules.
"No team owner or team manager or affiliate of an owner may own or control, directly or indirectly, or have a direct (e.g., ownership) or indirect (e.g., a contractual arrangement) financial interest, or be an employee or contractor of, more than one League of Legends team in a professional esports league," the North American LCS rulebook states. "Any buyback provision, right of first purchase, or similar interest in a team shall be treated as a controlling interest in such team for the purposes of enforcing ownership restrictions."
Among those with conflicts are Warriors co-managing partner Peter Guber and assistant GM Kirk Lacob -- who are both a part of Liquid's parent company, aXiomatic -- and Warriors and Cloud9 minority owner Chamath Palihapitiya.
Riot has discussed the conflict with the Warriors ownership -- including Lacob and his father, Warriors majority owner Joe Lacob -- over the past month since the team was accepted on potential resolutions, sources said. At one point, it was suggested that the Lacobs register a third-party business to own the slot; however, that would limit the new team from using in-house Warriors resources such as sales and marketing teams.
Kirk Lacob told ESPN on Tuesday that he invested in aXiomatic to experience esports for the first time, but will dissolve his stake in the coming months.
"Peter approached me and said, 'Look, I'm investing in Team Liquid with this new thing aXiomatic and I'd love to have you join.' I said sure and I saw that as an opportunity to get a foot in the door," Lacob told ESPN. "I will obviously be removing myself from aXiomatic and Team Liquid. I'm obviously not an important piece of what they're doing, but I still need to remove myself to make sure things are on the up-and-up."