Established in 2014, the Riot Games League Challenger Series was meant to be the proving ground for amateur players who were skilled enough to compete at the highest level in League of Legends, the League Championship Series (LCS). While for the past two years the series has shined light on up-and-coming talent, recently the series has developed a more financially opportunistic character. For some, the Challenger Series has become about the profit potential of selling a team that qualifies for the LCS.
This split, two teams, Cloud9 and Team Liquid, have created secondary Challenger teams compiled out of former LCS talent. These teams have been playing in the NA Promotion Tournament this week to try to qualify for the LCS. Per game developer Riot Games' rules, however, organizations like Cloud9 and Team Liquid may only have one team in the LCS, so if either team qualifies, their respective owners must sell the teams. Other organizations or investors eyeing an LCS slot would pay dearly to buy qualified teams, with previous spots going for up to roughly $1.4 million.
As mentioned, the Challenger Series was created to provide professional competition opportunities to fresh, unknown teams and players. In the case of previously qualified teams, such as LMQ, Dignitas EU (now Splyce), and the Unicorns of Love, the Challenger Series has seen some of the region's best amateur talent develop and earn their shot at the top.
However, teams such as Cloud9 Challenger and Team Liquid Academy are different from these earlier teams. Each has experienced former LCS players at its core instead of untested amateurs. Because many of these players have already broken through to the LCS, this tactic defeats the purpose of the Challenger Series and keeps qualification out of reach for all but those backed by a well-established and well-funded organization. By gaming the system in this way, professional teams are able to dominate the competition and essentially generate millions of dollars with very little effort once the LCS slot is locked in.
If this was not the original role of the Challenger Series, how did we get to this point?
The first step is to look at secondary teams. In the beginning, back in 2013-14, secondary teams were genuinely created by established organizations to house up-and-coming talent. Curse Gaming, which merged with Team Liquid in 2015, shepherded the likes of Eugene "Pobelter" Park and Johnny "Altec" Ru to the bright lights of LCS. Other teams took note of Curse's idea, such as Cloud9, and began to build amateur teams of their own.
Then in late 2014, Curse was forced to sell its secondary team Curse Academy after the squad qualified for LCS, thanks to Riot's ruleset. While the number for this sale has never been publicly released, it's estimated that the team went for roughly $450,000, according to sources. But that was just the beginning of a steep increase in prices for LCS spots.
Upon realizing that half a million dollars or more was on the line, four of the North American LCS teams, Team Liquid, Team SoloMid, Counter Logic Gaming, and Cloud9, invested in Challenger squads the next split in January 2015. In Europe, Team Dignitas did the same after signing former SK Gaming Prime and its roster.
But although many established teams now fielded Challenger teams, the players were still amateurs. That changed in spring, when European team Origen, assembled and operated by legendary Spanish mid laner Enrique "xPeke" Cedeño Martínez, built a roster with four former LCS players. Origen dominated the Challenger Series and earned first place, and auto-qualification to the LCS as a result.
Meanwhile, the LCS team sale price kept growing. At the end of the summer season in 2015, sources say that Team Coast to NRG went for $1.4 million, Team 8 to Immortals for $880,000, and Gravity to Echo Fox and Rick Fox for $1 million, as reported by the Daily Dot.
This dramatic increase in return has transformed the scene. With each team being sold for close to $1 million, interest in forming and housing a secondary squad for large returns has boomed, and new strategies for building teams have blossomed along with it. In May of 2016, Team Liquid Academy made a complete roster overhaul, adding multiple former LCS players and swapping out its AD carry for 2013 World Champion Chae "Piglet" Gwang-jin from its LCS squad. Cloud9 Challenger replicated Origen's method, building a team of four of its most decorated players and a former LCS AD carry, plus other LCS players.
In the Challenger Series over the past few months, Cloud9 Challenger and Team Liquid Academy have excelled and are now facing this LCS season's relegation teams: Echo Fox, NRG Esports, and Phoenix1. Although in theory the LCS teams are competing against highly skilled amateurs, in reality their opponents are already LCS-caliber. The guise of rookie vs. pro competition is only skin-deep.
But why would a buyer pay millions for an LCS team? The draw is the advertising value of brand exposure in the world's most watched esports league. As esports in general and League of Legends in particular skyrockets in popularity, that value has started to distort the incentives for owning and operating teams. As a result, what was once an accessible and exciting framework for bringing new blood into a professional ecosystem is turning stagnant and exclusive. The beneficiaries are deep-pocketed investors and esports brands that are already wealthy, well known and well connected, not the league itself, new players, Riot or arguably the audience.
But despite the obvious manipulation of their system, Riot Games has no stance on this strategy for building and selling qualifying Challenger teams. As Riot is the sole authority for league rules and regulations, nothing can change until the company takes a stand.
There are potential solutions. The easiest fix is implementing franchising in the LCS, something that Riot has reportedly considered in the past, as reported by Breitbart. This would cement teams into the LCS system, preventing any new Challenger teams from moving up into the LCS.
Under the franchising system, the Challenger Series would become something similar to minor league baseball. LCS teams could build secondary teams to harness up-and-coming talent, in the hopes that the new recruits develop enough to be worthy of their sister teams. This is something Cloud9 originally stated it would do, but ultimately opted to use LCS-level talent instead.
This proposed fix would come with both benefits and drawbacks. The upside would be that the LCS would be limited to owners and organizations who have a good history, or the financial backing, to properly treat and pay their players, which is something that has been an issue within the LCS in the past.
The downside, however, is that the system would limit new investment in the Challenger Series. While most wealthy entrepreneurs have bought LCS spots wholesale, such as the Sacramento Kings' Andy Miller and Mark Mastrov and FC Schalke 04, others have gone to the Challenger Series to build teams from scratch and prove that they're making the right investment.
Another solution would be to bar established LCS teams from creating Challenger squads. This would give new parties the ability to dip their toes in the League of Legends scene, but these new organizations would be unknown quantities. They could lack the financial stability and management experience to properly handle teams -- something that's becoming less common in the Challenger Series, but still occurs -- and the ecosystem could be adversely affected, particularly the players.