The EU LCS is franchising in 2019, moving from a relegation system to a league of permanent partnerships. To get G2's perspective on the change, Blitz Esports sat down with G2 Founder/CEO Carlos "ocelote" Rodríguez Santiago to talk about EU salaries, what he's learned from NA, and how he plans to answer Riot's requirements for cultural appeal.
And if you want a quick tl;dr on EU franchising, check out our explainer + interview with Quickshot over here.
Renato, Blitz League Producer: Can you talk to me a bit about your strategy for meeting Riot's condition that teams prove they can appeal to local cultures? In your case, you're a Spanish brand, but you guys just moved your office to Berlin. Is there any specific market you're trying to focus on?
ocelote: We're fully on board with being appealing for the local audiences. However, look at the brands that have done the best to date in esports. The Big Five, which are—not in this order—Team Liquid, Cloud9, TSM, G2, and Fnatic. Those five brands are considered global.
We have fans in Asia. We have fans in all the Western world, South America, all the way from Spain to France to Poland to Canada. And so we, these teams that are truly global, may actually get hurt by putting too much focus into regional markets. In other words, we would do ourselves a disservice if we would close down to Spain, or to Germany, or to Europe for that matter. It would be a disservice to the millions of fans that follow us from different countries and regions.
So on one side, we are absolutely on board with increasing our presence locally, and I think every team should do the same. We, as a matter of fact, are spending resources on creating (in Berlin) the first ever high-performance and high-profile facility in Europe. And it's going to kick ass.
That's going to increase the level of engagement with the fans, however, that doesn't mean that's going to be the only one. We intend to do the same in Spain. We intend to do this in France. We intend to do the same in Los Angeles. We intend to be present across the world, because we recognize this global phenomenon, and it would be a shame not to take advantage of that.
We're also hearing that long term partnerships could reduce the exodus to other regions, NA mainly, due to the higher base salary. But most NA players currently make much more than base salary. Do you think the salaries in EU are going to be able to compete? And if not, is there something about the model that would convince talent to stay in Europe?
So when people think that Europe has smaller salaries than NA, they are correct if what they're doing is taking the average of each and putting it together. Then yes, NA has higher salaries than Europe.
But if you take the top teams, that may not be the case. Top teams in Europe pay very competitive salaries compared to North America. Otherwise, it would be incredibly tough to sign long-term contracts and deals that we have in place. Just as a reminder, G2 has a total of 16 years of contract duration with their players. That's bigger than any other western team, and that can't be done with very low budgets.
So we work our asses off to make sure that we have enough resources to keep the stars, and at the same time, we do our best efforts to make sure that the people that surround us in the league do the same. Because, to be honest, I prefer to play the EU LCS Grand Finals against someone like Rekkles, who has an incredible fanbase, than against a player that has no fanbase whatsoever, doesn't do anything on Twitter, and has no relevancy whatsoever. So for me, it's always better to play against the Rekkles, the Perkz, the Bjergsens, the Doublelifts of the world.
Seeing the NA LCS long-term partnership model over the last year, what do you think was successful enough to warrant EU doing the same?
A model in which teams are incentivized to have more fans, create better content, and win more often is a model that will by default increase the value of the league. This will increase the amount of sponsorship dollars and media dollars that are going to join the industry, which will increase the overall valuation of the industry and League of Legends as a whole.
A group like that is determined to succeed in all levels and areas: some teams will want to succeed more competitively, some teams will want to succeed more in terms of branding, and some teams will want to make sure that there's proper structure and proper sales within the group. I think that combination is crucial for the success of the league moving forward, considering that our number one goal is to make the EU LCS the ultimate entertainment experience.
Is there anything you've learned from watching things progress in NA's first permanent-partnership split?
What I learned from watching NA is that we can do so much better from day one, utilizing the know-how that NA now has about what a group of teams working cohesively like this can do. Europe is a much different market than North America for many different reasons—different languages, different cultures, fans like different stuff—but at the end of the day, everyone wants to be entertained, and entertainment is a global language.
So I think the very basics of this league are first, to make it, or to work to make it, the most entertaining league of all time in esports.
Secondly, we need to ensure that everyone that is part of that is incredibly committed to the league itself and to growing the game.
And lastly, we need to ensure that the fans understand what this all means for them, because there's a lot of misconceptions of what this could mean for the game, and for the fanbases, and for the industry as a whole. I think that all of these questions could be answered if addressed the right away.
What changes for G2 specifically with the introduction of long-term partnerships?
The existence of long-term partnerships between Riot and the teams doesn't change anything for us for the bad. The reason is because we were not winning because we feared going into relegation. We were not creating content because we feared going into relegation, or feared of being kicked. We weren't doing all of that, because we have a long term plan.
We don't want to just get rich and leave. We intend to be the largest organization in the world, the most loved, most hated but the organization that everybody would want to watch. So with that vision in mind, we do everything it takes to accomplish it, with or without a long-term partnership.
Now, with the long-term partnership in place, that means that not only will it be us, plus two or three more teams that are raising the bar in terms of competitive and content efforts and branding efforts, but also there will be an incentive for the other six teams to make an effort. And I think that is invaluable.
Photos via lolesports
Disclosure: Riot Games, the publisher of League of Legends, is an investor in Blitz Esports.