$1M Too Low? Ocelote Thinks LCS Spots Are Undervalued


G2 Founder Implies He Doesn’t Want to Purchase NA LCS Spot for Moral Reasons, Despite Economic Upside

Related Story: EnVyUs Purchase Renegades LCS Spot, Roster in Flux

Carlos “Ocelote” Rodríguez Santiago thinks the going rate for LCS Spots is too low. The former pro player turned team owner took to Twitter amid the flurry of deals and ownership transfers that has become commonplace in the weeks before an LCS split.

Ocelote suggests that there is more money to be made from owning an LCS team than the already impressive sum of a million dollars justifies. In fact, he continues, it’s such a good deal that he would buy a slot in NA, if he didn’t think it was potentially immoral.

When prompted about the “conflict of interest” referenced, Ocelote clarified:

In other words, Ocelote thinks that there is so much money to be made from owning a League of Legends team that he would happily pay a million dollars to buy another team, if not for the potential for malfeasance that could arise if both teams happened to meet each other in an international tournament. (You know, all three of those we have each year.) Is Ocelote trying to drum up the price of LCS spots so that he can jump ship from G2? Is he trying to draw more investment money into the scene? Does he just want to stir up some drama? It all sounds a little farfetched the way he has presented it, but could there be something to it?

More from League of Legends Esports

A million dollars has been the go-to quote for an LCS spot since news of Gravity Gaming’s sale broke last year. This number has since been corroborated by former LCS owners and numerous news stories surrounding other team sales. Last week, FPS esports organisation EnVyUs purchased a spot from Renegades for an amount rumored to be similar, implying that the value has gone unchanged in the last year. However It’s possible that the price of the Renegades slot was depressed by the team’s short-notice, mandatory sale as ordered by Riot. It’s certainly believable that given more time to negotiate, and without the loss of leverage that comes with openly needing to sell, Renegades ownership could have bargained for even more.

It’s also worth remembering, just buying a slot isn’t enough; you also need to run your organization and field a team of players. Hearthstone pro Andrey “Reynad” Yanyuk, founder of esports org TempoStorm, opened up about his bids to buy one of the available NA LCS spots while streaming on Twitch: “To buy an LCS spot and a roster is going to cost me like 1.5 million.” The roster presents a particularly huge caveat, as an unsuccessful team risks falling to relegation. Presumably, nobody wants to buy an LCS team only to end up without an LCS team months later. Reynad cited this risk as a difficulty, in addition to a volatile market in which LCS spots can be flipped around quickly for profit.

So where does the “ROI” from owning an LCS team come from? Why would an organization or investor want to spend more than a million dollars on one of these spots? Some LCS teams sell t-shirts, but that hardly seems be a reliable (or valuable enough) business strategy. Other teams own valuable websites that bring in heavy traffic, and earn lucrative deals through advertising and sponsorship. However, those with the most money seem to be looking towards the future, with an eye towards the golden word in the world of sports ownership: franchising. As traditional sports figures like Rick Fox and Shaquille O’neal back LCS teams, now joined by full-on sports organisations like German Bundesliga team Schalke 04, it seems likely that big business changes (and possibly big growth) are on the way for League of Legends and esports. Only time will tell if Ocelote’s claims pan out.

Next: 2016 Summer Split: EU LCS Schedule

Keep up with more Esports news on Blog of Legends!

Is Ocelote totally crazy? Would you pay more than a million dollars for an LCS spot?