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The LCK, South Korea’s foremost League of Legends league, is facing significant financial challenges. Current reports indicate that the league is incurring drastic losses, with the figures soaring into billions of Korean Won annually.
Financial analysts are concerned that without a shift in their revenue strategies, the LCK might be on the brink of a complete collapse, especially as profitability has sharply declined for 2024.
While previous years were already challenging in terms of profitability, 2024 has marked a steep decline, leading to unprecedented financial losses for the LCK. Predictions for 2025 suggest that the situation may not have improved significantly.
Concerns Over LCK’s Viability
As the landscape of League of Legends esports was restructured leading into 2025, Riot Games has been exploring pathways to ensure sustainability for its pro leagues. Recent financial disclosures for the LCK shed light on some underlying issues impacting its stability.
The reported losses for the LCK during the past few years are substantial:
- 2022: 8.1 billion KRW (~$5,621,000 USD)
- 2023: 13.2 billion KRW (~$9,161,000 USD)
- 2024: 28.5 billion KRW (~$19,780,000 USD)
These figures culminate in total losses of approximately 42.7 billion KRW (~$29,635,000), with 2024 accounting for the majority of this decline.
Moreover, total sales have plummeted from 27.9 billion KRW (~$19,363,000 USD) in 2022 to just 11.4 billion KRW (~$7,912,000 USD) in 2024, marking a significant reduction in revenue.
It’s important to note that Riot Games holds full ownership of the LCK corporation, meaning that while the league may report losses, the overall financial situation could still be advantageous for Riot. A portion of the losses may be attributable to measures aimed at minimizing operational expenses for teams, such as lowering membership fees and introducing profit-sharing initiatives.
The presence of T1, widely regarded as one of the most successful esports teams globally, adds complexity to the financial picture.
A significant factor in the downturn for 2024 was the loss of a lucrative streaming agreement with Chinese platform Huya, which had previously bolstered the league’s finances. Additionally, costs from hosting the Valorant Champions Seoul at the LoL park arena were reflected in the financial statements of the LCK Corporation.
While an immediate collapse of the LCK is not anticipated, experts warn that the current trajectory is unsustainable.
A report from DealSite, a South Korean financial publication, highlights the challenge faced by LCK teams that have invested heavily, noting, “While esports is gaining influence, viable revenue structures remain elusive, leading to increasing costs for Riot Korea.”
With declining viewership trends across most leagues due to restructuring, other regions might find themselves confronting obstacles that are even more severe.
Source
www.dexerto.com