How Each CBLoL 2021 Team Will Pay The Franchise Fee – The Esports Observer
2021 is the year the Brazilian League of Legends Championship (CBLoL) officially becomes a franchise. The 10 selected teams were announced by Riot Games in October, and each one has a franchise fee of $4M BRL (roughly $790K USD) to be paid. The Esports Observer contacted Riot Games in Brazil to learn more details on the financial terms for the franchised organizations regarding payments and earnings.
Riot said that, for the franchise fee, “the payment will be made in annual installments, so it does not strongly impact the investment capacity of the teams in the first year of CBLoL, when we understand that there are several fundamental investments to be made to make the plans and business strategy of the teams viable. We cannot disclose the number of installments because it is confidential information.”
Riot also did not disclose financial and revenue details of the franchise, but it revealed that “the model provides the sharing of commercial revenue from the league. In other words, part of the league’s revenues from sponsorships, transmission agreements, and other products, will be allocated to a revenue fund that will be shared with organizations. The model also provides for the creation of new products with partnerships between the brands of the league and organizations. Any revenue that arises from these businesses will also be incorporated into the fund and shared as projects are launched.”
TEO then collected information from each involved organization about the financial plans to pay for their spot, preparing for the CBLoL franchise structure in 2021.
The team is the result of a merger between two Brazilian organizations, Prodigy and Falkol Esports. CEO Marina Leite talked to TEO in October and explained that the fee will be paid with the organization’s own resources, relying on a business plan designed to generate profit in the first months of operation. Read more here.
CEO Thomas Hamence spoke to TEO in November, explaining that paiN Gaming is a surplus organization and has resources to pay for the franchise without external investments. The $4M BRL will be invested as a CAPEX (capital expenditure) within the organization. It doesn’t mean paiN is closed to receiving investments for 2021, on the opposite, it is willing to talk with interested investors. Learn more here.
Managed by Simplicity Esports, a publicly-traded company in the U.S., the organization announced in March an investment of $500K USD from Triton Funds, which would be used for acquiring the CBLoL Franchise. Also, in August, Simplicity sold 7.5% of its licensing rights of the brand from the soccer club Clube de Regatas do Flamengo to the peripherals manufacturer Redragon, with the intention of using the funds raised to secure the spot.
Although it is a new organization in the CBLoL, LOUD is already one of Brazil’s biggest organizations mainly thanks to its strong presence in the Free Fire scene. The organization told TEO that the franchise fee will be paid with its own resources, but did not disclose further details.
In June, INTZ announced it was offering 10% of the company for an investment round, intending to raise funds to pay for the franchise fee. No investments were closed to date, but the organization is already considered one of the most popular in Brazil and has renewed all its 2020 sponsorships for 2021.
CEO Djary Veiga spoke to TEO in October revealing the organization received a Series A level investment by the Brazilian business group Componente. Such investment will be used to pay for the franchise spot and enhance the team’s infrastructure. Learn details here.
TEO spoke with FURIA owners André Akkari and Jaime Pádua, who said that the organization is in a comfortable financial condition to pay the CBLoL franchise with its own current resources. Besides Akkari and Pádua, other owners and investors are Cristian Guedes, Rafael Moraes, and Tel Genovesi.
Contacted by TEO, Red Canids Kalunga did not want to disclose details.
Also new on the CBLoL, the organization is managed by E-Flix eSports, which licensed the brand from the popular Brazilian soccer team Cruzeiro Esporte Clube. However, E-Flix did not answer TEO’s request for comments.
Contacted by TEO, KaBuM! Esports did not want to disclose details.
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