LCK faces sustainability crisis with 3-year deficit of $35 million
League of Legends Champions Korea (LCK), which is arguably the most globally successful and iconic esports league, has been facing financial crisis over the years. The LCK has reported net losses of almost $20 million for its 2024 financial year, nearly doubling its deficit from last year.
The shocking numbers in 2024
The LCK is the professional esports league for League of Legends in South Korea. It’s managed by Riot Games Korea and is considered one of the strongest and most respected leagues in the world.
According to the Financial Supervisory Service, the a ₩8.1 billion loss ($5.75 million) in 2022, which increased to ₩13.2 billion ($9.3 million) in 2023, and then skyrocketed to ₩28.5 billion ($19.99 million) in 2024.
Over these three years, the cumulative loss reached a staggering ₩47.4 billion ($35 million). To make matters worse, revenue plummeted from ₩26 billion ($18.3 million) in 2022 to just ₩11.4 billion ($8 million) in 2024, marking a 60 percent drop.
Causes of the deficit
A spokesperson from Riot Korea said one of the reasons for the increased costs in 2024 was due to hosting the VALORANT Champions Tour (VCT) in Seoul, according to a report by local media outlet DealSite.
Chinese streaming platform Huya, which had exclusive rights to the Korean League in China since 2018, did not renew its deal in 2024, further affecting the league’s revenue generation. Huya itself faced declining live-streaming and sub-licensing revenues, leading to a reduction in licensing fees for the LPL from 300 million RMB ($42.3 million) to 230 million RMB ($32.4 million) for 2024 and 2025.
Esports ecosystem is struggling
Esports organisations around the world continue to face mounting pressure as they struggle to establish business models that are both profitable and sustainable. South Korea’s League of Legends Champions Korea (LCK) recently reduced franchise entry fees by approximately one-third. This cut translated to a reduction of around ₩33 billion ($24.8 million) from the original ₩102 billion ($76.7 million) cost.
To support struggling teams, the LCK also offered an additional ₩13 billion ($9.8 million) in financial aid and introduced a revenue-sharing model, giving teams 50 percent of the league’s income.
The financial difficulties extend to even the most high-profile teams. T1, the reigning world champion and one of the most storied organisations in League of Legends, reported a loss of ₩8.8 billion ($6.6 million) for the 2024 fiscal year. Gen.G, another prominent team in the LCK, publicly acknowledged its inability to reach profitability as early as 2023, according to CEO Arnold Hur.
Despite the grim financial outlook across much of the industry, there are rare examples of success. French esports organisation Karmine Corp has stood out by reporting profitability for two consecutive years. Similarly, G2 Esports was one of the first to demonstrate that profitability in esports was possible, having posted a positive EBITDA of $1.5 million back in 2021.
