The Business of the LCK: Fees, Losses and the Fix Behind Korea's League

Korea's League of Legends teams win most of the world titles, fill KSPO Dome for finals and draw a huge share of the game's global audience. For years, almost all of them also lost money. That contradiction sits at the centre of the LCK's franchise system, the business model that has run Korea's top league since 2021.

Five years in, the model has been through two big repairs: an entry-fee cut in 2024 and a new way of sharing revenue in 2025, followed by the league company being folded back into Riot Games Korea. Here is how LCK franchising works, where the money comes from and why it has been so hard to make it pay.

From relegation to permanent slots

Before 2021, the LCK worked like European football. Teams that finished at the bottom could be relegated, and teams from the second tier, Challengers Korea, could fight their way up. That made for dramatic promotion series, but it also made the league a risky place to invest: a bad season could wipe out a sponsor's whole budget.

In April 2020, Riot announced that the LCK would move to a franchise model, which Riot calls a long-term partnership, from 2021. Applicants had to submit a letter of intent by May 8, 2020 and a full business, operations and funding plan by June 19. The key promises were:

• No more relegation. Partner teams keep their place regardless of results.
• A minimum salary of 60 million won for LCK players, up from 20 million won, at the time reportedly the highest minimum of any pro league in Korea.
• Revenue sharing and business investment from the league.
• A new Academy League in place of Challengers Korea, so every team would develop its own young players.

On November 3, 2020, the ten partners were confirmed. Nine were existing LCK teams, including T1, Gen.G, DAMWON, DRX, KT Rolster and Hanwha Life Esports, and the tenth was hyFresh Blade, which became Brion. The only LCK team left out was SeolHaeOne Prince, which had finished last in the summer.

The price of a seat

The entry fee was the controversial part. Returning teams agreed to pay 10 billion won each (about US$8.8 million at the time), spread over five years, so roughly 2 billion won a year. The new entrant paid 12 billion won. For comparison, Korea's retail group Shinsegae paid about 6 billion won to enter the KBO, the country's professional baseball league.

In return, teams received an equal share of league revenue. In 2022 Riot Games Korea distributed 8.3 billion won across the ten teams, roughly what one superstar player was estimated to earn in a year.

Why the numbers did not add up

The problem was that costs rose faster than income. Player salaries went up sharply after franchising, and top players earn from several hundred million to several billion won a year. T1, the most famous team in the world, recorded an operating loss of 16.6 billion won in 2022 on expenses of 18.3 billion won, about 80% of which went on player salaries. Other teams reported losses in the tens of billions of won.

The league company itself was in trouble too. Disclosures reported in Korea showed LCK Ltd. losing 8.1 billion won in 2022, 13.2 billion won in 2023 and 28.5 billion won in 2024, while its revenue fell from 27.9 billion won to 11.4 billion won over the same period. The big 2024 loss, about $26 million, came largely from a sharp drop in sponsorship budgets.

Meanwhile Riot Games Korea, which runs the game itself, was very profitable. It paid more than 90 billion won a year in royalties to its US parent between 2020 and 2022, and a 111.6 billion won dividend on top. The money in Korean League of Legends was real; it simply flowed through the game, not the league.

The repairs: fee cuts and the Global Revenue Pool

The first fix was cheaper membership. In 2024 the LCK cut the franchise entry fee by 33%, which it said would take 33 billion won off teams' future payments, and it distributed 13 billion won in support to teams that year. In 2025, franchise fees were cut again, by $2 million per team, or about $20 million in total.

The second fix was structural. In March 2024, Riot president of esports John Needham announced that from 2025 teams in the LCK, LCS and LEC would move away from the old deal, which he described as roughly a $10 million buy-in in exchange for 50% of certain league revenues, mostly sponsorship. Instead, teams receive a fixed stipend plus a share of a new Global Revenue Pool (GRP), built from sales of digital esports content such as team skins, event passes and emotes. The pool is split three ways:

• 50% General Shares, divided among all Tier 1 teams
• 35% Competitive Shares, based on league standings and international results
• 15% Fandom Shares, rewarding teams that build fan bases

Before the GRP, only teams that reached MSI or Worlds earned from digital sales, about 20 to 30 teams a season. The new pool spreads that money across the whole top tier. One estimate in the Korean press suggested individual team payouts rose two to three times in 2025. T1 reported revenue of 12.9 billion won, which is thought to include GRP money, Worlds skin revenue and income from its Valorant team.

Folding the league back into Riot

In late 2025, LCK Ltd. was merged into Riot Games Korea. The company said the move would tie the league more closely to the game, unify strategy under one management, raise team revenue through the GRP and make the league's finances more sustainable. Revenue from in-game events and merchandise can now be pooled with league income, which matters because the game business is where the profit is. Riot Games Korea reported 491.3 billion won in revenue and 102.7 billion won in operating profit for 2025.

By the numbers

• 10 partner teams since 2021; 0 relegations
• 10 billion won: original entry fee for returning teams, paid over five years
• 60 million won: the LCK minimum salary, up from 20 million won
• 28.5 billion won: LCK Ltd.'s 2024 loss, the worst of the franchise era
• 33%: the 2024 cut to franchise fees
• 50 / 35 / 15: how the Global Revenue Pool is split
• 491.3 billion won: Riot Games Korea's 2025 revenue

What to watch

The LCK has stopped the bleeding by moving money from the game into the league, rather than finding vast new sponsors. That works as long as League of Legends keeps selling skins and passes, which makes the health of the game itself the league's real business plan. Watch the 2027 GRP payouts, whether the touring events become regular, and whether teams' own disclosures show losses shrinking. For how the teams performed on the field this year, read our LCK 2026 season review.