Major League Baseball’s streaming technology division, known as BAMTech, has struck a deal with Riot Games to stream League of Legends tournaments, according to The Wall Street Journal. The deal, expected to be announced later today, will have BAMTech paying Riot, which is a subsidiary of Chinese media giant Tencent, a minimum of $300 million through 2023. As part of the deal, BAMTech will help Riot launch a dedicated streaming app next year and will handle distribution and monetization of League tournaments across third-party platforms like YouTube and Amazon’s Twitch.
The agreement is a big milestone for e-sports. BAMTech is essentially the gold standard of live-streaming, handling the entire digital backend for the National Hockey League, Professional Golfers’ Association, and other big-name streaming apps like ESPNWatch and HBO Now. That BAMTech has decided to commit such a sizable investment in the competitive side of a game like League of Legends means the traditional sports industry is taking serious financial interest in the future of e-sports. According to the WSJ, revenues from advertising and sponsorships will be split between BAMTech and Riot.
For Riot, it’s an opportunity to break free from third-party streaming sites and continue expanding League’s immense viewership. Until today, the company relied on YouTube and Twitch to distribute video of its tournaments, which can attract as many as 15,000 live attendees and more than 43 million online viewers. Now, instead of dealing with the logistics of maintaining its own broadcasts, marketing, and advertising, Riot will let BAMTech oversee the operation. “Our goal has always been to build League of Legends into a major global sport,” Jarred Kennedy, Riot’s director of e-sports, told the WSJ. “We want our sport to be funded by itself and we think this deal is going to help us get there.”
Contrary to other sports apps, which typically charge a subscription fee, Riot does not plan to charge viewers to watch League content. Instead, it plans to charge for other premium add-ons. The company still makes money through in-game purchases for League, which is a free-to-play title with more than 100 million monthly players. According to sales tracking firm SuperData Research, League is on track to generate $1.89 billion this year alone.