The League of Legends Korea Championship (LCK) has been suffering from heavy losses for the past three years

According to a recent disclosure by South Korean financial media Deal Site, the League of Legends Championship Korea (LCK) has continued to suffer serious losses in the past three years, and the annual deficit has expanded year by year, casting a shadow on the future of one of the most influential e-sports leagues in the world.

According to data disclosed by the Financial Supervisory Service of Korea's electronic disclosure system, LCK's operating company lost 8.1 billion won (about 4.96 million euros) in 2022, 13.2 billion won (about 8.09 million euros) in 2023, and 28.5 billion won (about 17.48 million euros) in 2024. The cumulative loss over the past three years has reached 42.7 billion won (about 26.18 million euros).

A Riot Korea spokesperson said the cost surge in 2024 was partly due to hosting the Valorant Global Series (VCT) in Seoul that year, which significantly increased the cost of organizing the event.

What is even more worrying is that LCK's revenue in 2024 will drop dramatically, to just 11.4 billion won (about 6.98 million euros), a sharp drop of nearly 60% compared to 27.9 billion won (about 17.1 million euros) in 2022. Even with its huge global audience base and brand influence, LCK's current profitability is almost gone.

As the event organizer, LCK needs to maintain large-scale event operations every year - including five game days per week in the regular season, playoffs, MSI and the battle for places in the World Finals, etc. - which requires it to bear huge fixed expenses, such as broadcasting equipment, production teams, and operations staff.

As the current macroeconomic environment continues to tighten, these fixed expenses continue to rise, but LCK's revenue mainly relies on tickets, sponsorships and copyright broadcasts. Its revenue structure is relatively simple and lacks diversified monetization paths, which seriously restricts its ability to resist risks.

LCK introduced the franchise system as early as 2021, aiming to improve the stability of the league and ensure the survival of the teams. However, due to the lack of a continuously growing source of profit, the income allocated by the league to each team each year has become a heavy financial burden for LCK itself.

Industry insiders pointed out that the current financial structure of LCK is close to the edge of unsustainability. If the business model and revenue structure are not adjusted in time, even a league like LCK, which has a top position in the world, may face the risk of further decline.