Renegades e Impulse fuera de la NALCS

CONTEXT:

Over the course of this split we have received multiple serious allegations about the Renegades organization. The allegations have been centered around (1) team ownership structure and behavior, (2) player welfare and treatment within the team and (3) collusion/competitive integrity. After weeks of investigation, we have found several of the allegations to be corroborated by testimony and evidence from parties involved.
Team Ownership

We have been provided with evidence that current Renegades owner Christopher Mykles had a deal in place with suspended former owner Chris Badawi that would grant Badawi a 50% stake in the team once his suspension had expired. Per LCS rules, any present or future right to ownership is considered a firm ownership stake regardless of the date of effect, which makes any such agreement reached with Badawi during the term of his suspension to be a direct violation of League rules. Further, Mykles failed to disclose this arrangement during the LCS team vetting process, which we consider to be an intentional and material omission apparently designed to circumvent the clear and public ban of Badawi. For the avoidance of doubt, had Mykles openly disclosed this ownership arrangement, Renegades would not have been accepted into the LCS.
Player Welfare

Throughout the past split, we have heard testimony regarding various player welfare concerns involving Renegades, primarily around Badawi’s conduct while serving in a non-ownership capacity during his suspension term. These allegations, corroborated to Riot by multiple sources who have had close contact or affiliation with the team, included confrontations between management and players, refusal to honor payment and contract provisions, and failure to maintain a safe environment for all team members. Allowing an unsafe environment to exist for players is the responsibility of the entire Renegades management, and is a failure to meet the professional standards we expect of LCS owners and team representatives.
Independence of Teams and Competitive Integrity

We have also found that Renegades and TDK have deliberately misled League officials with respect to their corporate relationship. While handling trade requests between the two teams leading up to the Spring Promotional Tournament, League officials made repeated direct inquiries of the team owners regarding independence of the two organizations, terms of the trades, and status of players and payments. Both teams assured officials that their businesses were not linked in any fashion, and that the trade was in the mutual interest of both teams independent of any additional relationship or agreement. Subsequently, League officials received evidence that indicated that some of the players were compensated and/or housed by their former teams even after the trade was completed, including payments for the month following the trade. As part of the trade approval process, REN and TDK had submitted a document which was represented to be the summary of the trade agreement, but it included no provisions beyond simple assignment of the contracts, and did not establish cause for the former team to continue payments to the now-traded players.

Per the LCS Rules, teams are required to be truthful and forthcoming in their representations to the League. Both REN and TDK were found to have provided incomplete and/or inaccurate answers and documents to deliberately hide a relationship and interactions which exceed acceptable bounds. Co-mingled finances and operations can lead to establishment of influence between teams that forces one party into non-beneficial decisions (like trading away strong players) and, at worst, unfair play (described in Rule 10.1 of the LCS ruleset) - that’s why such arrangements are expressly forbidden in the LCS ruleset and Team Agreement.
RULING:

Renegades has violated its team agreement and LCS rules, and is hereby disallowed from participating in any Riot-sanctioned league. In order to minimize disruption to their players, Renegades will be granted a grace period until 11:59pm PST on May 18th to sell all rights and legal claim to their LCS berth, meaning a finalized transfer agreement must be presented to League officials, and the owner must pass the standard approval process. This grace period is contingent on Renegades cooperating with League officials in any requests/communication around player welfare and/or the transfer process, and is subject to revocation.

Due to his existing disciplinary history (including current status as a suspended owner), as well as the degree of his personal involvement in the cited offenses, Chris Badawi is permanently banned from any association or affiliation with a team in a Riot-sanctioned league. Due to his lesser involvement in these transgressions as a remotely-located owner, Christopher Mykles is banned for one year (until the start of the Summer Split in 2017) from holding any ownership or Riot-recognized position (including GM, team coach or team analyst) with any team in a Riot-sanctioned league. This ban does not extend to any casting or broadcast analyst work, as those positions are independent of team operations and not covered by this ruling.

TDK has also violated its team agreement by being untruthful in its representations to the League about its trade requests. Therefore, TDK will not be allowed to participate in the CS Summer Split. In order to minimize disruption to their players, TDK will be granted a grace period until May 18th to sell its spot. Given the previous issues with TDK ownership, Chris Shim and Sean Shim are indefinitely banned from any association or affiliation with a team in a Riot-sanctioned league, with the first opportunity to apply for reinstatement for a league position on January 1, 2019.
RELEVANT RULES:

3.1 Team Ownership Restriction

...Any buyback provision, right of first purchase, or similar interest in a team shall be treated as a controlling interest in such team for the purposes of enforcing ownership restrictions. …

The League shall have the right to make final and binding determinations regarding Team ownership, issues relating to the multiple team restriction and other relationships that may otherwise have an adverse impact on the competitive integrity of the LCS.

10.2.16 Document or Miscellaneous Requests.

Documentation or other reasonable items may be required at various times throughout the LCS as requested by LCS officials. If the documentation is not completed to the standards set by the LCS then a team may be subject to penalties.

Team Application Process

Independent of the LCS ruleset, failing to disclose Badawi’s interest in Renegades was a material omission of fact under our LCS team application process. Misrepresentation to the League is a material breach of the LCS Team Agreement.
Q&As:

Q: Why are you not releasing more evidence of these offenses?

A: First and foremost, we are not disclosing evidence because we have an obligation to protect the parties involved. People have placed their trust in us by stepping forward and we need to protect them from possible retribution. Further, some of these are serious allegations that extend beyond our LCS ecosystem, and it is not our goal to affect these parties outside of LoL esports.

Q: What about the players, managers, or coaches? Did they do anything wrong?

A: The general manager, head coach, and players on Renegades were not implicated in any wrongdoing, nor were the head coach and players on TDK. To be clear, we do not have reason to suspect any collusion in regards to the results of the match between REN-TDK in the recent Promotion Tournament. We believe these individuals have done nothing but try to compete as best they can, and we will be working with them to support their continued involvement in the LCS.

Q: If these guys broke League rules, why are you letting them sell the spot at all?

A: We believe that this is the best way to protect the players, as a buyer for the team will hopefully be inclined and able to negotiate for the assignment of the players’ contracts as well. If the team agreement was simply terminated, the players’ existing contracts cannot be transferred by Riot to a new owner, so would require new negotiations and would not necessarily include all former players.

Q: Isn’t 10 days an unrealistic time frame to sell an LCS/CS team?

A: While we want to give REN/TDK ownership a fair window in which to exit the league, we also want to make sure a new team has a reasonable amount of time to prepare for the Summer Split. Further, we believe that 10 days is more than sufficient to sell an organization; from past experience, we are aware of multiple potential buyers who have expressed interest in becoming part of the League. Given the time remaining before the start of the Summer Split, we believe this is the fairest solution for Renegades/TDK ownership, their players, and the league.

Q: Why not give the slot to the REN players?

A: While we appreciate the work that the REN players have put in to that team’s success and continued performance in the LCS, legally, the slot belongs to the REN organization. By allowing REN to transfer the spot to an established ownership group (who will still need to qualify through the LCS vetting process), we can bring closure in the most efficient and amicable manner. We hope that any new owner would consider bringing the REN players onto the new squad.

Q: What happens if REN or TDK fail to sell their spot by the deadline?

A: While we’re not able to fully discuss them to avoid disrupting a potential sale, we will have follow up steps should a new owner not be found (and deal agreed upon) within the timeframe. Our primary concern is to hopefully facilitate a smooth sale process that protects existing players as much as possible, and we will be transparent about further steps in the event that either team fails to sell.

Q: What is the difference between “permanent” and “indefinite” bans?

A: They represent a difference in the possibility of reform. We believe that some parties are capable of learning from and reforming the behavior that led to this ban, as we’ve seen with certain players who have come back from what were once permanent bans. We believe Sean Shim and Chris Shim could return to the LCS sometime in the future. We do not believe there is a place for Chris Badawi anywhere in the LoL esports ecosystem.

Q: Does this mean Monte won’t be able to cast League of Legends anymore?

A: As described above, this ruling only involves Christopher Mykles, the owner of Renegades, and has no bearing on Monte’s status as a caster for OGN, IEM, or any other League competition. Monte’s contract and status with OGN is solely a matter for those two parties to decide, as it always has been.

Q: What does this mean for Renegades Banditos in the EU CS?

A: Banditos will not be allowed to participate under this ownership group. CS ownership, however, is not defined or granted to organizations until entry into the Challenger Series, which has not yet occurred for Banditos. Therefore we will continue to work with the Banditos players as the owners of the CS opportunity and help them either find new owners and branding or set up the necessary structure to participate in the EU CS, if they qualify.

CONTEXT:

Since Team Impulse took over the LCS spot from LMQ, there have been several reports of failure to sign contracts with their players or to provide prompt payment, despite multiple interventions by League officials.

No Contracts: In March 2016, a routine League-wide contract audit revealed that Team Impulse had no contracts signed with any of their players, despite submitting summary sheets which falsely claimed that full contracts existed. Upon further investigation, it was additionally determined that no player from the previous split had contracts either. Team Impulse quickly moved to resolve the problem, and showed League officials actual signed contracts for several players, but failed to sign contracts with all players on their Active Roster, remaining in violation of LCS rules which require all rostered team members to have a valid contract.
Late or Missing Payments to Players: Over the course of 2015 and 2016, Team Impulse ownership has been chronically late in paying its players the League-mandated Minimum Player Compensation (MPC), in addition to any other contractual payments owed under their respective arrangements with their players. During the 2015 Summer Split, League officials learned that TIP players had not been paid for the duration of the split, and immediately intervened to ensure that MPC was paid in full to date for all players. During the investigation following the contract audit in March 2016, it was discovered that TIP had again failed to pay its players their owed MPC for the duration of the split. In addition, several players notified League officials that they had not been paid their agreed-upon full salaries (money owed in addition to the MPC), but, given the lack of proper contracts, League officials were unable to verify these claims. As of this ruling, several team members are still believed to be owed money, in some cases amounting to multiple months of pay.

RULING:

Team Impulse’s management has repeatedly violated its Team Agreement, and is hereby disallowed from participating in the LCS. In order to minimize disruption to their players, TIP management will be granted a grace period until 11:59pm PST on May 18th to sell all rights and legal claim to their LCS berth, meaning a finalized transfer agreement must be presented to League officials, and the owner must pass the standard approval process. This grace period is contingent on TIP cooperating with League officials in any requests/communication around player welfare and payments and/or the transfer process, and is subject to revocation.

TIP is also fined $20,000 from its final team payment from the league.
RELEVANT RULES

2.2 Player Compensation

Each team must distribute the required Minimum Player Compensation ($12,500/€11,250 per starting player per split during the 2016 season and the designated substitute stipend) to its starting players, in accordance with the terms of the applicable Team Agreement...

3.2 Roster Requirements

…All Starters must have a written contract with the team they are playing for.
Q&A:

Q: Can you help the 2015 players get the money they’re owed?

A: We approached TIP about this issue and they deny that they owe players from their 2015 roster any further payment. We verified that all players have received their minimum player compensation, but since there is no written contract between both parties, we have no objective way to determine who is correct about the additional money owed. That said, this situation is entirely the result of TIP management failing to have written contracts with their players, which is in part why they are not being permitted to continue in the League.

Q: Why wasn’t TIP’s owner fined or publicly warned for non payment issues before now? Why was this allowed to get to crisis point?

A: When players came to us in Summer 2015 regarding non-payment by TIP ownership our first priority was to get them paid to the point of compliance with League minimums. After TIP paid their players, we opted to give them a final warning rather than penalize them because they had been reasonably cooperative and prompt in addressing that issue.

After discovering the continued misconduct this split, including TIP ceasing payments to players on its 2015 squad after our investigation ended last year, TIP ownership exiting the league is for the best. Moving forward, we’ll be putting much harsher penalties into place for teams who fail to pay their players promptly, hopefully avoiding any repeated patterns.

Q: If these guys broke League rules, why are you letting them sell the spot at all?

A: We believe that this is the best way to protect the players, as a buyer for the team will hopefully be inclined and able to negotiate for the assignment of the players’ contracts as well. If the team agreement was simply terminated, the players’ existing contracts cannot be transferred by Riot to a new owner, so would require new negotiations and would not necessarily include all former players.

Q: Isn’t 10 days an unrealistic time frame to sell an LCS team?

A: While we want to give TIP ownership a fair window in which to exit the league, we also want to make sure a new team has a reasonable amount of time to prepare for the Summer Split. Further, we believe that 10 days is more than sufficient to sell an organization; from past experience, we are aware of multiple potential buyers who have expressed interest in becoming part of the League. Given the time remaining before the start of the Summer Split, we believe this is the fairest solution for Team Impulse ownership, their players, and the league.

Q: Why not give the slot to the TIP players?

A: While we appreciate the work that the TIP players have put in to that team’s success and continued performance in the LCS, legally, the slot belongs to the TIP organization. By allowing TIP to transfer the spot to an established ownership group (who will still need to qualify through the LCS vetting process), we can bring closure in the most efficient and amicable manner. We hope that any new owner would consider bringing the TIP players onto the new squad.

Q: What happens if TIP fails to sell their spot by the deadline?

A: While we’re not able to fully discuss them to avoid disrupting a potential sale, we will have follow up steps should a new owner not be found (and deal agreed upon) within the timeframe. Our primary concern is to hopefully facilitate a smooth sale process that protects existing players as much as possible, and we will be transparent about further steps in the event that either team fails to sell.