Team BDS acquires the LEC space of Schalke 04 for 26.5 million euros in the second-largest franchise agreement in western history

After six months of negotiations, Schalke will leave the LEC this fall.

Team BDS acquires the LEC space of Schalke 04 for 26.5 million euros in the second-largest franchise agreement in western history
Photo via Riot Games

Today the second-largest league of legends in Western history is very close to the sale of the sports franchise.

Schalke 04 Esports will leave the LEC in a slot sale to Team BDS for € 26.5 million ($ 31.54 million), the two parties told Dot Esports.

Schalke will exit the LEC at the end of the season after a series of problems faced by the German soccer club. His poor results in the Bundesliga led to his relegation from that league's first division in April, a major blow to the club's finances amid ongoing struggles due to the COVID-19 pandemic. With a significant loss in potential revenue, the club faced the difficult prospect of paying 217 million euros ($ 258 million) in debt, which it confirmed in its 2020 financial report.

Schalke began exploring the sale of its LEC slot last summer.

"You could already anticipate that the club could have problems," S04 Esports managing director Tim Reichert told Dot Esports. “We had a long and intensive sales process, in which we screened many, many applicants, and obviously Riot has been involved in selecting these stakeholders and looking to see if they are a good fit in the league. That was narrowed down to a couple of final applicants in the process. "

Schalke tried to stay afloat without directly selling his LEC position. In April, he sold mid-laner Abbedagge's contract to 100 Thieves for $ 1 million. He also explored possible strategic partnerships and other means to maintain a stake in the slot. But in the end, none of that was enough.

"[Schalke] needed the biggest refund, and the biggest refund is simply the sale of the LEC slot," Reichert said.

The BDS team prevailed in the process, ending an exhaustive six months of negotiations for the Schalke team.

The Swiss organization first entered the League in May 2020, acquiring the La Ligue Française seat from Bastille Legacy.

The Schalke sale is the second-largest Western League franchise sale in history, behind only Echo Fox, which was sold to Evil Geniuses in September 2019 for $ 33 million. Schalke is the first LEC franchise to sell a slot after the EU LCS franchise at the end of 2018. Other professional franchise league sales include a merger between Clutch Gaming and Dignitas, with the latter acquiring a majority stake for $ 20 million. paid first in the summer of 2019. —And Immortals' acquisition of OpTic Gaming's then-parent company, Infinite Esports & Entertainment, cost between $ 35 and $ 45 million in cash and equity in May 2019.

However, the Schalke-BDS deal may not mark the German club's complete exit from the League. The team is evaluating the possibility of keeping its Academy team in the Prime League and told Dot Esports that it hopes to continue nurturing talent at the semi-professional level.

The future of the Schalke squad is also undecided. Almost all of the LEC's starting player contracts will expire in November, with the exception of centerline player Ilias “NUCLEARINT” Bizriken. But the status of his support staff remains up in the air.

BDS executives told Dot Esports that they are interested in recruiting Schalke staff members.

"Discussions are ongoing," said BDS chief strategy officer Alexandre Lopez and executive director Renaud-Pierre Baijot. “There are several members of the Schalke 04 staff that we are interested in. The club itself is an experienced structure that works very well. It would be a pleasure for us to work and humbly learn from their experience to help us integrate into the LEC ”.

BDS is based in Geneva, but most of its league work is next in France. The organization also features teams in Fortnite, Rainbow Six Siege, FIFA, Rocket League, Trackmania, and VALORANT.

“For us, joining the LEC was a final goal and an unmissable opportunity if it ever arose,” said López and Baijot. “The acquisition process took several months and required a lot of work from all of our teams. It was divided into several phases with specific deadlines, including the submission of applications, oral presentations, etc. "

The team will now face the challenges of being a new organization in the major leagues. It will build a team from scratch later this year after its staffing ends this summer and fall, putting a particular interest in LFL talent, the organization said. While it is unclear, it is now official that the LEC will welcome a new team in 2022.

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