[Updated] Scandal! League of Legends LMQ Ownership Disputes and True Worries

LMQ Worries

[UPDATE 7/29/14-1:47PM] Eno, manager of LMQ speaks up regarding current situation by reddit/skyprimo

Quick translation:

  • An investor decides to invest on a hotpot restaurant
  • The investor asks Eno to be in charge of this restaurant
  • We met a volunteer cashier whom everybody adores
  • She met with the regional manager of a well-known herbal drink company (王老吉) and became intimate with each other
  • My boss the investor have encountered financial problems to the point that no one could reach him
  • Licensing issues required the restaurant to be registered to continue operating
  • A temporary solution of allowing the restaurant to be registered under the herbal drink company (王老吉) was agreed upon
  • The agreement was to hand over the restaurant once the investor has sorted financial issues
  • Whilst during this hard-times, the original investor continued to financially support the restaurant
  • When the original investor returns to his restaurant, the cashier lady and herbal tea regional manager asks him for X million dollars RMB otherwise there would be no way they are handing over the restaurant
  • “there is no need to say what came after, in all in they did not spend a single cent in the attempt to steal our restaurant”

Redditors have gone bonkers for this news as picking a side is downright pulled out from a scene of Days of our Lives.

[–]NYCharlie212 [score hidden] 

This has turned into a giant game of he said she said… Until there’s actually an official ruling by Riot/Courts/whoever I don’t think any of these posts should be trusted completely.

My personal gut feeling still lean towards supporting Sharon. From the way that LMQ players have interacted with each other over the last month to the way TC handled both SHRC and the S3 prize money, I don’t know if I would trust much of anything that comes from TC’s camps. I could be 100% wrong of course if it does turn out that Sharon is actually the Triad’s leader’s daughter or something.

[–]WarOfIdeas [score hidden] 

From what I recall TC the actual owner on the contract disappeared and it was his wife that picked up the financial responsibilities. During his wife’s making ends meet was when the temporary holding was reached with A&K and now TC is back.

What finally pulls the trigger of my heart is the LMQ players themselves.

[–]dtrain1 [score hidden] 

Regardless of what happens, the LMQ kids are going to have serious visa problems. Whatever happened, it appears that their P1A visa applications were not sponsored by riot, but by a fake company set up to skirt the rules. The relationship between Esports and P1A visa’s is going to be hurt by this fiasco for a long time. Good luck trying to fix this mess riot, I hope you guys know someone who works at the State Department.

 

Something needs to be done. #LCS Fans Unite!

It’s comes as a shock that shady dealings one would never hope to surface in the NA LCS have trickles over. In a recent announcement from Riot Games LMQ’s Ownership is in the grey.[Riot Games]

Following some questions around LMQ’s ownership, we wanted to share the timeline of events from Riot’s side and hopefully provide some clarity to fans concerned about potential outcomes to the team. Our top priorities are to represent the best interests of the players and maintain a positive, healthy environment for them to continue to compete within the LCS.

As you may have heard, we can confirm that the League has had discussions regarding new ownership of LMQ, including under a recently formed third party entity, Luyu eSports LLC (“Luyu”). The LCS has not yet, however, committed to recognizing any party as LMQ’s owner for purposes of entering into an LCS team agreement.

When any new team owner joins the LCS, we require that the team owner to sign certifications that declare that they do not hold any conflicting interest. Examples of conflicting interests include ownership of multiple teams, or owning a team while sponsoring other teams (Section 3.1 of the official LCS ruleset). When LMQ qualified for the NA LCS last split, we worked with A&K Esports (“AK”), who approached us as owners of LMQ, to file the appropriate ownership paperwork with the League in May.

Soon after the paperwork was filed, AK requested to formally change its name on the team agreement to LoLClass. At this time, we discovered that AK held a conflict of interest that the organization did not disclose in its original paperwork. Since LoLClass currently sponsors several teams in the LCS, we immediately determined that AK were in violation of Section 3.1 of the official LCS ruleset and thus ineligible to be owners. AK (now LoLClass) was left with 2 options: divest ownership of LMQ, or drop their sponsorships of all other LCS teams. LoLClass informed us that they preferred to divest ownership of LMQ rather than give up their sponsorships. From there, we were prepared to give LoLClass a reasonable amount of time to make a transfer of LMQ to a satisfactory owner and continue to allow LMQ to compete within the LCS.

During this time period, a dispute arose whereby a Chinese third party, Guangdong Tian Ci Performing Planning Co., Ltd. (“TC”), contacted us in July, alleging that they, and not LoLClass, were the true owners of LMQ. TC produced evidence which indicated that LoLClass had from the beginning merely been appointed by TC to help manage the team in the U.S. As we understand it, the LMQ players weren’t fully aware of, nor did they completely understand, the existence of any arrangement between TC and AK. In addition, TC told us that they had terminated all relations with LoLClass, and had transferred all LMQ player contracts to Luyu.

Although the League cannot make a formal ruling about the disputes among conflicting team owners such as AK and TC/Luyu, we are continuing to look into the situation to determine whether there can be an acceptable scenario whereby Luyu could be admitted to an LCS team agreement. This may depend on the willingness of all involved parties to come to an amicable resolution.

As we work towards an ownership resolution, we will always be sensitive to the welfare and interests of the players, including with respect to immigration visas and other aspects of fair treatment. We’ll also be checking in to verify to the best of our ability the fair treatment with all the players under any new ownership.

We’re striving to resolve this ownership dispute with limited disruption to the players. We will facilitate a smooth resolution to minimize any further distraction to LMQ as they look to finish off an impressive season in the NA LCS. Based on this incident, we will be reviewing the new owner approval process and owner eligibility requirements for the 2015 Season.

We’ll continue to provide updates as they become available around LMQ’s team ownership.

In recent facebook posts and on reddit from both Sharon Li and Alex Gu (aka Xiang Gu) we get two very distinct sides of the story. Sharon details her story:

Sharon Li
Sunday
Little about me & how I got involved with LMQ

Team LMQ came to Los Angeles in December of 2013, and the whole operations was funded by a man with the alias of “Tian Ci”, who I’ve never met. I was approached by Eno Li (http://blog.ibuypower.com/lmq/), who told me that he was disgusted of the scandanlous Chinese eSports scene and wants to build a team that will be treated fairly in the U.S. I was touched by Eno’s initiative to pave a road for a team of young players to chase their dreams. At the time I was a graduate student of USC, and since the team will be based in LA, I agreed to help.


My Role Within LMQ
I took care of everything on the team: buying food, scheduling scrims, grocery shopping, haircuts, translating, paying bills and many other things you need to do to manage a team of young players who cannot speak English. After being with the team for a while, I felt like a big sister to the players, and as a big sister, I didn’t mind helping and taking care of my little brothers. It was very rewarding for me when the team wins, and when we made it to the LCS, it was all worth it.

The LMQ Hardships
The journey team LMQ had to encounter wasn’t easy. When the team arrived in LA, we couldn’t find a place to live. Most landlords freaked out when they heard a team of gamers were going to play computers in their house all day. After searching for two weeks, we finally found a house that allowed the team to stay under the conditions that we prepay 6-months of rent. The team funding was limited and after paying the 6-months’ rent and the furniture, we didn’t have much money left. In late February Eno had to go back to China and by beginning of March, we were completely out of money. Soon I was told by Eno that the man who funded the team, Tian Ci, had disappeared. Although Eno informed the team of the situation, he didn’t send any money or have any solutions. I then began paying for the team’s expenditures from my own pockets because I wasn’t going to let the team fail after overcoming so many difficulties. Fortunately the Chinese community in LA was very helpful.

What Team LMQ Means to Me
It is important to note that up to this day I have never received any money from Team LMQ. Tian Ci has never employed me nor have I ever been compensated for my work. Like I stated earlier, the players were like brothers to me and we were working together to achieve a dream. Coming from fortunate backgrounds, I was never in it for the money. I only wanted the players to be protected and treated fairly. In late January I began to worry for the players because Eno mentioned several times on the idea of bringing new players to LA from China ( Article ). We had several arguments on the topic but after the team’s financial crisis, it wasn’t brought up again. I did my thesis on Chinese eSports scene when I was obtaining my Master’s at LSE, and I know how chaotic and disturbing the scene is. Although the NA scene is much more professional, I still wanted to make sure that the players were always protected. To me, Team LMQ is family.

The Facebook Post
The team and players have been represented in the LCS by our former sponsor LolClass. The players are contracted under LolClass and their P1-A Visas are approved by USCIS with LolClass as an employer. The independent company has never interfered with the team’s gameplay operations nor made any profits from the team. LolClass told us to just focus on playing the game. Up till this day they have handled the paperwork for us and distributed all the Riot salary. In early July I was informed that there has been a dispute involving Team LMQ. Due to legal matters, I can’t comment much on the dispute, but the Chinese company Tian Ci has come to LA to claim their relationship to Team LMQ.

On Friday I was informed that I was fired from Team LMQ (https://www.facebook.com/LMQiBUYPOWER). I had no idea why the owner is “Luyu Esports LLC” and that I have been fired. All of the Team LMQ staff and players found out about it via Reddit. I was very confused of the matter because there weren’t any formal or informal notices that I have been fired, and then the next day I was told that I was not allowed to go to the LCS Studio with the team anymore and the new Team LMQ general manager is Alex Gu, the former Team LMQ assistant manager. 

Again, the whole LMQ project was founded on the idea that we wanted the players to enjoy the game in a much more healthier environment than the one in China, where everything (here in NA) would be supervised directly by Riot so issues like Royal Club’s Mid laner Wh1t3zZ not receiving his S3 Worlds prize money wouldn’t happen to LMQ players. And when I see TC creating such a drama, after clearly failing their original duties for months, this close to playoffs and qualification to worlds, I can’t help but think that they didn’t even consider how it would affect the players, but focused only on their own interests. 

I wanted to clarify the situation for all the fans out there who support us since we came and made us feel loved just as much as the next LCS team. Such a conflict could end up costing LMQ it’s LCS status, so we will do all that is possible to make sure the players don’t face disqualification and can still enjoy playing the game we all love so much in the best possible environment.

Alex Gu quickly retorted to Sharon with his own point of view of the situation.

Xiang Gu
9 hrs 
My name is Alex Gu, the player manager of Team LMQ. I am a second year graduate student at USC majoring in electrical engineering. In the last eight months I have spent a lot of time with the players of Team LMQ, and lived in the LMQ gaming house for the majority of the time. I can say that I know some things that the fans may not know. This letter to the fans is a bit long, but I hope that I can offer some truth to this situation.

How I Become Involved with LMQ

When the Team first arrive the U.S., back in December 2013, both Sharon and I offered to help the team as volunteers. After a week, the team manager of that time, Eno, and the representative of Tian Ci, He Yi, told me that they would like for me to take on the player manager position. I really love playing this game and really like the players of LMQ as well, so I immediately said yes. At that time, Eno told me my primary responsibilities are to schedule the team’s scrims, manage the player’s daily activities and etc; Sharon will mostly be responsible for public relations, communications with Riot, and the business aspect of the Team.

The first official competition LMQ participated in was a small competition sponsored by CLG, CLG Camp. Many teams in the challenger league took part in this event. Team LMQ successfully placed first in this event and everyone was ecstatic. However, I felt that Sharon was not so happy that day but I wasn’t sure why. The next day Eno told me that Sharon was unhappy because she felt that everyone knows me and not her. To give some background on this, at that time LMQ was playing ranked 5’s games. To gain more fans, we streamed most of our placement matches. I was also frequently promoting the team by providing team backgrounds in twitch chat. As a result, there were a few fans that knew me at that time. Eno told me, streaming is my responsibility and I was only doing my job. He also wasn’t sure why Sharon is not happy about it. Shortly after, Eno informed me that Sharon came up to him and said that she would like to be the public figure of the team. She wants the fan base to know her and she was not happy that they only recognized me. Eno didn’t want the volunteers to work in an uncomfortable environment, so he came to talk to me and asked for my thoughts on the situation. I never cared much about being in the spotlight, so if she wanted to have more exposure, I don’t mind at all. It also doesn’t hurt to have a girl representing the team as it might attract more fans to the Team.

After that I avoided most situations that needed me to be in the public, and mainly just focused on taking care of the players, managing their daily schedule, being the Team’s tech support and would go purchase the team’s groceries with Sharon. During this period of time, because I spent most of my time in the gaming house the players have become family to me. At that time, we were both volunteers and we were willing to do everything we can for team LMQ even without any salaries. To me, money is not that important, nor is my popularity, all I cared is that LMQ can make it into the LCS.

About the Agency Agreement with A&K

Shortly after we came to the U.S., we met A&K and Lolclass’s owner Eric Liao. My first impression of him was that he was a really nice guy and was very hospitable. Later on, perhaps due to his sponsorship with us, he starting becoming closer with Sharon. It wasn’t long before they were in a serious relationship. During those times, Eric was very generous to the players. He would frequently invite everyone out to eat or have fun. I learned from others later that part of the reason for this was so he can go after Sharon.

At first I thought they were very compatible, and was happy for them. However, slowly as time went on, I suspected something was going wrong. Eric, as a sponsor, would always come with Sharon to our gaming house. Before this, Sharon used to discuss team operations with me and Tian Ci, but after she started dating Eric, she would often make the decision by herself.

When LMQ was about to qualify for LCS, because Tian Ci was a Chinese company, it couldn’t help the players apply for U.S. visa. At the time, everyone in LMQ was very worried, fearing that visa issues would prevent us from entering the LCS. Sharon then suggested that her boyfriend’s company A&K can help act as an agency company to help sponsor the player visas. Since time was very tight and we didn’t have many other choices, we discussed this with Tian Ci and quickly signed an agency agreement with A&K. The contract clearly stated that A&K shall only act as an agent to help the team sponsor their visa but does not have actual ownership of the team. Once Tian Ci establish their own company in the U.S., A&K will unconditionally transfer the team back to Tian Ci. Of course, the expenses and fees for the visa applications were all paid for by Tian Ci.

LMQ’s Financial Hardship

All of LMQ’s expenses in the U.S. had been taken care of by Tian Ci. In February and March of 2014, we did have a financial crisis; no one was getting paid during that time. In early April, I heard that Tian Ci had resolved their own financial issues and is once again able to wire money over to the Team. Because Sharon had always been the sole manager to the Team’s bank account I asked her multiple times on whether or not Tian Ci had wire money to the Team, she always responded with “this is not something you have the rights to care about”. I was very worried about the players’ expenses being paid for, so finally I contacted He Yi on my own. He told me that, as soon as their financial situation had turn around, they had already wired the money to Sharon, and he showed me all the documentations from the wires. I felt relieved. I also saw that every time Sharon had reported the expenses to He Yi, she always just gave him an estimation of amount, never showed him any receipts or invoices. To this day, Tian Ci had always wired the amount requested by Sharon for the operational needs of the Team. Tian Ci signed the Agency Agreement with A&K on April 10. After that, Sharon continued to ask Tian Ci for operational expenses every month, and every month Tian Ci wired money to Sharon’s account as requested, Tian Ci also made the payment to Sharon for everything that was owed during the financial hardship. I didn’t understand why Sharon would say that A&K terminated the agency agreement with Tian Ci due to the reason that Tian Ci failed to send money to her. This is completely not true! Why would Tian Ci continue to send her money if the agency agreement has been voided!? Sharon had been receiving money all this time, yet she claims that Tian Ci did not send money after the agency agreement was signed. I have to wonder about her true intentions.

A Day to Remember!

In early June, when our new investor and Tian Ci’s He Yi arrived in the U.S. to prepare for the transfer of LMQ. I started seeing signs of A&K’s intent to steal the team, but I still didn’t want to believe it. I felt that there is no way they would be this heartless.

It wasn’t until June 29th, 2014, when a series of shocking and unforgettable events happened, that I finally realized what is happening. Earlier that day, A&K’s representative Aries Gao, came to our new investor’s hotel room and shocked him with a financial report demanding $120,000USD. The new investor was extremely angry at this and rejected the proposal.

Afterwards we went to the LCS Studio. That day we had just beaten Dignitas, so the new investor wanted to take everyone out for dinner to celebrate. Right when we were about to leave, Sharon stormed into the player’s room and screamed at me in front of all the players. How dare you cancel the shuttle to take them to eat without my authorization? She also pointed at me and yelled” Who do you think you are? Are you the manager or am I the manager? What gives you the right? Everything has to go through me!” The players were all dumbfounded seeing this. However, in the end, the new investor and I still took the players to dinner to celebrate. 

After dinner that night, we were dropping the players off at front door of the gaming house. Sharon was there and told us that Eric was waiting inside the house and wanted to talk to us, so we went inside. However, after we went into the house, there were two scary looking guys in black shirts waiting for us instead. Eric himself was actually not there, he called us from China and spoke through speaker and proclaimed himself to be the owner of the team in front of everyone. He said, whether the team will be transfer is up to him, the price for the new investor can be negotiable but whether he will actually sell it has to depend on his mood. Throughout this announcement, the 2 tough looking guys were standing by Sharon’s side and kept trying to intimidate and scare us. The new investor wanted me to call the police, but one of the tough guys said, “Don’t even think about it, I will just throw your phone into the swimming pool.” So the investor put the phone back into his pocket. After Eric finished his speech, one of the black shirted guys even called someone that’s not in the house, mentioning that there should be no more problems here, they don’t need anyone else to come. The players were too scared to make a sound and just kept looking at each other. I was scared by what was happening as well. We were very concerned for the safety of our players, and we believed if we stayed at the gaming house to argue with them, then it would cause more unnecessary problems and threaten the safety of the players. So we chose to not confront them and leave the house.

On the way back to the hotel, I finally understood, Sharon, you were like me in the beginning, working as volunteers only for the good of the team. You did help out a lot, but did you felt that you and your boyfriend had the rights to claim the team just because you offered your help to the team? After Sharon started to date the owner of A&K, she always said the team was theirs. No wonder you refuse to admit you had received money, were you trying to pave the way for A&K to forcefully take over the team? I even remember multiple times where she threaten to withdraw the players’ P-1A application and sent players all back to China if we don’t let her manage the team the way she wants.

I never thought it would come to this stage, but finally we had to seek legal protection for the team. We hired our lawyer to resolve this and so, on July 1st, our lawyers issued an official termination notice to A&K’s Aries, Sharon, and Eric. I didn’t know why Sharon would pretend that she was surprised by our announcement last Friday. We issued that statement last Friday because in the past month, since our lawyer’s notice to A&K, A&K refuse to communicate with us. At the beginning of July, we held a three way conversation with A&K and Riot, Riot hoped that we would resolve the issue ourselves through negotiation A&K agree that they will do their best to resolve this issue with us. However when we tried to contact them after the call, they refused to answer our calls and emails, even when they gave us their lawyer’s contact information it was a name and number that was never reachable. We have informed Riot of A&K’s unwillingness to negotiate. 

In order to let our players to stay focused on the matches and not to be distracted by such disputes, I’ve been holding back and remaining silent. Also, I was worried about the players’ visa application since Sharon still holds all of the players’ passports. I originally wanted preserve Sharon’s reputation, especially since she was the one who introduced to LMQ and gave me the opportunity to become the player manager. This was until I saw her Facebook statement which contains lots of inaccurate information that could have easily misguided our kind-hearted fans. It even threatens team LMQ’s eligibility to continue playing in the LCS, let alone our players’ dreams to win Worlds in season 4. That’s why I now choose to speak up. I sincerely hope that after reading my letter, our fans have learned more about the truth. Thank you so much for your time and for your continued support of team LMQ.

LMQ StandingLMQ currently stands at #1 in the North American LCS. Riot Games is currently investigating the situation and for the most part it looks like the lawyers will be brought out. This is so aggravating because the well-being of the players should be the most important aspect of team. Last weeks performances by LMQ, seems to be an alarm at home this situation is truly affecting the team. We’re talking about young players being flown across the country without knowing the language being used as pawns. It’s disgusting and revolting! One can only hope that the NA LCS will learn from this and guarantee it wont happen again.

What are you thoughts about this scandal? Let us know below!

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Narz

Narz

Founder, Staff Writer
Narz is a journalist whom writes about League of Legends, video game psychology, gaming events in NYC, and loves being a otaku. Currently studying CBT/positive psychology in independent research to one day become a Player behavior Specialist for eSports. She also loves curry and wine. (/◕ヮ◕)/