TL;DR: Team Impulse management has repeatedly failed to pay their players on time and to provide valid contracts for their players, as required by the LCS Rules and Team Agreement. League officials have, on multiple occasions, clarified requirements and even directly intervened in team operations to ensure payments, and have determined that Team Impulse does not meet League standards for a professional organization. As such, they will not be permitted to continue participating in Riot-sanctioned leagues.

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.