Corporate sponsorship has become a central driver of revenue in professional sports, yet its strategic management in esports remains under-theorized. In particular, the dual dimensions of continuity (retaining sponsorship partners over time) and diversification (spreading sponsorships across industries) are rarely examined systematically. This is a significant gap because esports organizations operate in highly volatile commercial environments, where sponsorship is often the most controllable revenue stream and the foundation for competitive sustainability.

The League of Legends Pro League (LPL) offers a valuable case for addressing this gap. As China's premier professional esports competition, the LPL operates under Tencent's oversight, combining centralized league-level sponsorship with decentralized club-level partnerships. The LPL's sponsorship ecosystem has faced mounting challenges—most recently, Riot Games' 2025 decision to permit betting companies as sponsors, raising ethical and reputational risks, especially among youth audiences. Such shifts underscore the need to understand how sponsorship portfolios are managed, and whether sustainable models can be achieved under economic, regulatory, and cultural pressures.

In light of these developments, this study investigates whether sustainable, long-term sponsorship management in esports is achievable under current conditions. By quantitatively assessing sponsorship portfolios within the LPL from 2021 to 2024, this research offers empirical evidence and new managerial insights into strategic resilience—and the lack thereof—in the world's most commercially successful esports league.

Sponsorship has emerged as a foundational element in the commercial structure of professional sports. The helix sports marketing model conceptualizes this relationship as a triadic interaction among sponsors, media, and consumers, emphasizing mutual value creation through sustained engagement and brand exposure (1). While this model has matured in traditional sports, its adaptation to esports remains underdeveloped and unstable. Many esports organizations, despite attracting large audiences, lack diversified and dependable income streams. For instance, the NIP Group—the first publicly held esports club from China—reported losses of $6.3 million and $13.3 million in 2022 and 2023, respectively (2), highlighting the fragile financial foundations of esports operations.

Two dominant business models are used to conceptualize the esports club economy. The competition model includes revenues from sponsorships, prize winnings, athlete transfers, and league revenue sharing. However, this model alone is often insufficient for financial sustainability. For example, the League of Legends Champions Korea (LCK) clubs receive only approximately $600,000 per year from revenue sharing agreements—far below the operational needs of a top-tier esports organization (3). The brand operation model, in contrast, focuses on pan-entertainment activities (4) such as content production, influencer marketing, and live streaming. Chinese esports clubs are increasingly embracing this model by leveraging fan engagement and co-creating value with sponsors through localized activities, such as community events, amateur tournaments, and influencer-led product marketing.

Despite these innovations, empirical evidence across regions shows that most esports clubs operate at a loss (2, 5, 6). Ticket sales, merchandising, and in-stadium advertising remain underdeveloped. In this context, sponsorship stands out as the most immediate and controllable revenue stream. Clubs often rely on these deals not only to fund daily operations but also to attract elite talent and build their commercial identity. Yet, despite the critical importance of sponsorship, no academic study has examined how esports clubs manage sponsorship portfolios over time. This is a notable gap, especially given the global shifts in esports sponsorship practices. Although structural and financial conditions vary widely across regions—particularly between politically-linked ecosystems like China's LPL and market-driven leagues like the League Championship Series (LCS) in North America or LCK—the pressures to secure sustainable funding are shared across all top-tier esports leagues.

In seeking a theoretical foundation for effective sponsorship strategy, sports management literature offers important insights. In traditional sports, especially football, hierarchical sponsorship systems and long-standing partnerships are common. FIFA's structure includes tiered global sponsors, such as Adidas and Visa, which provide consistent financial support across tournament cycles. Similarly, clubs like Real Madrid adopt hybrid strategies: they maintain core partnerships with multinational corporations (e.g., Emirates) while engaging in regional deals that enable brand localization and flexibility (7). This model allows for both operational stability and strategic growth.

Empirical studies have further demonstrated that continuity in sponsorship—the retention of sponsor relationships across seasons—correlates with both financial performance and on-field success (8). This is partly due to the formation of a positive feedback loop: a consistent sponsor base supports planning and talent acquisition, which in turn improves performance and brand value. Moreover, diversified sponsorship portfolios protect clubs from reputational or geopolitical shocks. Recent examples include Bayern Munich's termination of its partnership with Qatar Airways under public pressure (9) and the global Boycott Puma campaign due to political affiliations (10). These cases show that overreliance on a single sponsor or industry can expose clubs to sudden and significant losses. Diversification also expands a club's network of stakeholders (11), creating more predictable and resilient revenue streams (12). This mirrors financial portfolio theory, where asset diversification reduces risk and increases return stability. Clubs that actively cultivate a mix of sponsors across sectors tend to perform better during crises and enjoy broader market visibility.

Despite the relevance of these insights, the esports field lacks empirical tools to measure sponsorship continuity and diversification systematically. Existing research remains qualitative or descriptive, often focused on branding, audience engagement, or the psychological appeal of esports. Little attention has been paid to how sponsorship portfolios evolve or how different managerial strategies affect the financial health of clubs and leagues. Moreover, no study to date has quantitatively assessed sponsorship structural similarity across seasons, or mapped portfolio diversity across sectors using standardized classification systems.

This study addresses that gap by introducing a quantitative framework to measure implied sponsorship strategies in esports, using the LPL as a case study. We operationalize continuity through the volatility of year-over-year Jaccard similarity coefficients in sponsor composition, and diversification through the Blau index across 25 industry groups from the MSCI classification system. In strategic terms, continuity captures a club's capability to retain and renew sponsor relationships across seasons, which lowers churn risk, preserves activation learning, and supports long-horizon collaboration. Diversification reflects the breadth of sponsor categories represented in the portfolio, which spreads revenue risk, reduces exposure to category-specific shocks, and signals wider brand reach. Considered jointly, high continuity and high diversification indicate strategic resilience because the portfolio is both stable and buffered against idiosyncratic shocks, whereas low values on both dimensions signal commercial fragility.

In doing so, this study contributes a novel empirical lens to the growing literature on esports management and offers actionable insights for club executives, league organizers, and potential sponsors navigating an increasingly competitive and uncertain sponsorship landscape in esports leagues worldwide.

Through a quantitative analysis of sponsorship portfolios, this study revealed the enigma surrounding continuity and diversification strategies in the LPL. The results demonstrate significant heterogeneity in sponsorship management strategies within the world's most commercial esports league. This finding offers valuable insight into how a rapidly evolving new industry organizes strategic partnerships in the absence of long-established norms.

Sponsorship continuity does not imply a static view of partnership. Tencent, the holder of the LPL brand in China, replaced roughly half of its sponsors every year between 2021 and 2024. Nonetheless, the very low volatility index suggests that Tencent internally employs a mature continuity strategy while reshuffling its sponsorship portfolio. In this way, Tencent effectively “saves three birds with one nest.” First, it strengthens long-term ties with global and domestic industrial giants. For instance, Mercedes-Benz has used its LPL partnership to secure brand prestige among younger Chinese consumers (20), especially in the face of intense competition from domestic EV manufacturers and rising nationalist sentiment (21). Similarly, Bright Dairy, Li-Ning, and JD.com face market saturation and image fatigue, and thus seek brand revitalization through their association with Tencent and LPL. Second, Tencent's approach ensures portfolio sustainability: by maintaining the overall number of sponsors constant, Tencent guarantees a predictable cash flow and preserves the premium value of sponsorship slots within the LPL. Third, by rotating a portion of sponsors annually, Tencent adapts its commercial image to market trends. A prime example is OPPO's aggressive entry into esports, outbidding OnePlus to become the league's smartphone partner. This dynamic restructuring of sponsor portfolios both aligns with real-time shifts in consumer demand and reinforces LPL's reputation as a high-value media platform. Tencent's own approach offers a pathway forward. It demonstrates that continuity and adaptability are not contradictory but complementary. By balancing long-term relationships with selective turnover, Tencent mitigates risk, preserves exclusivity, and ensures that sponsorships remain aligned with evolving market realities.

In contrast, LPL clubs lack a coherent continuity strategy. Most have exhibited a steady decline in sponsors since 2021. The most direct explanation is rooted in financial precarity. Similar to other professional sports clubs in China (22), many esports clubs operate at a loss. To remain viable, they often accept whatever terms sponsors offer, resulting in fragile, short-term arrangements that rarely exceed one year. This behavior is less a deliberate managerial choice than a reactive necessity for survival. The results further reveal that many clubs are either unable or insufficiently equipped to diversify their sponsorship portfolios. Public corporations, by contrast, appear more attuned to the commercial risks of sponsor concentration and proactively manage their brand exposure across industries. This reflects both a stronger corporate governance structure and greater access to marketing resources.

The positioning of clubs within the continuity–diversification matrix further clarifies the variety of commercial strategies at play in the LPL ecosystem. EDG and WE represent two cases of strategic resilience, combining enduring sponsorship ties with a broad cross-category portfolio—a profile consistent with its sustained competitive performance and strong brand equity. EDG, the 2021 League of Legends World Champion, has capitalized on its international visibility, aided by the entrepreneurial background of its owner Edward Zhu, whose extensive business network and managerial experience likely contribute to the club's commercial agility. WE, though less prominent in competitive success, secured substantial public funding from the Xi'an municipal government. This industry-government business incubation has likely strengthened the club's commercial operation capacity and sponsor appeal. Both cases demonstrate how alternative organizational strengths—whether championship success or public institutional support—can substitute for formal ownership advantages in enabling sponsor diversification. In contrast, LNG's placement in the stable niche quadrant reflects a secure but more narrowly focused sponsor base, which may limit brand reach beyond core partner sectors. IG's growth potential status, marked by high continuity but low diversification, suggests that carefully targeted expansion into underrepresented categories could enhance resilience without jeopardizing existing relationships. At the opposite end of the spectrum, AL's at risk positioning underscores how the combination of low continuity and low diversification constrains commercial adaptability, leaving the club more vulnerable to sponsor loss and revenue fluctuations.

However, macrostructural forces have also contributed to the weakening sponsorship climate. The COVID-19 lockdowns in 2020 and 2022 disrupted offline events, forcing a pivot to livestreaming and reducing the effectiveness of jersey branding. Simultaneously, China's digital marketing landscape has shifted dramatically toward algorithm-driven short videos and influencer-centered campaigns (23, 24). Traditional models of esports sponsorship—built on club image, uniform branding, and tournament visibility—have not adapted swiftly enough to compete with these emerging modalities. As such, clubs that fail to evolve face increasing challenges in securing sustainable sponsorship.

Collectively, these findings suggest that the degree of managerial modernization, not merely performance or ownership status, plays a pivotal role in shaping portfolio approach. In esports, where revenue volatility and reputational risks are pronounced, the ability to retain sponsors while cultivating diversification offers clubs a rare dual advantage: financial resilience and brand differentiation. Clubs that lack this managerial capacity are not only more vulnerable to sponsor churn but may also find themselves increasingly marginalized in a maturing and competitive sponsorship ecosystem. This underscores the urgent need for esports clubs to develop internal sponsorship expertise, adopt portfolio-based thinking, and strategically position themselves within broader commercial networks—principles that form the foundation of sustainable sponsorship management.

This study contributes to the growing literature on esports commercialization by advancing our understanding of how sponsorship strategy functions in politically coordinated yet commercially competitive environments. Traditional sports sponsorship, as seen in football, relies heavily on multi-tiered arrangements and legacy branding. For instance, Real Madrid maintains long-standing contracts with Emirates and Adidas while exploring regional marketing partnerships to localize its reach. Esports, however, lacks this hierarchical maturity. Most clubs operate on volatile sponsorships with little room to experiment, let alone secure multi-year deals.

Our findings suggest that blindly adopting the traditional sports sponsorship model may misalign with esports' unique consumption dynamics. For example, jersey visibility—central to traditional sponsorship (25)—carries minimal branding value in esports, as most fan engagement occurs via game screens or livestreaming platforms, not physical arenas. In contrast, if game developers allowed for customizable in-game skins featuring sponsor logos, a new layer of commercial visibility could emerge. This insight opens a novel theoretical direction for future esports marketing research.

Furthermore, our study introduces a methodological contribution. Although the analysis focuses on the LPL, the continuity–diversification framework is portable. Application to other leagues such as LCS or LCK would require harmonizing sponsor category taxonomies, accounting for differences in ownership structure and disclosure norms, and aligning season timing. With these adjustments, the same matrix can position clubs in other contexts and enable cross-league comparison of sponsorship continuity and diversification. We deliberately restrict our empirical scope to the LPL here and view cross-context replication as a next step. These metrics also echo tools used in innovation portfolio analysis, supply chain resilience, and stakeholder mapping—indicating the potential for interdisciplinary extensions.

Uniquely, this study reveals how political economic systems shape managerial intent. In China, ownership of a professional sports club is often less about profit and more about symbolic capital. Corporations, particularly in real estate and retail, may use esports partnerships to gain policy favor or strengthen government relations (26). The Evergrande FC example illustrates how loss-making sports ventures can serve broader business expansion goals (22). This blurs the boundary between financial strategy and strategic influence—a reality that challenges Western economic assumptions embedded in sponsorship theory.

Despite the structural uniqueness of the LPL, our findings point to several transferable lessons for esports sponsorship management. First, ownership structure matters: publicly held clubs leveraged stronger governance and marketing resources to achieve greater diversification, suggesting that governance reform or strategic partnerships can enhance portfolio breadth. Second, while competitive success can attract more diverse sponsors, continuity depends on deliberate relationship management rather than seasonal results alone. Third, sustainable portfolios balance long-term anchor sponsors with selective rotation in category-specific partnerships, enabling both stability and adaptability. Finally, diversification across unrelated sectors reduces exposure to reputational or market shocks, strengthening bargaining power with sponsors.

Tencent's league-level strategy exemplifies these principles, maintaining enduring relationships with global brands while adjusting category partners to align with market trends. Smaller clubs, though operating with fewer resources, can adapt this “continuity-with-adaptability” model in scaled form to build resilience under uncertain conditions. Internationally, leagues such as the LCS and LCK can adopt the continuity–diversification framework to anticipate commercial downturns, retool sponsorship architectures, and promote sustainable operations in volatile esports markets.

Several limitations warrant discussion. In this study we did not measure sponsorship revenue, contract value, or renewal fees, and the available data do not permit identification of causal mechanisms behind continuity or change. As a result, we cannot quantify the direct financial impact of continuity and diversification, nor can we determine whether low continuity reflects managerial choices or external shocks. Future work can address these gaps by combining panel data on sponsorship value and renewal rates with qualitative interviews of club commercial directors and sponsors, and by using event-study or difference-in-differences designs around exogenous changes such as policy shifts or macroeconomic downturns. Such mixed-methods designs would allow tests of whether higher continuity and broader diversification translate into higher and more stable sponsorship income, and would help distinguish strategic decisions from external constraints.

In addition, this study focuses solely on the LPL. While it is the world's most developed league in terms of commercial structure, its political-economic context is unique. Chinese clubs may receive indirect subsidies or reputational rewards that insulate them from financial pressures common in market economies. By contrast, clubs in the LCS and LCK typically operate under stricter financial sustainability constraints. Our decision to exclude these leagues was due to structural incompatibility, differences in revenue models, and scope considerations. We encourage future research to apply our framework across regions for comparative analysis.

This study provides first empirical evidence on how Chinese esports clubs and league manage their sponsorship portfolios. The findings reveal high structural heterogeneity: Tencent, as the league operator, maintains both high continuity and diversification, while many LPL clubs exhibit fragmented, under-diversified, and transient sponsor relationships. These findings have practical and theoretical relevance. They underscore the role of ownership structure, managerial capacity, and brand positioning in determining sponsorship strategy. While public corporations show greater resilience via diversification, private clubs remain vulnerable to market shocks. Meanwhile, performance affects sponsorship outcomes inconsistently, suggesting that relationship-based models—not performance-based sponsorships—may dominate the LPL's future. The study also provides a transferable toolkit for quantifying portfolio approach using established network and diversity indices. These tools allow scholars and practitioners to measure sponsorship sustainability, identify outliers, and benchmark performance against peers across leagues and seasons. As the esports industry navigates increasing economic volatility, ethical scrutiny, and audience fragmentation, this study offers a timely blueprint for sustainable commercial planning.