Red Bull Media House is in the process of winding down sponsorships with North American multigame esports teams Cloud9 and Team SoloMid as a result of a what Riot Games considers a potential conflict of interest, sources close to both the energy drink company and the teams told ESPN.
Moving forward, Red Bull North America -- which also sponsors a number of tournaments in the fighting game community, such as Community Effort Orlando and Genesis 4 -- will look to sponsor other teams in the North American esports ecosystem. It is currently negotiating a contract with multigame organization Tempo Storm -- the current basis is a $3 million, multiyear deal -- industry sources told ESPN.
The closure of the agreements with TSM and C9, which initially launched in December 2015, is a result of Red Bull's main company, Red Bull GmbH in Austria, owning and operating an European League of Legends Challenger Series team, named the Red Bulls.
This presents a conflict with Riot Games' sale of sponsorship rules, which previously barred technology company Curse from title-sponsoring Team Curse and partnering with Team SoloMid for its Curse Voice platform in 2014. That case is the only prior enactment of the sale of sponsorship rule and is set as precedent for the Red Bull case.
As a result of the closure, two Team SoloMid Super Smash Bros. players, William "Leffen" Hjelte and Gonzalo "ZeRo" Barrios, will undergo visa changes. Both were technically employed by Red Bull and have their travel accommodations booked by that company, due to Super Smash Bros. and fighting game players currently being ruled ineligible for P-1A internationally recognized athlete visas by the U.S. Department of State.
One source told ESPN that they believe Leffen and ZeRo's employment status will be resolved "without any hiccups."
Red Bull GmbH first launched its European League of Legends team in May, based around former Team Vitality support Raymond "kaSing" Tsang. The team then qualified for the European League Challenger Series on May 28.
It's unsure of how losing the Red Bull sponsorship, which sources say was very lucrative for Cloud9 and Team SoloMid, will affect the finances of these organizations. Both teams are often regarded as two of the most wealthy and established brands in North American esports, with the latter being the most popular brand in the space.
Cloud9 declined to comment on this story. Team SoloMid, Tempo Storm, Riot Games and Red Bull did not respond to requests for comment.