The global sports industry’s inexorable march towards competitive video gaming has gathered considerable momentum over the past two years.
According to the latest figures published by Newzoo, arguably the most trusted source for data and statistics pertaining to the esports market, the global competitive gaming industry is projected to generate in excess of US$1.5 billion in annual revenues by 2020, up from an estimated US$660 million in 2017. Underscoring that growth is the continuing convergence of professional sports and competitive gaming, not to mention the ongoing efforts to bring a more formalised structure and clearly defined regulatory framework to the booming esports industry.
For outside investors and non-endemic entities, however, knowing where and how to invest is not always clear. Organisations and individuals across sport generally acknowledge the fast-growing, millennial-laden nature of esports, and many have already formulated some form of esports strategy, yet the sector’s heavily nuanced and fragmented ecosystem can often seem bewilderingly complex and thus daunting to navigate.
Still, many investors have already found avenues through which to get into the game. Some, like the National Basketball Association (NBA), are in the process of setting up their own officially licensed, branded competitions in partnership with video game publishers – that all-powerful clique of developers who continue to reign supreme over the worldwide gaming ecosystem. Others have taken to approaching the sector in different ways, perhaps acquiring existing esports teams and organisations or buying up media rights to established properties with sizeable followings.
Blazing a trail
More than their counterparts in other major sports leagues, owners and executives within the tech-savvy NBA have collectively led the charge into esports, blazing a trail for the traditional sports world as they approach the gaming sector en masse and from multiple angles.
At the league level, the NBA’s biggest esports play to date takes the form of the NBA 2K League, which is notable for being the first official esports competition owned and operated by a North American professional sports organisation. Launched in partnership with Take-Two Interactive Software, the developer of the popular NBA 2K video game series, in February 2017, the new venture will initially feature 17 of the NBA’s 30 franchises, each of whom will compete in five-on-five play over the course an inaugural season that tips off this May and will run until August.
While the NBA 2K League is being positioned as the focal point of the NBA’s league-wide esports strategy, interest in gaming within basketball’s preeminent property in fact predates its creation. In 2015 Memphis Grizzlies investor Stephen Kaplan became the first NBA owner to invest in esports team ownership, securing a stake in the venture capital-funded entity Immortals at a time when pro sports’ presence in gaming was virtually non-existent. Another first-mover into the space was Dallas Mavericks owner Mark Cuban (below right), who was part of an investment round for Unikrn, one of North America’s few legal esports betting platforms.
Those investments set the ball rolling, prompting an influx of other NBA owners and investors who have crossed over in similar fashion. In September 2016, Josh Harris and David Blitzer – the American business partners whose holding company, Harris Blitzer Sports & Entertainment (HBSE), operates various assets including the NBA’s Philadelphia 76ers and the New Jersey Devils of the National Hockey League (NHL) – took ownership of the Team Dignitas esports franchise. That same month, in a deal that was reported at the time to be one of the largest team purchases in esports history, Washington Wizards owner Ted Leonsis, Golden State Warriors co-owner Peter Guber and NBA great Magic Johnson purchased a controlling interest in Team Liquid through their newly created investment vehicle aXiomatic.
Others within the NBA have followed a similar path, investing their money directly into team ownership. Since early 2017 the Miami Heat have owned a stake in the UK-based Misfits – whose co-founder and chief executive Ben Spoont now operates the Florida Mayhem franchise, backed by the Heat, in Blizzard Entertainment’s new Overwatch League, an international city-based competition which launched in January.
Elsewhere Milwaukee Bucks co-owner Wesley Edens has established FlyQuest, who compete alongside the likes of the Golden Guardians, the esports representatives of the Golden State Warriors, and 100 Thieves, who have received investment from Cleveland Cavaliers owner Dan Gilbert, in Riot Games’ new League of Legends North American League Championship Series (LCS); Sacramento Kings minority owners Andy Miller and Mark Mastrov have co-founded NRG Esports, the celebrity and former athlete-backed operators of the San Francisco Shock Overwatch League franchise; and the Madison Square Garden Company (MSG), owner of the New York Knicks, has acquired a controlling stake in Counter Logic Gaming (CLG), which competes across some of esports’ most popular games, including League of Legends and Counter-Strike: Global Offensive (CS:GO).
In concert with these investments, NBA teams have set about allocating greater resources to building out their in-house esports operations while courting expertise from within the gaming world. In 2016 the Houston Rockets became the first sports franchise in North America to hire an executive specialising in esports, installing Sebastian Park to oversee what would become their Clutch Gaming division. The Indiana Pacers and the aforementioned Leonsis’ Monumental Sports & Entertainment (MSE) installed their own esports directors not long after.
While the NBA has led the way into esports, the National Football League (NFL) has not been far behind. Its first major push into competitive gaming will see the launch of the Madden NFL Club Championship in partnership with Electronic Arts (EA), creator of the Madden video game series. The annual tournament, which will feature players aged 16 or older representing all 32 NFL teams, is designated as a major in this year’s Madden Championship Series (MCS), an EA-operated competition which offers a total prize pool of US$1.153 million, nearly a third of which is distributed via the NFL’s Club Championship.
While several of its teams have previously staged offline Madden events in their home markets, the NFL has said the creation of the new tournament represents the ‘largest competitive gaming commitment ever by a US professional sports league’. Such one-upmanship is perhaps indicative of the longstanding rivalries that exist in North America sport, highlighting the degree to which esports is already being seen as a new front in the battle for supremacy.
In any case, even before August’s announcement of the Madden competition NFL franchise owners were showing serious intentions in the gaming space. In July, Los Angeles Rams owner Stan Kroenke and Robert Kraft of the New England Patriots both bought franchises in the Overwatch League – acquiring teams in Los Angeles and Boston respectively – for a reported US$20 million apiece. Those acquisitions were then followed in November by the news that one of the NFL’s most influential figures, Dallas Cowboys owner Jerry Jones, and real estate magnate John Goff had purchased a majority share of Complexity Gaming, one of America’s oldest esports organisations.
Not to be outdone by those in the NBA and NFL, a host of wealthy team owners, high-profile athletes and other well-heeled industry heavyweights have also bought up stakes in esports teams.
Among the ranks of Major League Baseball (MLB), for instance, LA Dodgers co-owner Todd Boehly is now an investor in Cloud9, one of North America’s most successful League of Legends teams, while the New York Yankees have taken a stake in Vision Esports, an investment vehicle which is the largest single shareholder in three esports properties: Echo Fox, Twin Galaxies, and Vision Entertainment. New York Mets chief operating officer Jeff Wilpon has secured his own Overwatch franchise, New York Excelsior, while Neil Leibman, a co-owner of the Texas Rangers, now holds a majority stake in OpTic Gaming, the organisation behind the league’s Houston Outlaws outfit.
Taken together, these investments serve as testament to one of the standout early successes of competitions like Blizzard’s Overwatch League and Riot’s LCS, which has been their ability to bring pro sports investors into the esports fold. By deploying a more familiar franchise-based business model – with all the central marketing support, protected intellectual property rights and guaranteed commercial revenues that come with it – the new ventures have helped bring about a degree of order and transparency to a notoriously unregulated and often opaque industry, instilling confidence among outsiders, including big-brand sponsors such as Toyota, that esports need not be a high-risk investment.
Kraft, the Patriots owner, was certainly taken by the Overwatch model. At the time his group confirmed its long-rumoured investment in Blizzard’s startup league, he had this to say: “We have been exploring the esports market for a number of years and have been waiting for the right opportunity to enter. The incredible global success of Overwatch since its launch, coupled with the league’s meticulous focus on a structure and strategy that clearly represents the future of esports made this the obvious entry point for the Kraft Group.”
esports,sponsorship,soccer,SmartSeries,nba,gaming
The global sports industry’s inexorable march towards competitive video gaming has gathered considerable momentum over the past two years.
According to the latest figures published by Newzoo, arguably the most trusted source for data and statistics pertaining to the esports market, the global competitive gaming industry is projected to generate in excess of US$1.5 billion in annual revenues by 2020, up from an estimated US$660 million in 2017. Underscoring that growth is the continuing convergence of professional sports and competitive gaming, not to mention the ongoing efforts to bring a more formalised structure and clearly defined regulatory framework to the booming esports industry.
For outside investors and non-endemic entities, however, knowing where and how to invest is not always clear. Organisations and individuals across sport generally acknowledge the fast-growing, millennial-laden nature of esports, and many have already formulated some form of esports strategy, yet the sector’s heavily nuanced and fragmented ecosystem can often seem bewilderingly complex and thus daunting to navigate.
Still, many investors have already found avenues through which to get into the game. Some, like the National Basketball Association (NBA), are in the process of setting up their own officially licensed, branded competitions in partnership with video game publishers – that all-powerful clique of developers who continue to reign supreme over the worldwide gaming ecosystem. Others have taken to approaching the sector in different ways, perhaps acquiring existing esports teams and organisations or buying up media rights to established properties with sizeable followings.
Blazing a trail
More than their counterparts in other major sports leagues, owners and executives within the tech-savvy NBA have collectively led the charge into esports, blazing a trail for the traditional sports world as they approach the gaming sector en masse and from multiple angles.
At the league level, the NBA’s biggest esports play to date takes the form of the NBA 2K League, which is notable for being the first official esports competition owned and operated by a North American professional sports organisation. Launched in partnership with Take-Two Interactive Software, the developer of the popular NBA 2K video game series, in February 2017, the new venture will initially feature 17 of the NBA’s 30 franchises, each of whom will compete in five-on-five play over the course an inaugural season that tips off this May and will run until August.
While the NBA 2K League is being positioned as the focal point of the NBA’s league-wide esports strategy, interest in gaming within basketball’s preeminent property in fact predates its creation. In 2015 Memphis Grizzlies investor Stephen Kaplan became the first NBA owner to invest in esports team ownership, securing a stake in the venture capital-funded entity Immortals at a time when pro sports’ presence in gaming was virtually non-existent. Another first-mover into the space was Dallas Mavericks owner Mark Cuban, who was part of an investment round for Unikrn, one of North America’s few legal esports betting platforms.
Those investments set the ball rolling, prompting an influx of other NBA owners and investors who have crossed over in similar fashion. In September 2016, Josh Harris and David Blitzer – the American business partners whose holding company, Harris Blitzer Sports & Entertainment (HBSE), operates various assets including the NBA’s Philadelphia 76ers and the New Jersey Devils of the National Hockey League (NHL) – took ownership of the Team Dignitas esports franchise. That same month, in a deal that was reported at the time to be one of the largest team purchases in esports history, Washington Wizards owner Ted Leonsis, Golden State Warriors co-owner Peter Guber and NBA great Magic Johnson purchased a controlling interest in Team Liquid through their newly created investment vehicle aXiomatic.
Others within the NBA have followed a similar path, investing their money directly into team ownership. Since early 2017 the Miami Heat have owned a stake in the UK-based Misfits – whose co-founder and chief executive Ben Spoont now operates the Florida Mayhem franchise, backed by the Heat, in Blizzard Entertainment’s new Overwatch League, an international city-based competition which launched in January.
Elsewhere Milwaukee Bucks co-owner Wesley Edens has established FlyQuest, who compete alongside the likes of the Golden Guardians, the esports representatives of the Golden State Warriors, and 100 Thieves, who have received investment from Cleveland Cavaliers owner Dan Gilbert, in Riot Games’ new League of Legends North American League Championship Series (LCS); Sacramento Kings minority owners Andy Miller and Mark Mastrov have co-founded NRG Esports, the celebrity and former athlete-backed operators of the San Francisco Shock Overwatch League franchise; and the Madison Square Garden Company (MSG), owner of the New York Knicks, has acquired a controlling stake in Counter Logic Gaming (CLG), which competes across some of esports’ most popular games, including League of Legends and Counter-Strike: Global Offensive (CS:GO).
In concert with these investments, NBA teams have set about allocating greater resources to building out their in-house esports operations while courting expertise from within the gaming world. In 2016 the Houston Rockets became the first sports franchise in North America to hire an executive specialising in esports, installing Sebastian Park to oversee what would become their Clutch Gaming division. The Indiana Pacers and the aforementioned Leonsis’ Monumental Sports & Entertainment (MSE) installed their own esports directors not long after.
While the NBA has led the way into esports, the National Football League (NFL) has not been far behind. Its first major push into competitive gaming will see the launch of the Madden NFL Club Championship in partnership with Electronic Arts (EA), creator of the Madden video game series. The annual tournament, which will feature players aged 16 or older representing all 32 NFL teams, is designated as a major in this year’s Madden Championship Series (MCS), an EA-operated competition which offers a total prize pool of US$1.153 million, nearly a third of which is distributed via the NFL’s Club Championship.
While several of its teams have previously staged offline Madden events in their home markets, the NFL has said the creation of the new tournament represents the ‘largest competitive gaming commitment ever by a US professional sports league’. Such one-upmanship is perhaps indicative of the longstanding rivalries that exist in North America sport, highlighting the degree to which esports is already being seen as a new front in the battle for supremacy.
In any case, even before August’s announcement of the Madden competition NFL franchise owners were showing serious intentions in the gaming space. In July, Los Angeles Rams owner Stan Kroenke and Robert Kraft of the New England Patriots both bought franchises in the Overwatch League – acquiring teams in Los Angeles and Boston respectively – for a reported US$20 million apiece. Those acquisitions were then followed in November by the news that one of the NFL’s most influential figures, Dallas Cowboys owner Jerry Jones, and real estate magnate John Goff had purchased a majority share of Complexity Gaming, one of America’s oldest esports organisations.
Not to be outdone by those in the NBA and NFL, a host of wealthy team owners, high-profile athletes and other well-heeled industry heavyweights have also bought up stakes in esports teams.
Among the ranks of Major League Baseball (MLB), for instance, LA Dodgers co-owner Todd Boehly is now an investor in Cloud9, one of North America’s most successful League of Legends teams, while the New York Yankees have taken a stake in Vision Esports, an investment vehicle which is the largest single shareholder in three esports properties: Echo Fox, Twin Galaxies, and Vision Entertainment. New York Mets chief operating officer Jeff Wilpon has secured his own Overwatch franchise, New York Excelsior, while Neil Leibman, a co-owner of the Texas Rangers, now holds a majority stake in OpTic Gaming, the organisation behind the league’s Houston Outlaws outfit.
Taken together, these investments serve as testament to one of the standout early successes of competitions like Blizzard’s Overwatch League and Riot’s LCS, which has been their ability to bring pro sports investors into the esports fold. By deploying a more familiar franchise-based business model – with all the central marketing support, protected intellectual property rights and guaranteed commercial revenues that come with it – the new ventures have helped bring about a degree of order and transparency to a notoriously unregulated and often opaque industry, instilling confidence among outsiders, including big-brand sponsors such as Toyota, that esports need not be a high-risk investment.
Kraft, the Patriots owner, was certainly taken by the Overwatch model. At the time his group confirmed its long-rumoured investment in Blizzard’s startup league, he had this to say: “We have been exploring the esports market for a number of years and have been waiting for the right opportunity to enter. The incredible global success of Overwatch since its launch, coupled with the league’s meticulous focus on a structure and strategy that clearly represents the future of esports made this the obvious entry point for the Kraft Group.”
This feature forms part of SportsPro's Esports Week series. Visit sportspromedia.com for the rest of our esports coverage
