Why Pro Teams Invest In eSports

WHY PRO TEAMS INVEST IN ESPORTS

The Miami Heat Invest In eSports Team Misfits (Photo: Ginx TV)

TNL Infographic 027: The NBA's eSports Investment (Source: The Next Level   Infographic: Jordan Fragen)

This week, John Gaudiosi wrote an article on alistdaily titled "Miami Heat And Misfits Find Synergy Between Basketball And eSports" - which sums up everything I've said for almost the past year. 

I'm going to quote directly from the article, Miami Heat executives and Misfits CEO Ben Spoont to look at exactly where the venn diagram of Pro Sports and eSports overlap.

Here's what Heat CEO Nick Arison had to say about the deal: "The Miami Heat pride ourselves on being innovative in all aspects of sports and business. For us, it made perfect sense to partner with Misfits, a young and ambitious franchise in a sport that is blazing a trail in terms of 21st century recreational competition amongst Millennials"

Quick story: When I was in college back in the Triassic period, I interned at the Miami Heat and Nick Arison was 14 years old then. This quote is from Bloomberg "Nick Arison, the Heat’s chief executive officer who declined to comment for this story, has spent most of his 32 years chasing basketball autographs -- first on posters and scraps of paper and now on hundred-million-dollar contracts". I got him Michael Jordan's autograph. I'll leave it at that.

 

AUDIENCE

The young eSports Audience (Photo: Riot Games)

While the average NBA viewer is not as geriatric as Major League Baseball, 37 is still older than than the "prime" advertiser demographic of 18-34. But eSports fit's squarely in that target market with the average viewer age around 25.

Michael McCullough, Miami Heat's EVP and CMO said “The opportunity was the fact that the eSports audience is, for the most part, younger and digital and social media savvy. We were interested in finding out if there was any crossover with their audience and ours, and how we could access that youthfulness for the benefit of the Miami Heat."

Schalke 04 was the 2nd team in Germany's Bundesliga to invest in eSports after Vfl Wolsfburg. What they recognized was the potential of eSports in attracting a younger audience.

 

MARKETING

The Miami Heat At Home (Photo: Sports Illustrated)

McCullough has seen Misfit fans who are Heat fans and are excited they have an NBA team they can root for and Heat fans who are eSports fans come to the forefront. 

Read that again. The marketing opportunity goes both ways.

Manchester City made moved into eSports in May 2016 by signing Kieran ‘Kez’ Brown.  Kez is a Twitch streamer, branded videos on YouTube as well as Facebook.

Since the start of the 2013/14 season, Man City’s Facebook page has grown 287 per cent.

 

BRANDS

ASUS ROG Sponsors French Team PSG eSports (Photo: PSG)

PSG FC (Paris Saint-Germain) has not only made the eSports move but heavily promote their team across social media.

It's not shocking that they've been one of the first Pro Sports associated eSports team to garner a sponsorship.

VfL Wolfsburg’s eSports team partnered with Turtle Beach and will use their gear and accessories during competitions.

The Miami Heat are handling the sponsorships, sales and activation and marketing for Misfits directly. Misfits CEO Ben Spoont said that one benefit of having the Heat handle that business is that brands that are non-endemics to eSports are endemic to basketball. The professional service an NBA team can provide is unparalleled.

“We’ve seen potential business partners who are either involved in the eSports world or want to be involved and are excited we partnered with Misfits and are looking to do things with both of us,” said McCullough. “That’s been the most eye-opening thing in this experience so far. We didn’t expect that.”

Read that again.

 

MERCHANDISING

Germany Soccer Club Schalke 04's eSports Team (Photo: Schalke 04)

This is an absolute no-brainer - merchandise and jerseys make a lot of money for Pro Sports teams.  Now leverage this with eSports.

Pro Teams that have invested in the space - like PSG, Schalke 04, VFL Wolfsburg - all have their eSports athletes wear the traditional Sports team jerseys.

McCullough said the Heat are creating an entire line of Misfits clothing by its in-house creative team for the Heat-specific brand Court Culture.  

“It’s very localized and we can react to things quickly on the court with player-specific shirts that resonate with fans,” he said. We’re implementing the same process we use for Court Culture, where it’s all locally designed and created and we have local distribution through the Heat store channel." 

TL/DR:

By investing in eSports, Pro teams get access to 1) a younger audience 2) a potential new International fanbase 3) Marketing opportunities for both the traditional team and the associated eSports team 4) Brand opportunities and 5) Sell more merchandise. 

 

Your move MLS and NFL.

AS Roma Launches eSports Team and Fnatic Partnership

AS ROMA LAUNCHES ESPORTS TEAM AND FNATIC PARTNERSHIP

AS Roma Launches eSports Team With Fnatic (Photo: AS Roma)

TNL Take: The Pro Sports and eSports investment continues with one of  Italy's top Serie A teams AS Roma joining the party and the 11th partnership in 2017 so far.

2017 Pro Sports and eSports Investment (Infographic: The Next Level)

AS Roma entering eSports is slightly different than previous pro teams however:

  • Instead of launching an internal eSports division (like Paris St-Germain) or working with an agency (like VFL Wolfsburg), AS Roma partnered with top UK based team Fnatic to launch their team
  • AS Roma's first 3 FIFA Athletes are also unique as they're not just based in Italy but the US and UK as well
  • Fnatic is probably the leader in eSports merchandise with their own hardware line and even launching a London pop-up store last year. Look to the AS Roma partnership to help drive jersey sales

AS Roma's 1st 3 International FIFA Athlete's (Photo: AS Roma)

One thing that many media sites missed is that this is the 2nd Boston Celtics's involvement after Jonas Jerebko bought eSports team Renegades last year (AS Roma is owned by Celtic's Co-Owner Jim Pallotta).

Jim Pallotta's Raptor Group's Investments (Photo: Raptor)

AS Roma has already been promoting their new eSports squad with a Facebook Live stream generating almost a half million views and 50k on YouTube.

A Chat With Splyce On Their Boston Bruins Investment

A CHAT WITH SPLYCE ON THEIR BOSTON BRUINS INVESTMENT

Boston Bruins' Parent Company Delaware North Invests In Splyce (Photo: Splyce)

TNL TAKE: 2017 has seen an immense amount of activity across the eSports landscape and last week was no exception.

Danish Soccer club Brondby IF became the 8th Pro Sports investment this year along with the 2nd team from Denmark.

The NBA made a huge move by announcing a national eSports League with NBA2K.

Then Delaware North, parent company of Boston's TD Garden and home of the Boston Bruins - which is also owned by Delaware North chairman Jeremy Jacobs - announced a strategic investment with eSports team Splyce.

Delaware North Sportservice, operates food, beverage and/or retail services in more than 50 professional sports venues, with clients in the NFL, MLB, NHL, NBA and Major League Soccer - including Nationwide Arena which held the MLG Columbus Counter-Strike Major event.

They were clearly aware of the growth in eSports having published two reports on the opportunity in the "Future Of Sports" report.

Announcing the partnership, CEO of Delaware North’s Boston Holdings Charlie Jacobs echoed the sentiments of other Pro Sports owners entering eSports by saying “With the experience and resources that Delaware North brings to an already-established esports team, we’re looking forward to exploring many different collaborative opportunities. That could include everything from sales and marketing to hosting events to broadcasting.”

I spoke with Splyce Co-Founder Marty Strenczewilk on the investment and what it means for both Delaware North and the team going forward.

Splyce Co-Founder Marty Strenczewilk (Photo: Strenczewilk

TNL: First off, congrats on the deal. I love seeing good, hard working people succeed in eSports. Talk about how this partnership with Delaware North first got started and what made you choose to go with them?

[Marty] Thanks! We were connected through mutual colleagues, which was in a way inevitable because we are both Western NY businesses. The choice to work with them was much easier than you'd think from our end: they have a major northeast city with an arena, allowing us to stay in our preferred geography while gaining a major hub; their business expands far beyond sports and gives us access to many other things outside of the Bruins (for example, we're doing a bootcamp shortly at a different Delaware North property); we have very similar management ideals and there was an instant connection and good working relationship.  One of their senior execs is a big eSports fan and that gave us the confidence of having someone who really understood and believed in what we were doing. 

TNL: Outside of the Helsinki Reds and San Jose Sharks, this is only the 3rd investment from either a Pro Team, owner or company that’s involved with Hockey. As the NBA has clearly led in US eSports investment, do see more investment from the NHL side and what’s the potential for Hockey eSports?

[Marty]I've mentioned this recently on Reddit, but I truly believe the only reason the NBA was so far ahead was they summit they had talking about eSports a year earlier than everyone else. It took them just as much time to get comfortable with eSports as any other sports owner, they just had a head start. I think hockey and basketball are the obvious two favorites to attach to eSports, since they already own or work with an indoor arena - that's a challenge football and baseball - in North America - will have to sort out for the future. 

TNL: Delaware North runs the concession business for the Columbus Arena, where MLG’s Counter-Strike event took place last year. Explain how Splyce will work together with Delaware North to leverage their assets like the TD Garden, Boston Bruins and relationship with many arena’s nationwide?

[Marty] Actually a conversation we've already had was about that exact event - how they were successful and how our eSports knowledge can better help them program concessions for the future. I can't go into a ton of details around what we have planned, but I can tell you we plan to do a lot with the Garden and activating Boston fans in the area. We're already exploring ideas on how to do that with the Bruins fans specifically. 

TNL: Last, it seems that one of the main areas that Pro Sports teams are providing an advantage to eSports teams and their investment has been to make use of the existing Sales and Sponsorship teams. What can you speak to in attracting Non-Endemic Brand Sponsors? What Brand would you want to work with the most?

[Marty] This is an obvious no brainer, since they are already experts in sales. We plan to utilize the huge sales team Delaware North has, combined with our insider eSports knowledge to go out and get some awesome brands involved - especially now that we can offer the regional element along with the global nature of eSports. No specific brands to name, as the list would be too long of awesome brands I know we can do great stuff with. [Edit: Awesome answer]

Dallas Cowboys Considering eSports Team Buy

Dallas Cowboys Considering eSports Team Buy

Dallas Cowboys In EA Madden NFL 17 (Photo: EA Sports)

Dallas Cowboys In EA Madden NFL 17 (Photo: EA Sports)

TNL Take: It's not a matter of if, it's a matter of when.

While European Soccer continues it's dominance, the NBA is leading eSports investment amongst the top 4 US Sports Leagues.

Now it looks like the NFL is finally ready to make its move.

The Dallas Cowboys are said to have spent the last year looking into buying an eSports team.

Cowboys Senior VP of Brand Marketing Matt O'Neil told AdWeek "If we thought we could buy a team for -- gimme a number -- $2 million, $3 million, $5 million or whatever, but get $7 million in sponsorship deals over the next couple years it becomes a no-brainer".

FYI Matt, it's going to cost more than $2M.

What's even more interesting is who the Dallas Cowboys worked with - not an eSports company - but Epsilon, a Direct Marketing company that has been slowly transitioning to Creative and Strategy over the last few years.

Epsilon launched a new internal group called Data Design that hopes to show Clients which Brands are associated with eSports and of those, which Brands match most closely with the Cowboys' fanbase.

Expect more of this customized service that Agencies will provide in 2017.

In the 2016 eSports Review: Pro Teams, I made 5 predictions and looks like 4 of them are about to already happen:

/01 An NFL team will make a move before next season starts

/02 Europe will continue to dominate overall investment

/03 Another country will announce a similar e-league like France's

/04 A publisher will work with a league to form a more formal structure

/05 eSports teams will start wearing Pro Team merchandise

 

2017 Pro Team investment in eSports is off to a roaring start.