3 Pro Sports Teams Investing In eSports In Last 4 Days

3 PRO SPORTS TEAMS INVEST IN ESPORTS IN LAST 4 DAYS

Delaware North/Boston Bruins Investment In eSports Team Splyce (Photo: Splyce)

Delaware North/Boston Bruins Investment In eSports Team Splyce (Photo: Splyce)

TNL Take: As we all move toward the singularity and live more of our lives in a digital world, we increase the pixelated ephemera we leave across Facebook, Twitter, Snapchat, YouTube, Twitch and whatever pops up next.

For better or for worse, we at least have a recorded timeline of our history and yesterday and I got a digital reminder of the following I wrote 1 year ago to the day:

Traditional Sports Invade eSports (Photo: Arena Online)

Traditional Sports Invade eSports (Photo: Arena Online)

If you're a regular reader you'll know how involved Pro Teams have been in the last year but here's a quick recap:

TNL Infographic: Pro Sports Team eSports Investment (Infographic: The Next Level)

TNL Infographic: Pro Sports Team eSports Investment (Infographic: The Next Level)

In just 9 months in 2016 since I wrote that, 20+ Pro Sports teams invested in eSports.

In the last 4 days we've seen 3 pro teams look to invest in eSports.

Here's a recap of the teams and leagues looking to make the leap since the last update:

 

MLS FINALLY MAKES A MOVE

MLS's 1st eSports Signing: NYC FC's Chris Holly (Photo: NYC FC)

MLS's 1st eSports Signing: NYC FC's Chris Holly (Photo: NYC FC)

After watching European soccer teams and leagues dominate eSports involvement, the MLS finally made a move with New York FC signing FIFA athlete Chris Holly

It's not a surprise that NYC FC was the first to make the move as they're partially owned by Manchester City, which was the 2nd English Premier League team to sign a FIFA athlete last July.

 

MEXICO'S CLUB AMERICA TEASES ESPORTS ANNOUNCEMENT

Not much was revealed outside of a Tweet however Liga MX team Club America would be Mexico's first pro team eSports investment.

 

FRANCE CONTINUES TO ROLL

French Soccer Club Lille Olympique Sporting Club (Photo: Pinterest)

French Soccer Club Lille Olympique Sporting Club (Photo: Pinterest)

France has been one of the most active participants at the intersection of pro sports, eSports and media starting last year with several teams getting involved and Webedia purchasing the ESWC (Electronic Sports World Cup) and eSports platform; in addition to their national league, Orange e-Ligue 1.

2017 is no different with Olympique Lyonnais increasing their investment by signing 4 Chinese FIFA players.

OL's 4 Chinese FIFA Athletes (Photo: Olympique Lyonnais)

OL's 4 Chinese FIFA Athletes (Photo: Olympique Lyonnais)

This week saw the 4th Ligue 1 team looking to make the move with LOSC not only looking at FIFA but League of Legends as well.

 

AUSTRALIA'S ADELAIDE CROWS BUY ESPORTS TEAM LEGACY ESPORTS

Australian Football League's Adelaide Crows (Photo: Getty Images)

Australian Football League's Adelaide Crows (Photo: Getty Images)

Earlier this month, the Australian Football League announced their intent to enter eSports and potentially hold a tournament at Etihad Stadium.

Note to the AFL: Please don't attempt your 1st involvement in a 50,000+ seat capacity stadium

A day after the LOSC announcement, the AFL's Adelaide Crows announced the purchase of Legacy eSports, a local team fielding teams in several games.

 

The Houston Rockets hired a Director of eSports Development and the Warriors have an open position. Expect even more investment and job opportunities as these two industries collide.

Tottenham Hotspur Expect To Make £3M Per eSports Event

TOTTENHAM HOTSPUR EXPECT TO MAKE £3M PER ESPORTS EVENT

eSports. Up There. (Photo: Getty)

eSports. Up There. (Photo: Getty)

TNL Take: It should be no surprise to regular readers that English Soccer teams have been one of the most involved in eSports.

As I've already listed the many reasons why Pro Sports teams invest in eSports, English Premier League team Tottenham Hotspurs are taking it a step further and providing revenue estimates against eSports events at their new stadium.

According to English media outlet The Sun, Tottenham is expecting to bring in £3M per eSports event.

As expected....the expectations are a bit high.

Tottenham's New Stadium (Photo: Press Association)

Tottenham's New Stadium (Photo: Press Association)

Tottenham believes they could realistically generate:

  • £2.5M from ticket sales per event based on 50,000 tickets at £30 each and the rest as "corporate seats"
  • Another potential £1.5M per event from sponsorship deals, catering and merchandise sales, and commercial spin-offs

What?

Maybe a few years from now but not in the 2018-2019 season Tottenham. It's that unfortunate reality of math getting in the way:

  • The last League of Legends Championships Finals were held at the Staples Center in LA and sold out at 20,000 seats. How will Tottenham attract 50,000 fans along with corporate seats...with what event and game?
  • £1.5M per event from sponsorship, catering and merchandise is reasonable...if they can somehow sell 50,000 tickets and attract several hundred thousand Average Concurrent Viewers.

 

Outside of the rose colored projections, the upside is that traditional sports across the world are looking at eSports for marketing and monetization.

11 Of The 17 NBA 2K eLeague Teams Have Made eSports Investments

11 OF THE 17 NBA 2K ELEAGUE TEAMS HAVE MADE ESPORTS INVESTMENTS

NBA Commissioner Adam Silver and Take Two CEO Strauss Zelnick Announce NBA 2K eLeague (Photo: NBA/Take Two)

NBA Commissioner Adam Silver and Take Two CEO Strauss Zelnick Announce NBA 2K eLeague (Photo: NBA/Take Two)

TNL Infographic 035: 17 Teams In NBA 2K's eLeague (Infographic: The Next Level/Jordan Fragen)

TNL Infographic 035: 17 Teams In NBA 2K's eLeague (Infographic: The Next Level/Jordan Fragen)

What’s interesting – any maybe not surprising – is that 11 of the 17 teams have previously been linked to eSports investment:

TEAMS WITH PREVIOUS ESPORTS INVESTMENT

  • Boston Celtics
  • Cleveland Cavaliers
  • Dallas Mavericks
  • Golden State Warriors
  • Memphis Grizzlies
  • Miami Heat
  • Milwaukee Bucks
  • New York Knicks
  • Philadelphia 76ers
  • Sacramento Kings
  • Washington Wizards

TEAMS WITH NO ESPORTS INVESTMENT

    • Orlando Magic*
    • Detroit Pistons
    • Indiana Pacers
    • Portland Trail Blazers
    • Toronto Raptors
    • Utah Jazz

    (Shaq, who is a Co-owner of NRG eSports, played for the Orlando Magic)

    Here’s how it breaks down:

     

    /01 SACRAMENTO KINGS

    • ANDY MILLER AND MIKE MASTROV, CO-OWNERS OF THE KINGS
    • CO-FOUNDERS OF NRG ESPORTS

    NRG have been one of the most involved teams in eSports sporting teams or athletes in ~10 games, recently signed an innovative deal with Washington DC’s Convention and Sports Authority and their new Golden1 Center was equipped with the best technology to support eSports events which is lacking in many venues today.

     

    /02 PHILADELPHIA 76'ERS

    The 76’ers have been one of the most innovative teams in the NBA, signing the 1st uniform Brand sponsorship with Stubhub, YYYYY VR and made a big splash by investing in not just 1, but 2 eSports teams.

     

    /03 BOSTON CELTICS

    • CELTICS FORWARD, JONAS JEREBKO
    • JIM PALLOTTA, RAPTOR GROUP
    • RICK FOX, FOUNDER ECHO FOX

    Celtics forward Jonas Jerebko joined the continued trend of current or former NBA players investing in eSports by buying team Renegades.  Jim Pallotta’s Raptor Group, which owns the Boston Celtics, invested in top eSports team Fnatic in their latest $7M funding found.  Ex-Celtic Rick Fox is also the founder of active eSports team Echo Fox.

     

    /04 MIAMI HEAT

    The Miami Heat acquired a controlling stake in team Misfits and became the 2nd team after the 76’ers to fully integrate the team with their traditional team.  What that means is that that all business operations – sponsorships, merchandise, marketing, etc. – will be handled by the Pro team’s front office which has the experience and manpower to make non-prize money revenue much bigger

     

    /05 GOLDEN STATE WARRIORS

    • VIA AXIOMATIC INVESTMENT IN TEAM LIQUID
    • PETER GUBER, EXECUTIVE CHAIRMAN OF THE WARRIORS
    • CHAMATH PALIHAPITIYA, CO-OWNER OF THE WARRIORS

    The Warriors have invested in 2 separate ways: Peter Guber, Co-Executive Chairman of the Warriors, is part of axiomatic, the super group of investors which bought eSports group Team Liquid.  Warriors Co-Owner Chamath Palihapitiya was also part of a group which invested in eSports team Cloud 9.

     

    /06 CLEVELAND CAVALIERS

    • DAN GILBERT, OWNER OF THE CAVALIERS
    • ANDREW BOGUT, EX-CAVALIER

    While not directly through the Cavaliers, via Dan Gilbert’s sports/tech investment fund Courtside Ventures, had invested in Beam, a live-streaming service which was acquired by Microsoft. Ex-Cavalier Andrew Bogut – who also played for the Warriors and Bucks - was involved in the Cloud 9 investment.

     

    /07 MILWAUKEE BUCKS

    • WESLEY EDENS, CO-OWNER OF THE BUCKS

    Bought the League of Legends Challenger Slot and the contracts of 4 players from Cloud 9 for $2.5M.

     

    /08 WASHINGTON WIZARDS

    • VIA AXIOMATIC INVESTMENT IN TEAM LIQUID
    • MONUMENTAL SPORTS, OWNERS OF THE WIZARDS

    Monumental Sports, who owns the Washington Wizards and many other sports franchises, is part of the axiomatic group which invested in Team Liquid.

     

    /09 MEMPHIS GRIZZLIES

    • STEPHEN KAPLAN, CO-OWNER OF THE GRIZZLIES

    Grizzlies Co-Owner Stephen Kaplan invests in eSports team Immortals.

     

    /10 DALLAS MAVERICKS

    • MARK CUBAN, OWNER OF THE MAVERICS

    In the past year or so, Mavericks owner Mark Cuban has invested in both Unikrn, which is an eSports wagering service and Sportsradar, a sports data services company which services eSports as well.

     

    11/ NY KNICKS

    • CARMELO ANTHONY, FORWARD FOR THE KNICKS

    Melo invested in eSports Daily Fantasy site Alphadraft – along with former NBA commissioner David Stern – which was acquired by Fanduel in 2015.

     

    Here’s the timeline of NBA team investments to date:

    TNL Infographic 027: NBA Team eSports Investment ((Infographic: The Next Level/Jordan Fragen)

    TNL Infographic 027: NBA Team eSports Investment ((Infographic: The Next Level/Jordan Fragen)

    In addition, a few other things stand out:

    • While the teams not participating weren’t that surprising, the biggest question is why one of the teams’ most involved in eSports did not participate: the Houston Rockets.

    GM Daryl Morey is intimately familiar with eSports having been on the board of Major League Gaming and believes the industry currently resembles “basketball in the 1950’s”.  Further, the Rockets were the first US Pro team to hire a Director of eSports Development.

     

     

    • Still no further details on the league structure, player payments, drafts, etc. – however that’s fairly quick progress considering the league was only announced a few months ago.

     

    PREVIOUS PODCASTS ON THE NBA AND ESPORTS

    TNL PODCAST LIST

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    TuneIn

     

    Now which US Pro Sports League will follow a similar structure next?

    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.