Why The 76ers Bought Two eSports Teams For Millions

Why The 76ers Bought Two eSports Teams For Millions

Why The 76ers Bought Two eSports Teams For Millions (Photo: Team Dignitas)

TNL Take: The traditional Sports Team invasion of eSports has finally launched in the US.

The Philadelphia 76ers announced the acquisition of not one but two eSports teams, Dignitas and Apex, with a merger into Team Dignitas.

Let’s take a closer look into the deal and how this actually benefits the 76ers and their expanding Sports empire.

/01 WHO ARE THE 76ERS BUYING?

Team Dignitas (Photo: Team Dignitas)

Team Dignitas (Photo: Team Dignitas)

Dignitas was one of the earliest eSports Teams having formed back in 2003 with the merger of two Battlefield teams by Michael O’ Dell and David Slan. The combined Dignitas/Apex will field teams in League of Legends, Counter-Strike, Overwatch, Heroes of the Storm and SMITE.

In the ever shifting eSports landscape, Dignitas was recently relegated and then "gifted" their Challenger slot to Apex.  The larger LCS slot is what cost FC Schalke 04 and Sacramento Kings’s co-owners Mark Mastrov and Andy Miller’s eSports team NRG $1M each when both teams bought slots earlier this year.

 

/02 WHAT ARE THE 76ERS GETTING?

Dignitas League of Legends Team (Photo: Team Dignitas)

Outside of the ownership of both teams and the League of Legends slot, the 76ers are also getting eSports and Gaming experience.

Michael O’Dell will lead the newly merged Team Dignitas team operations as President and Michael Slan, will be the Vice President and General Manager of the new team.  

Even more impressive, Gaming Industry veteran Greg Richardson will serve as Chairman of the new team. Greg has a long background in Gaming, having founded developer Rumble Entertainment, a partner at Elevation Partners, a private equity fund focused on digital media and Executive roles at BioWare, EA and Eidos.

 

/03 WHY ARE THE 76ERS DOING THIS?

This would require a much longer analysis but Ill cover the two big points.

Over the past few years, Harris and Blitzer have bought seven Sports franchises, including the 76ers, New Jersey Devils, English Premier League team Crystal Palace and the Prudential Center.

So acquiring an eSports team from just a potential Marketing and Event perspective makes sense.

I pointed out in my first analysis in The Next Level 006 “Traditional Sports Invade eSports”, that there is a huge opportunity in eSports merchandise.

Michael Rubin, owner of Fanatics, the largest US online Sports Merchandise retailer, is a minority partner of the 76ers and is part of this deal.

See it now?

Finally, look deeper into the quotes from the Executive team:

“We intend to build a fan-first team that aspires for excellence in all aspects of the business from attracting premier playing talent to building out merchandising, sponsorships and broadcast rights,” said Greg Richardson, Chairman of Team Dignitas.

"There's no denying the fact that esports presents corporate America with a way to reach millennials in a way stick and ball sports just isn't," said Scott O’ Neil, CEO of the 76ers and New Jersey Devils.

 

/04 WHAT DID THE 76ERS PAYS?

This is the biggest question of all.

From ESPN: Terms were not disclosed, but more established esports team brands have been offered in the marketplace at valuations between $5 million and $15 million.

This is definitely on point as eSports Team valuations have skyrocketed.  

My estimation is that the deal was on the lower end between $5M - $10M.

 

/05 WHO IS GOING TO BE NEXT?

Back in May in The Next Level 006, I predicted five Sports personalities who would invest in eSports

There will be an update to "Traditional Sports Invading eSports" but here are are the three US Pro Teams that I believe will make the next eSports investment:

  • San Francisco 49ers
  • Miami Dolphins
  • LA Dodgers