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Group’s effort to structure esports draws fire

As the movies taught us, anyone trying to tame the wild west is bound to make a few enemies. On the other hand, brand marketers and investors love tame.

European esports tournament organizer ESL is navigating that dicey terrain after launching the World eSports Association, an attempt to woo sponsors to the sport with more structure. Executives bill it as the first step toward uniform regulations and scheduling across all competitions.

But the WESA ran into a buzz saw of critics within the video gaming community, who saw something more nefarious at play: An attempt to carve out an exclusive sphere of influence in the rapidly growing industry, projected by market research shop Newzoo to reach $463 million in revenue by December, while claiming to act in the greater good.

The critics mostly say ESL exerts too much control over the new association. Also, some critics think the revenue-sharing structure with member teams could lead to conflicts of interest when they decide to admit new members, sanction unaffiliated competitions and decide in which leagues to participate.

ESL is the only tournament operator involved, and its executives hold two of the four spots on WESA’s executive board; ties are broken by interim commissioner Pietro Fringuelli, a partner at the German law firm CMS Hasche Sigle, but his powers are otherwise limited.

No rival tournament organizers would criticize ESL publicly, but several — including ELeague and Major League Gaming — confirmed that they had not been invited. Several experts said they saw little incentive for competitors to join.

After responding to some complaints on a Reddit forum earlier, ESL declined interview requests for this article, but did make Fnatic CEO Wouter Sleijffers available to speak on behalf of WESA. Fnatic is one of the eight European member teams that received a cash advance on future WESA revenue shares upon joining.

Sleijffers said the association intentionally chose to start with a smaller group and then grow, believing an all-inclusive startup would be unwieldy. He asked for time to prove WESA’s intentions. Also, he said, member teams were equal partners with ESL in setting up the organization before launch, behind the scenes.

“Yes, we wanted to be inclusive, and yes, we are thinking about how we can best extend to other organizers,” Sleijffers said. “And yes, we want other teams to participate, but we’ve chosen a path to start small, and to put something meaningful forward that hopefully will prove itself over time.”

The first tournament to be operated under WESA sanctions, thereby generating revenue for the association, will be ESL’s own “Counter-Strike: Global Offensive” pro series. There are at least five other companies operating “CS:GO” tournaments with the approval of game publisher Valve Software.

The members are free to participate in other leagues, if they collectively agree. Prior to launch, all eight had committed to ELeague, which launches Tuesday, and financially they stand to benefit from maintaining a heavy competition schedule.

Nevertheless, the revenue sharing, along with scheduling priority, gives teams an incentive to prioritize ESL tournaments, founder and WESA board member Ralf Reichert said in a pre-launch interview.

Most of the esports world recognizes the virtue of more structure and order, but the question of ultimately who exerts that structure is paramount. At some point along the line, every established sport’s individual entrepreneurs had to relinquish some autonomy to create bankable leagues.

“Everyone enjoys growth when there’s not a lot of structure, and when there are structures, some feel that will limit their growth,” said Dave Rosenberg, chief strategic officer for GMR Marketing, whose esports practice represents Microsoft and Comcast. “I actually believe the opposite. This structure will bring in revenue from sponsors who need to see some structure.”

WESA should be given a chance to expand its membership, he said. “If we come back in six to 12 months and there’s been no changes, then I think the scrutiny needs to come down on them,” Rosenberg said. “But we have to give them a bit of time.”

Tobias Sherman, global head of esports at WME-IMG and a leading force behind ELeague, said any association that creates financial ties between players, teams and league organizers is fundamentally flawed. “To have something that is successful, the teams need an independent body solely for themselves, and the players need one as well.”

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