Prospective Investors Keeping Close Tabs On Esports Team Valuations Across Leagues
As esports continues to grow in popularity, prospective investors are keeping an eye on team valuations that can be vastly different across teams and leagues, said panelists at the inaugural Lagardere Sports esports Rising conference. Inner Circle Sports Associate Dylan Glendinning said many investors are still trying to understand what esports is, and see buying a team now as an “easy way to get into it.” Glendinning: “The reason why you could argue the valuations make sense is because you view the teams as a way to participate in the rising tide of the esports ecosystem. As esports evolve and new games come out, even if we move toward games that are AR and VR, there are going to be competitions around those ecosystems and teams -- the bigger brands especially -- can put together a group of players and apply their brand to that ecosystem.” O’Melveny & Myers Partner Irwin Raij said potential buyers will assess the risks in buying an esports franchise, but at this point and price entry, few risks exist. “There’s a lot of room to grow,” Raij said. “Right now, in terms of trying to identify a risk, what’s a team that’s failed? There aren’t a lot of them. There’s a really interesting ecosystem with this that’s evolving.” Raij said one angle investors could take, rather than buying in on the team level, is to “go the publisher route. It’s a really interesting market.”
DIFFERENT STROKES: Catalyst Sports & Media Exec VP/Esports Avi Bhuiyan said while many stick and ball sports teams might mirror one another in business models or the way they operate, esports teams tend to do things very differently from one another. He noted Optic Gaming as an example. The franchise has a competitive esports team, but its “anchor asset is their media company,” as they produce YouTube content and have social metrics “off the chart.” Bhuiyan: “They don’t think of themselves as a professional sports team. Up to this point they’ve sort of made their bonds as a media company that participates in competitions.” Bhuiyan noted the franchise Solo Mid is also competitive as an esports team in LoL, but also has a “network of gaming websites” that newcomers to esports can go to for advice on how to play the game. Bhuiyan: “The teams are very different, but there are a lot of ways to win.”
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