Permanent franchises in esports leagues create investor-friendly certainty and unlock new revenue streams, but they cannot be seen as a solution for all video games, said panelists at the Lagardere Sports esports Rising conference. Catalyst Sports & Media Exec VP/esports Avi Bhuiyan said “The number of games that this can work for is vanishingly small. It’s a specialized, premium solution.” The appeal is obvious. Overwatch League and the League of Legends North America Championship Series have both sold franchises in the last two years, and the teams that secured those slots are generally the most valuable esports organizations in the world. “In the best form, the franchise leagues provide scarcity of the asset, which allow for increased valuation,” said ReKTGlobal co-Founder CEO Dave Bialek, whose group owns the team organization Rogue. ESG Law associate Harris Peskin, an adviser to many top esports teams, said franchises do for esports what they did for the Islanders, which lost $20M annually under the ownership of the late Charles Wang but still more than tripled in value under his ownership.
WHEN IS A TEAM WORTH PURSUING? Games have to have a large and sustainable enough audience for teams to believe a franchise spot is worth pursuing -- and there’s a difference between a hit video game and a sustainable competitive scene. Some games, such as the H1Z1 battle royale title, created franchise spots and hoped that elite teams would bring fans to their game, which had not yet withstood the test of time. “There’s not a ton of esports teams that can come to an unpopular, or low-ceiling game, and bring their fans with them,” Bhuiyan said. “The idea that you can do that is at odds with reality and any data I’ve seen.” NA LCS Senior Manager, Commissioner & Head of League Operations Chris Greeley said Riot Games brought in OpTic Gaming, a team whose history is outside of League of Legends, not because Riot thought OpTic would transport fans, but because the company had a track record of building viable new teams from scratch. “They’re more of a constructor than a transferer of fans, and that turned out to be a compelling point for us,” Greeley said.
