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Will esports deliver on the lofty expectations?

Are you buying, selling, shorting or holding on esports?
I’m not a player, a follower or in the target demographic, but there is so much interest in esports that I am trying to understand it better. Enough smart people are asking about it and craving information, so it has become a greater part of our editorial coverage across our news products and conferences. But I can’t tell whether it’s the early days of the XFL, the Gorge Games or poker, or the next wave of “Madden NFL.” I can’t say if it’s a significant threat to the business model of traditional sports because esports is so different. It’s not apples to apples.

I view this as a niche competition, and I’m struggling to call it sport — it’s a skill, no question. I also think long and hard about whether games of war and battle belong in a sports business trade publication. But segments of the industry are getting behind it, and that’s why I found what longtime sponsorship executive Matt Kauffman said at our recent Intersport Brand Engagement Summit in Chicago so interesting. Kauffman, a former Visa marketer who is now at Intel, was asked about sponsorship of esports, and he offered a subtle yet powerfully positive endorsement.

“Really probe into these platforms,” he said, “because there are so many. You have to look at the numbers. They’re not all going to survive. They’re going to morph. But the other thing I would say is you’ve got to get in. You’ve got to place your bets. The numbers are too big, and some of these are certainly going to evolve into major platforms.”

Yes, he repeated a refrain heard from many top marketers: YOU’VE GOT TO GET IN. YOU’VE GOT TO PLACE YOUR BETS. Maybe not surprising for a technology marketer to look at this space so bullishly and not as a fad, but this is someone who is pitched on every sports and entertainment platform being developed. So that struck me — a major marketer willing to shift budgets from other expenditures to fund esports.

Matt Wolf, Coca-Cola vice president of entertainment, ventures and strategic alliances, is seen as one of the early evangelists of the space. He’s been preaching patience, yet promise, as the global brand is largely behind publishers like Riot Games. “It’s a baby still,” Wolf said in Chicago. “It’s embryonic. When this thing matures over time, I think you’ll start to see some more parallels to what you’re used to in traditional sports, but not entirely.” Again, not apples to apples with traditional sports.

A number that was thrown around breathlessly in Chicago was “500,000 viewers” — the average number of viewers that TBS had during the prime-time portion of its inaugural ELeague telecast from 10 to 11 p.m. ET May 27. There were touts that it drew “more than MLS!” “More than NHL!” I cautioned against those comparisons, because, yes, while that one-hour prime-time window on a fully distributed network was higher than the average audience of roughly 280,000 for an MLS game on ESPN on Sunday afternoon or the 380,000 average for a nonexclusive NHL game on NBC Sports Network, it’s still one episode, over one hour. It’s a good number for Turner, and I’m sure it and partner WME-IMG are thrilled. But let’s see how this develops.

This is a long way of saying that I’m on the fence about esports’ potential as a mainstream sports and entertainment property. Esports is the new toy, even though gaming, like Major League Gaming, has been around for decades. People love the new toy, and first movers are eager to crown it the new king. But count me among those willing to wait before declaring it the next big thing.

CME Group CEO Terry Duffy says listening is one of the most important skills for an executive.
Photo by: DAVID DUROCHIK PHOTOGRAPHY
> CULTURE CLUB: Is corporate culture overblown? That is contrarian thinking, and it came out of an interesting discussion at the recent Brand Engagement Summit. CME Group CEO Terry Duffy, head of the world’s largest futures exchange, was interviewed by Intersport CEO Charlie Besser. A Chicago native, Duffy has a brusque, no-nonsense approach, and didn’t mince or waste words, especially when asked by Besser about building a corporate culture.

“The culture aspect of most firms is way overblown,” he said. “Most firms and most human resources departments will probably hate to hear me talk about it. The culture changes along with the technology, along with the years. Culture is fine — to say that this is what we do. But at the same time, when your legal obligation is [as] a fiduciary to the people who own you, that’s your culture. Your culture is to make them more money; that’s why they own you. As far as we go, we’re a very high-paying company. To me, that’s what your rewards are. … [With] most culture, people are out for themselves, and there’s no reason why they shouldn’t be. What the culture should be is to do the right thing when no one else is looking. If you do that, you can work for me any day of the week, because that’s what I like. I like when people do the right thing. That, to me, is what’s good culture.”

Besser asked a follow-up about the most important life lessons Duffy has learned along the way in his career. “When you can have the attribute to listen, you’ll learn more,” he said. “That’s how you become more intelligent in understanding what you do and others do is listen first. … That’s a life lesson I’ve learned: Listen and to move forward.” He also stressed problem solving. “One of the other things I like to do is I never ask anybody for a favor,” he said. “I like to come in with solutions, not problems. Everybody’s got problems. … How do I fix their problem which also benefits what I’m doing for a living, too, in my business? That’s a lesson I like to pass on to people. Don’t bring your problems to other people; solve their problems, which will get you much further ahead.”

Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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