Heat, Bucks owner take different paths to esports stakes
Proving there’s no blueprint yet for investing in esports, the Miami Heat and Milwaukee Bucks owner Wes Edens both announced acquisitions last week with starkly different models.
The Heat bought a minority share of Miami-based esports franchise Misfits, and will fully integrate the property into its operations. The Heat’s marketing, merchandising and production teams are already helping Misfits, releasing a new logo that changes the Misfits’ orange lettering to Heat red and adopts the Heat’s stylized “t” in their wordmark.
On the other hand, Edens purchased an existing League of Legends team from Cloud9 and has rebranded it FlyQuest. In a statement, FlyQuest said Edens would bring his sports business resources to bear on the team, but the statement was otherwise vague on details. The new team will begin play Jan. 20 in Riot Games’ League of Legends spring tournament.
Also last week, movie studio Lionsgate joined the investment group behind Immortals, a team backed by a coalition of investors that includes Memphis Grizzlies co-owner Stephen Kaplan.
The Misfits franchise, formed in June 2016 by Miami native Ben Spoont, has grown rapidly but is in need of expertise as the esports world approaches an inflection point.
“Now, you have a little more fragmented of an ecosystem than I think you will see develop in the next 12 to 36 months,” Spoont said. “And when that fragmentation subsides, having partners like [Executive Vice President] Michael [McCullough] and the other execs at the Heat on our side to help us navigate those waters will help us make smart competitive and financial decisions.”
McCollough said the Heat didn’t think it was necessary to acquire a controlling stake to benefit from esports. “We think Ben has done a fantastic job of creating this Misfits brand up to this point, and we don’t have that expertise,” he said. “We do have expertise in a lot of other areas, and we’ll bring to bear what we’re good at.”
The Heat’s model is most comparable to the Philadelphia 76ers’ acquisition of Team Apex and Dignitas in September and the subsequent merging of those two teams. In that case, the Sixers teamed up with NextEquity to buy the teams but also hired a new CEO to oversee the division.
Edens’ deal is most similar to aXiomatic, the new investment vehicle created by Ted Leonsis, Peter Guber and others to acquire and control Team Liquid.