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Volume 22 No. 35
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Owners say esports lessons transfer to traditional sports

Traditional sports team owners say they are seeing crossover benefits from investing in esports, applying lessons they learn from one realm to the other.

Team owners from every major sport in the U.S. have entered competitive gaming in recent years, largely with franchised leagues owned by Activision Blizzard and Riot Games. Families from traditional sports that are involved in esports ownership range from the likes of the Wilpons (New York Mets) to the Aquilinis (Vancouver Canucks) and the Krafts (New England Patriots).

There have been some suggestions raised over the last year that franchised esports teams in the U.S. are proving harder to make profitable than anticipated. Dallas Mavericks owner Mark Cuban took that conversation to a more public level last month when he made national headlines by calling esports ownership in the U.S. an “awful business” in an interview with Fox Sports.

But to the contrary of Cuban, companies such as Monumental Sports & Entertainment and Comcast Spectacor say they’re still confident their investments will pay off.

“We’re incredibly happy investors,” said Zach Leonsis, whose family invested in well-noted esports organization Team Liquid. “What people sometimes forget or fail to realize is traditional leagues like the NHL and NBA are close to 100 years old; these are incredibly established brands and organizations — and really we are in the top or bottom of the first inning for esports.”

Comcast Spectacor is a partner in the T1 esports joint venture in South Korea’s regional League of Legends series.
Photo: getty images

Leonsis said what made his family and Monumental want to get into esports is the realization that a significant percentage of esports fans weren’t following the traditional sports leagues in which they’re invested. Leonsis said a particular eye-opener for him was when he went to the E3 video game conference a couple years ago, and was told “no” when he asked several people there if they were following the NBA Finals.

In late 2016, Monumental acquired a controlling interest in Team Liquid alongside Golden State Warriors co-owner Peter Guber. Team Liquid is one of the longest running and most successful teams in esports history, having been around since the turn of the millennium and now having won the North American League Championship Series four years in a row.

Similar to Monumental, Comcast Spectacor saw the desirable demographics of the esports fan base, according to Dave Scott, the company’s chairman and CEO. Comcast owns both the Philadelphia Fusion of the Overwatch League and is a joint partner in the T1 Entertainment and Sports esports organization that competes in South Korea’s regional League of Legends series.

“We are excited about the steps we’ve taken and remain bullish about the future of esports,” Scott wrote in an email. “The Philadelphia Fusion has outperformed our initial financial model in every major category through two seasons. We have now expanded into League of Legends, the South Korean esports market and multiple gaming segments via our T1 joint venture. … [And] Fusion Arena, our 3,500-seat purpose-built esports venue that broke ground in September, is going to be a game changer.”

Other traditional sports investors involved in esports include Jeff Vinik, Stan Kroenke, Mark Ein, Micky Arison and the Rooney family.

One of the benefits of dual ownership across traditional sports and esports is the ability to transfer best practices between the various entities owned by investors. Taking a lesson from esports, Leonsis pointed out that Monumental’s traditional sports teams like the Capitals have started leveraging the Twitch streaming platform more by setting up channels to showcase players who are avid gamers. Likewise, Monumental helped Team Liquid design and build a new training facility with the knowledge it has from traditional sports.

Traditional sports investors also can leverage their formidable connections to help their esports teams. For example, Team Liquid’s ownership group helped get the organization in touch with Marvel Studios, which eventually produced a co-branded “Avengers” jersey line with Liquid.

In terms of the transfer of know-how between Comcast Spectacor’s traditional and esports properties, Scott indicated the company’s increasing focus on younger demographics helped shape the $265 million renovation of Wells Fargo Center. He also wrote that esports has made Comcast think more globally with the Flyers. He noted that the team opened the season in Prague for the NHL’s Global Series, and “as recently as five years ago, the concept of trading a home game for an opportunity to build and strengthen our fan base in Europe may not have worked.”

The Flyers also are working on a dual-ticket option with the Fusion, and the team has had popular mascot Gritty lead the Fusion out of a tunnel during pregame introductions and attend watch parties and the Overwatch League Grand Finals at Wells Fargo Center in October.

Now that team owners have started to watch their investments mature over a couple seasons, they’ll be looking to start turning a profit in the near future.

“It’s still early days — people want instant gratification, and I wouldn’t say it’s a challenge [trying to turn a profit in esports] — it something we’re excited to see play out,” Leonsis said. “For us, it’s the opportunity to engage with a new audience that we likely wouldn’t have had the chance to [engage with] otherwise.”

For more coverage of the business of esports, visit our partners, esportsobserver.com.