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SBJ Esports: Riot May Seek Exclusive English-Language Media Deal


"How do esports teams make money?" That's the No. 1 question we hear from those outside the space. Something new to that end that multiple teams are rolling out -- paid membership programs. Cloud9, Team Liquid and Envy have all announced programs aimed at giving additional value to their most passionate fans. We know that gamers will subscribe to support and engage with their favorite influencers, and perhaps these teams can tap into that desire with a similar strategy.

-- Trent Murray

 

RIOT IN TALKS FOR EXCLUSIVE LoL MEDIA RIGHTS DEAL

  • Riot Games is in discussions to sell an exclusive English-language media-rights deal for League of Legends esports, SBJ’s Adam Stern reports, in what would be a major move for the game publisher that has often focused on a non-exclusive streaming strategy.

  • The company currently airs the three major LoL global events, plus its North American series, on multiple streaming platforms like Twitch and YouTube. However, Riot has entered into an exclusive deal in China with streaming platform BiliBili.
  • Riot confirmed to SBJ that it is currently exploring an exclusive English-language deal (first reported by esports journalist Travis Gafford). "We are evaluating a number of options for our various rights packages,” the company said. “For example, in 2019, we signed an exclusive deal for the Mandarin broadcast of the League of Legends World Championship with BiliBili, which later sublicensed those rights to several other major streaming platforms in China.”
  • The interested players are not known yet, but given that LoL is the most-watched esport, Riot is likely to only align with major entities. There have been increasing entrants into the streaming space in recent years, but Twitch and YouTube remain dominant forces. Upstarts like Mixer from Microsoft have either found little traction or shut down.
  • Media rights is currently the second biggest bucket for annual revenue in esports, according to Newzoo, with $163.3 million expected globally this year, up 3.3% from last year. Rival publisher Activision Blizzard signed an exclusive, three-year, $160 million deal with YouTube that started this year.

 

 

PETITTI HITS THE GROUND RUNNING AT ACTIVISION BLIZZARD

  • New Activision Blizzard Esports hire Tony Petitti has gotten to work behind the scenes, getting close with team owners and working with them on a range of initiatives, sources tell SBJ's Adam Stern.

  • Petitti was poached from his senior position at MLB by Activision Blizzard CEO Bobby Kotick in August to become president of sport & entertainment, overseeing esports, consumer products, film and TV. Since then, Activision has said nothing publicly about Petitti’s new role and he hasn't done interviews.
  • However, sources say that Petitti has been very active in getting to know and work with team owners in the Call of Duty League and Overwatch League. Those sources said that he has been working on everything from revenue generation to league structure/schedule and certain aspects of Activision’s media relationships, which include its exclusive streaming deal with YouTube.

  • Two sources said that Petitti has been getting things done at an impressive clip, including quickly green-lighting one project that had been on the back burner for more than a year. Petitti came in just before former Activision Blizzard Esports President & CEO Pete Vlastelica departed, but it’s unclear whether they had the same autonomy to make decisions for the esports division.
  • The development is welcome news for franchise owners, who are looking for Activision to partner with them as they try to turn a profit from their pricey investments to get into the OWL or CDL. OWL franchise fees went for around $20 million, while CDL franchise went for around $25 million. Activision declined to comment on the record.

 

ESPN SHIFTS APPROACH WITH ESPORTS COVERAGE

  • ESPN will shutter its dedicated esports vertical, The Esports Observer's Kevin Hitt confirms. Rumors of a major shift in terms of how ESPN will cover esports have been circulating for weeks. A company spokesperson tells TEO: “We recognize esports as an opportunity to expand our audience, and we’ll continue to do so through coverage from the broader team for major events, breaking news and coverage.”

  • The move to cease the vertical is directly related to layoffs announced last Thursday at ESPN. Esports writers Tyler Erzberger and Emily Rand announced their departures on Twitter, as did editor Sean Morrison and video producer Thomas Tischio. Writer Jacob Wolf last week said he would not be returning after his contract expired in January and senior editor Darin Kwilinski abruptly announced his resignation last week.

  • ESPN still has licensing agreements for various games like NBA 2K, F1 Esports and others that will see the company produce and broadcast esports competition.

 

PLAYFLY REBRANDS CSL TO INCREASE FOCUS ON ACADEMICS

  • Playfly will combine the assets of its recently acquired esports properties WorldGaming Network and Collegiate StarLeague, TEO's Trent Murray reports. The company will sunset the WorldGaming Network brand, and with it Playfly’s efforts in the amateur esports space. The newly combined resources of these two assets will form CSL Esports.
  • CSL has worked with more than 1,800 schools across North America. Now, new CSL Esports CEO Rob Johnson says the company aims to create “life-changing educational opportunities through esports.” In addition to operating its own tournaments, CSL Esports will shift its focus to provide infrastructure to colleges, universities and high schools looking to build out an esports system.
  • Johnson explained that part of CSL’s vision is to create a “path to pro” for collegiate esports -- but not in the traditional sense. While some players are recruited from college teams to join pro esports rosters, it is not the most common path. The reality is that much of the high-profile talent are in the 16-18 year-old demo and can circumvent the college track. 
  • Instead, CSL will equip students to join the esports workforce, whether that’s playing on a team or working behind the scenes. A robust collegiate esports infrastructure will allow students to learn about remote stream broadcasting, commentary, event management, training, etc. Additionally, CSL will work with schools and with its parent company to create revenue-generating opportunities for its clients, such as connecting them with brands looking to engage with the collegiate esports market or exploring esports opportunities for alumni.

 

In addition to operating tournaments, CSL Esports will shift its focus to provide infrastructure to colleges


 

FNATIC RAISES $10 MILLION, PLANS CROWDFUNDING CAMPAIGN

  • London-based organization Fnatic raised a $10 million internal financing round led by venture and growth capital investor Beringea. The organization plans to use the investment proceeds, which brought its total funds raised to more than $35 million, to continue growing the brand and fanbase. Fnatic fields teams in games like League of Legends, Counter-Strike: Global Offensive, Rainbow Six Siege, Dota 2, FIFA, Fortnite and PUBG Mobile.
  • Later this month, Fnatic will launch a crowd equity campaign to raise at least $1.3 million from dedicated fans and supporters. The campaign will enable fans to become minority owners starting at a $26.50 stake. The organization stated that the funds raised through this campaign will be allocated to its efforts in finding and growing young gaming talents.

  • Fnatic Chair Lucien Boyer tells TEO's Tobias Seck that the concept is similar to club membership programs in traditional sports, especially in Europe. He added that Fnatic is not just looking for capital going towards youth development, but also a group of passionate supporters who are eager to contribute by sharing their opinion on matters or helping in product development through beta testing.

 

 SPEED READS

  • Canadian esports and media company Enthusiast Gaming is preparing for an expansion into the U.S., revealing this week its intention to be listed on NASDAQ, writes TEO's James Fudge. Enthusiast operates entities like Luminosity Gaming, the Vancouver Titans (OWL) and Seattle Surge (CDL). The company, already listed on the Toronto Stock Exchange, hopes that a NASDAQ listing will help raise its profile and create more acquisition opportunities, investments and better access to American investors.
  • DarkZero Esports, an organization that currently competes in Rainbow Six Siege esports, but is looking at expanding to new titles, named Tommy Padula head of partnerships. Padula has had stints at Madison Square Garden and MGM Resorts.
  • Riot Games has secured a partnership deal with personal finance company SoFi that will be focused on supporting local League of Legends talent development in North America. The company will provide $250 investment accounts to all players participating in the Honda Scouting Grounds -- a combine-style event that allows teams to scout rising talent in the region.
  • Brazil-based esports organization FURIA is building up a poker lineup after announcing a sponsorship by PokerStars, TEO's Victor Frascarelli reports. Initially signing poker players who will stream their games under FURIA’s banner, a competitive team is also underway to enter face-to-face and online tournaments.

 

 

     

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    Something on the esports beat catch your eye? Tell us about it. Reach out to either Adam Stern (astern@sportsbusinessjournal.com), Trent Murray (trent@esportsobserver.com), Kevin Hitt (kevin@esportsobserver.com) or David Morgan (dmorgan@sportsbusinessdaily.com) and we'll share the best of it. Also contributing to this newsletter is Austin Karp (akarp@sportsbusinessdaily.com).