SBJ Esports: ESL-DreamHack Merger Creates New Power Player

The League of Legends World Championships has traditionally been dominated by teams from Asia or Western Europe, but there’s been a couple of upsets in the play-in rounds that started this week that give hope to other regions.

Perhaps most notably, Latin American team Rainbow 7 pulled off a shock when they beat Chinese team LGD Gaming.

Results like these will give teams from the less prestigious regions reason to believe that they can have more success in the ultra-competitive LoL in the future.

-- Adam Stern

ESL AND DEAMHACK TO MERGE; BRANDS WILL REMAIN INTACT

• Global tournament organizers ESL and DreamHack, sister companies under Modern Times Group, will merge their operations into a single entity under the name ESL Gaming, reports TEO's Trent Murray. This merger brings together two of the largest third-party tournament brands in the industry. The new structure also brings with it a new leadership system to be led by Co-CEOs Craig Levine and Ralf Reichert (previously Co-CEOs of ESL). Former DreamHack President & CEO Marcus Lindmark will take the role of President and DreamHack Senior VP, overseeing project and event operations.
  
  
• Lindmark told SBJ that he expects to "bring DreamHack to the next level and continue to build out the biggest esport, gaming and lifestyle festival there is."
  
  
• While the companies and their leadership structures have merged, their brands will remain independent, with their tournament and festival products such as ESL One New York and DreamHack Winter retaining their established names.
  
  
• "I’m surprised that it actually took this long considering they both have complementary business models,” industry analyst Manny Anekal told SBJ. Anekal noted that the merger also allows for increased opportunity for brand reach with partnerships in addition to joint media rights deals. “ESL and Dreamhack have jointly sold media rights previously and it will be interesting to see if they can capitalize on that further.”
  
  
• Gamers.Vote COO Robb Chiarini said he is "excited for this announcement and direction" as a long-time partner of both ESL and DreamHack. Chiarini: "From an operational perspective, the merging of resources makes tremendous sense. It provides synergies across financial and executional deliverables, both internally as well as extending those same opportunities externally to their partners. The more formalized integration of processes, support and learnings between the two groups will only benefit the community and partners even more in the coming years.”
  
  

CHRIS MANN LEAVES DIGNITAS TO HEAD UP rEVOLUTION'S GAMING DIVISION

• Dignitas executive Chris Mann is leaving the Harris Blitzer-owned organization to join rEvolution, where he will head up the Chicago-based agency’s Rev/XP gaming division, per SBJ's Adam Stern.
  
  
• Mann was with Dignitas for slightly over a year in the role of vice president of partnerships, where he worked with partners like Verizon. He also has prior stops with NRG Esports, Endeavor and Genesco Sports Enterprises. At Rev/XP, Mann will be responsible for both leading work with current clients -- including Chipotle -- as well as developing new clients who are in, or getting into, esports sponsorship. 
  
  
• Mann said that one of the things that attracted him to the role is how Rev/XP can leverage all the different aspects of the broader rEvolution agency to service clients, including consulting, creative, event activation, marketing/communications, analytics, influencer advice and media placement. He also noted that rEvolution “is not owned or beholden to any kind of larger holding company, which is different in this space and avoids a lot of the conflicts of interest.” rEvolution will announce the move later today.
  
  
• “My goal is to deepen our relationship with Chipotle first and foremost and help them strategically as they continue to be successful in gaming,” Mann said. “But there’s additionally a whole roster of exciting (prospective) clients and conversations to be had -- a lot of brands want to be in gaming and esports.”
  
  
• The Chipotle Challenger Series, an open online tournament that also involves celebrity gamers, is one of the QSR’s major plays in esports so far. Chipotle has also dabbled in esports sponsorship with the Call of Duty League. Mann mentioned consumer-packaged goods as a category that he’s particularly keen to find clients in.
  
   

GAMING PLATFORM RIVAL PARTNERS WITH PISTONS; HIRES NEW EXEC VP

• Gaming platform development company Rival is in the news today with a new executive hire plus a client announcement coming this afternoon with the NBA’s Pistons, reports SBJ's Adam Stern.
  
  
• The Pistons are set to announce that it has become the first pro sports organization in the U.S. to partner with Rival in launching a new gaming community for its fans. Using Rival’s back-end, white-label technology, the Pistons will start the Motor City Rivals esports community that will start with an NBA 2K21 Tournament next month. The tournament includes $1,000 in cash prizes, plus the chance to play online versus Pistons guard Bruce Brown, or what the team is touting as “another mystery NBA player.” The tournament will have presenting sponsorship from Gamestar.
  
  
• Meanwhile, Rival has hired ESL Senior VP/Brand Partnerships Paul Brewer to come aboard as executive vice president of global business development. On top of ESL, Brewer has prior stops at ESPN, Turner Broadcasting and Samsung. Rival CMO Dan Parise said a key expertise that Brewer will bring is a “really deep knowledge of how the commercial side of (gaming) really works given his time at ESL.”
  
  
• Brewer noted that this role will allow him to marry his backgrounds in both traditional sports and gaming. He added: “The traditional sports side is trying to get younger and engage with different audiences, and they’re trying to figure it out through gaming and esports and haven’t really done that yet …  (Rival) hits on that white space or empty space for traditional sports teams because of what the product is and what the platform can do to engage traditional sports fans who we know are gamers.”

POPULAR FIFA GAMER MAKES STAND AGAINST "PAY-TO-WIN"

• Each year a new FIFA title releases, it is met with a wave of frustration and criticism from the esports community due to the additional cost of buying player packs in order to field the best team, writes TEO's Trent Murray.
  
  
• To ensure pros are playing with the proper pieces, they’ll need to spend roughly US$2,000. This year, however, Schalke 04 esports player Tim “Tim Latka” Schwartmann decided he’d had enough, announcing in a YouTube video that he would not purchase any player packs this season. Schalke 04 supported the decision.
  
  
• “We already struggled with the (pay-to-win) aspect of the game for quite a while and are very happy that Tim has the same view on that,” Schalke 04 Esports CEO Claudio Kasper told SBJ.  The move will no doubt put Schwartmann at a competitive disadvantage against his peers, but Kasper said that “the integrity of the competition is of vital importance. ... We value this very much higher than success in the international competition.”
  
  
• Why is this important? “Pay-to-win” is a common critique of video games which have placed powerful abilities or resources within a system which either requires or heavily incentivizes players to spend money in order to access them. Schalke’s video announcement echoed the sentiment of many gamers regarding these systems, particularly in competitive games -- “your wallet should not impact your gaming ability.”
  
  
• According to Schalke 04 Esports Chief Gaming Officer Tim Reichert, there has been no response from FIFA publisher EA regarding the decision. “We hope that EA will realize that (pay-to-win) will always lead to an unfair competition and that this is clashing with the values of sport and with that said all competitions will be played without the (pay-to-win) teams.”

AMONG US EXPERIENCES SIGNIFICANT REDDIT-ENGAGEMENT GROWTH

• Online multiplayer social-deduction game Among Us displayed massive engagement growth on Reddit for the period encompassing last week, with more than 51K additional posts and comments linked to the game as compared to the previous week, the largest increase among Reddit’s top-five most-engaged games for the period. The title’s 177K total engagements was the high mark among top games.
  
  
• According to the latest data analyzed by SBJ’s Andrew Levin, League of Legends boasted the second-biggest increase among the top five with an added 27K linked posts and comments on Reddit, and Rocket League had an increase of more than 20K, making it third best among the top-five list in terms of growth. LoL had just 2K less total engagements than Among Us last week.
  
  
• Meanwhile, LoL ranked first among the top-five most-engaged games on Reddit when it comes to communities -- another word for sub-Reddits -- in essence, dedicated forums within Reddit to the topic on hand. As such, there are 19 pages on Reddit dedicated to LoL. Coming in second and third, respectively, for Reddit communities among the top five: Minecraft with nine, and Fortnite with eight.
  
  
• Among Us was a surprise atop this list, as mobile games do not often find themselves above well-established titles like Fortnite and Minecraft when it comes to fan interest. In Q2 '20, only two mobile games ranked in the top-10 most engaged on Reddit, with Brawl Stars coming in at No. 7, and Call of Duty: Mobile at No. 10.

SPEED READS

• The franchise fees associated with participating in Activision Blizzard’s Call of Duty and Overwatch leagues now officially can be deferred due to the financial complications associated with the COVID-19 pandemic. Teams associated with the leagues have reportedly paid anywhere between $20 million and $40 million using a payment plan in order to pay the costs. With this announcement, teams have the option of deferring those payments, writes TEO's Kevin Hitt.
  
  
• Guild Esports has raised US$25.71 million ahead of its plans for an IPO via the London Stock Exchange Friday, writes TEO's James Fudge. Much of the investment interest is "likely associated" with David Beckham, who in June acquired “a significant minority stake” in the company through his investment vehicle DB Ventures.
  
  
• The Esports Integrity Commission has "issued a public update into its ongoing Counter-Strike spectator bug investigation, identifying a total of 37 guilty parties." The audit, launched on Sept. 4, "uncovered 96 instances of the bug being deliberately triggered in a competitive environment, resulting in the implication of 37 coaches."
  
  
• This tweet from Roundhill Investments CEO Will Hershey made the rounds earlier this week: "Mercedes-Benz. Spotify. MasterCard. State Farm. Bose. AXE. If you didn’t know better you’d probably think this was a list of sponsors for the U.S. Open. It’s actually a list of sponsors for the League of Legends World Championships." Be sure to check out Trent Murray's breakdown of how each brand will be activated at the championships over at The Esports Observer.
  
  
• Computer hardware and peripherals company Corsair Gaming completed its IPO, with the EagleTree-owned company raising US$118.6M before expenses, per TEO's Tobias Seck.
  
  
• Learfield IMG College and its esports tournament operator provider Mainline announced the “Mid-American Madden Challenge” designed for 10 members of the Mid-American Conference. Presented by the U.S. Marines, the Challenge will begin on Oct. 12 and culminate with a Championship format broadcast on Twitch.

Enjoying this newsletter? We've got more! Check out SBJ Media with John Ourand and SBJ College with Michael Smith. Also check out SBJ Unpacks on week nights, as we look at how the sports industry is moving forward amid a pandemic.

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 Austin Karp (akarp@sportsbusinessjournal.com) and we'll share the best of it. Also contributing to this newsletter is Thomas Leary (tleary@sportsbusinessdaily.com).