OT Sports stars, franchises and Hollywood agencies are betting $38 million on an esports revolution

Llama19

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Jan 19, 2013
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To quote:

"“Evolution Media has spent several years advising and analyzing companies in the esports sector, and we’re particularly excited to partner with a world class management team led by [Vision Esports LP] Stratton [Scalvos], whom we’ve known since his days running Strikeforce and the San Jose Sharks,” said Rick Hess, founder and co-managing partner of Evolution Media, in a statement. “Esports is one of the highest growth sectors within all media and entertainment. We couldn’t be more bullish on the space and Vision’s market position.”


“This is just like pro sports,” says Scalvos.”Why wouldn’t you want to invest broadly across the spectrum so you have participation in the team side, participation in the league and the content? And we said, let’s be in all three parts of the ecosystem.”

The economics speaks for itself. According to Scalvos, leagues are wildly more profitable than teams. “Teams are great but leagues make 27 times the revenue,” he said."

Source: techcrunch.com/2018/02/22/sports-stars-franchises-and-hollywood-agencies-are-betting-38-million-on-an-esports-revolution/
 

Pilky01

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The economics speaks for itself. According to Scalvos, leagues are wildly more profitable than teams. “Teams are great but leagues make 27 times the revenue,” he said. /

I feel like this is kind of an inherent problem with "eSports". Feels kind of ponzi scheme'ish
 
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cutchemist42

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Wait so the league makes money but the teams dont? Is this like MLS where no team has claimed to have a profit while league revenues and franchise values soar?

Or is it more like UFC where the teams get peanuts while the promotion keeps a huflge chunk of revenue?

Im not sure Im understanding it.
 

Rusty Razor

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Jun 25, 2017
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Teams come and go regularly depending on sponsorships. It's not practical for the majority of teams to own/operate a league.

The LCS (League of Legends) and the Overwatch league have moved to more traditional North American models with franchising. Before that in the LCS, 2 teams a year were folding because being relegated to the lower league basically left you without a sponsor.

I know the LCS did an extensive vetting process and looked at sponsorships and financial plans before granting the franchises. Immortals was a team with that was largely backed in VC money and had few sponsors, and their application was denied even though the team was successful results wise.
 

Llama19

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College esports is set to explode, starting with the Fiesta Bowl

To quote:

"Esports generated $756 million in revenue in 2017, mostly through sponsorships and ads, and that number is expected to hit $1 billion this year. Popular games like League of Legends and Overwatch have implemented regulations to improve conditions for pros and stabilize the industry. Traditional sports teams are buying esports franchises and launching leagues as dedicated arenas pop up across the US.

Universities are taking notice, too. Illinois' Robert Morris University was the first school to establish a varsity esports program in 2014, offering scholarships to skilled League of Legends players. Today, more than 60 colleges and universities have esports programs recognized by the National Association of Collegiate Esports (established in 2016); many more schools have unofficial programs, some of which are extremely successful."

Source: www.engadget.com/2018/02/22/college-esports-is-set-to-explode-starting-with-the-fiesta-bowl/
 

Burke the Legend

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Feb 22, 2012
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The problem with these video games is that the presentation isn't very good if you haven't played the game. I was watching Overwatch and it's cool to see how accurate the pros are but the actual contest wasn't a great presentation, the gameflow wasn't very compelling for a layman who doesn't know the intricacies of the various powers being used. There's a reason there's no professional laser tag games being broadcast on TV, it would be boring to watch.

They need to design some video games that are created with a TV presentation in mind, and these would probably end up looking like a real sport does now. Two teams playing with a ball but then you could add some video game gimmicks like zero gravity, lasers or other sci fi aspects.
 
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TOGuy14

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The problem with these video games is that the presentation isn't very good if you haven't played the game. I was watching Overwatch and it's cool to see how accurate the pros are but the actual contest wasn't a great presentation, the gameflow wasn't very compelling for a layman who doesn't know the intricacies of the various powers being used. There's a reason there's no professional laser tag games being broadcast on TV, it would be boring to watch.

They need to design some video games that are created with a TV presentation in mind, and these would probably end up looking like a real sport does now. Two teams playing with a ball but then you could add some video game gimmicks like zero gravity, lasers or other sci fi aspects.

Some games don't lend themselves well to presentation, Overwatch is one of them. To be fair though Blizzard has made huge strides in the presentation of their matches (dynamic cameras, uniforms, highlighting etc), I expect they will continue down this path. I find that DOTA is very watchable, but is probably very confusing to a non-played given the depth and complexity of the game.

I wonder which version of eSports will take off though, there seems to be two different dynamics at play here. A lot of the early gaming teams were just a group of kids going for the same goal and splitting prize money. As eSports have grown professional sports owners have tried to capitalize on this by "owning" teams and getting a cut of that money (and signing players to contracts like regular sports).

The original method has a boom bust charm to it. The team that wins a Dota International tournament splits $10M among the five players, their backup and whatever other arrangements they have with coaches video guys etc. Let's say each of the players walks away with $1.75M each. The downside to this model is players frequently reshuffle to teams as they want so there is tons of turnover after each major tournament leading to a lot of fans following players, not teams.

In a situation like Overwatch the guys have contracts, say $100K a year and maybe some bonuses for winning tournaments. They have pay stability but can be traded like other sports assets and now the bulk of their winnings probably go to the owner, similar to the 50/50 revenue splits between owners and players in the major leagues. It keeps teams more consistent and easier to follow, but introduces a middle man (owner) who is scooping a lot of talent away from the actual talent (players)
 

Tom ServoMST3K

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Nov 2, 2010
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I used to be a big time Starcraft 2 fan, and am a big sports fan in general.

First, a comment on the topic:

I think it's a gamble that won't pay off short term, but could long term. The crossover potential between traditional sports and esports RIGHT NOW is very, very small. And I don't see the benefit to these sports teams trying to start a league. Esports are more comparable to individual sports like golf or Tennis IMO. A team brand isn't worth a lot, especially if it's connected to a traditional sports team.

I heard Sports radio guys talking about how the E-Knicks could play the E-Lakers, and that model would never work. Something similar to how the Rugby Sevens world group structures its season could work.

Second, a comment on the industry as a whole.

The missing piece right now is player agents/union. I've read some nasty things about how these contracts are set up, and how terrible it is for the players, but nobody is interested in having an advocate work out a deal for them. Until there's a culture change, teams will continue to take advantage of these players.
 

Pilky01

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Jan 30, 2012
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Its amazing to watch this grow. Kind if reminds me of the poker where its accessable to everyone and easy to learn and play against others. Getting paid to play video games. I could only dream of that growing up.

Maybe I am in the minority but I don't want that. I want to play videogames for fun, not work.
 
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Killion

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Feb 19, 2010
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Oh good, I was just getting over how much I abhorred poker being presented as a spectator sport.

.... :laugh: ya, wow. blew my mind... blows my mind... how that took off the way it did.... Gary Bettmans Stepbrother Jeffrey Pollack one of the key movers & shakers behind all of that several years ago. Actually "Commissioner" of the first pro poker "league". He'd been with Nascar previously, broadcast & sponsorships.
 
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Tinalera

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.... :laugh: ya, wow. blew my mind... blows my mind... how that took off the way it did.... Gary Bettmans Stepbrother Jeffrey Pollack one of the key movers & shakers behind all of that several years ago. Actually "Commissioner" of the first pro poker "league". He'd been with Nascar previously, broadcast & sponsorships.

I remember danny (negreau?) the canadian who would wear nhl jerseys in the tournaments. Always wondered if he got a little something from nhl for that slick little cross marketing.
 
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Killion

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I remember danny (negreau?) the canadian who would wear nhl jerseys in the tournaments. Always wondered if he got a little something from nhl for that slick little cross marketing.

He's actually from Toronto, huge hockey fan (reputedly cried sometimes after Leaf losses, so mustve cried an awful lot as a kid :laugh:) hence the sometimes wearing of various NHL team jerseys to the table. He moved to Las Vegas, most successful pro poker player in the history of those tournaments ($32M+ in career earnings & counting) and was active with Bill Foley during the Knights ticket drive. No "NHL Sponsorship" deal with him personally though there was (still is maybe?) with Pro Poker & the NHL. Cross promotion/sponsorship. A number of NHL players also compete in various poker tournaments, Roberto Luongo etc.
 

mouser

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If you don’t follow esports and want your mind completely blown, check out how big the prize pool and 1st place are for the annual DOTA 2 Invitational in Seattle. Last year was the 7th annual edition and the prize pool keeps leaping year over year.

Guess a number? You’re too low. Guess another number you’re still too low.

5 player teams, 2017 tournament prizes:

Prize pool $24.8m

1st: $10.86m
2nd: $3.95m
3rd: $2.59m
4th: $1.73m
5th-6th: $1.11m
7th-8th: $617k
9th-12th: $370k
13th-16th: $123k
17th-18th: $62k
 

Pilky01

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They were showing competitive Rocket League on the big screen during half time at the most recent TFC game.

I love Rocket League but couldn't follow it at all.
 

TOGuy14

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Dec 30, 2010
12,061
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Toronto
If you don’t follow esports and want your mind completely blown, check out how big the prize pool and 1st place are for the annual DOTA 2 Invitational in Seattle. Last year was the 7th annual edition and the prize pool keeps leaping year over year.

Guess a number? You’re too low. Guess another number you’re still too low.

5 player teams, 2017 tournament prizes:

Prize pool $24.8m

1st: $10.86m
2nd: $3.95m
3rd: $2.59m
4th: $1.73m
5th-6th: $1.11m
7th-8th: $617k
9th-12th: $370k
13th-16th: $123k
17th-18th: $62k

DOTA player here, Valve has a genius strategy to raise funds for the prize pool. The sell "compendiums" which are basically in game quests and milestones that reward players with cosmetic items. They take the money from these cosmetic items and roll it into the prize pool. I believe the pool has grown significantly each year as well. Would not be surprised if the winning team takes home 12-13M this year

They were showing competitive Rocket League on the big screen during half time at the most recent TFC game.

I love Rocket League but couldn't follow it at all.

Huh? It is just soccer with cars, how could you not follow it?
 

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