Why professional teams are investing into esport

There is little doubt that the virtual sports world is gaining both interest and followers at a rapid rate. With multi-million-dollar tournaments paying out huge prize money, plus a growing spectatorship at all the major competitions, sponsorships and buy-outs are profitable and great marketing tools.

This year, the Philadelphia 76ers of the NBA bought the controlling stake in two major eSports teams, Apex and Dignitas. Consequently, they merged them into one group, fielding competitive games in OverWatch, Heroes of the Storm, League of Legends and Counter-Strike: Global Offensive.

This was followed in quick succession by a group of NBA owners and former competitors including Magic Johnson; Peter Guber, co-owner of the Golden State Warriors; and the owner of the Washington Wizards, Ted Leonsis. The very next day an announcement was made that the owner of the NBA’s Memphis Grizzlies, Stephen Kaplan upped his stake in The Immortals, one of the newer teams.

All this was given credibility by the decision by ESPN to cover eSports on a dedicated subsite. This gives credence to gaming, putting it on the same level as basketball, baseball, American football, hockey, and what the Americans call soccer. They stated that fans will have the same high standard of journalism and quality content given to top-level sports by the channel, with time allocated to documentaries in competitive eSports and live reporting from the major tournaments.

ESPN also published its inaugural edition, eSports Issue, in May 2016, covering the Dota 2 tournament, profiles on some of the superstars, and a story on Marshawn Lynch of Seattle Seahawks fame, who created his own character for Call of Duty.

Of course, it’s all about money. eSports pulls in massive audiences, with projections of $493 million in revenue in 2016. Could this trend continue, shifting from viewing the NBA and NFL to watching Dota 2 and League of Legends? All the youngsters who were told they were wasting their time by playing PlayStation seem to have prevailed, with a new type of “sport” emerging – just not played on sports fields.

Even soccer team Liverpool has turned to e-sports nowadays.

Could this new trend see a spurt in merchandising? T-shirts, sweatshirts, caps ….. the list of promotional sports items is endless – creating a new revenue stream? TV coverage helps make a lot of money and draws a new viewership, adding value to this emerging sports stream.

Mark Cuban, the well-known billionaire, and owner of the Dallas Mavericks invested in eSports start-up, Unikrn, which allows for both watching and betting on the games. He is, though extremely wary of investing directly into the teams, foreseeing burnout in the top players. And he’s right. Players at the top level have a tendency to burn out in their 20’s and then retire.

But this hasn’t stopped the gold rush. Shaquille O’Neal and New York Yankee retiree Alex Rodriguez joined forces with other punters, investing in NRG eSports. Particularly noting that they field the enormously popular games of Counter-Strike and League of Legends, not a bad move.

The trend appears to be the mega-wealthy NBA owners who are participating. It is a well-known fact that the league has 20 billionaire owners, but the NFL has 19, and the NHL, 10. It just could be that the NBA billionaires see that this sector will continue to boom, leaving the other sports sectors eating their dust.

Viewership has grown exponentially. Between the years of 2014 – ’16 eSport online, along with TV audiences grew from 204 million to 292 million. This is based on Newzoo data. This trend grew revenue from $194 million to $462 million during the same two years. Phenomenal. And their predictions indicate that by 2019 eSports will generate more than a billion US dollars per annum.

Based on stats of 27 million people tuning into the finals of League of Nations world champs in 2014, with Twitch live streaming showing an additional 16 billion minutes of live streaming per month, these are phenomenal numbers. Ones you can bet on with Betfred.

The 2016 League of Legends semis and finals were held at venues famous for traditional sports, Madison Square Gardens in New York City and the Staples Centre in Los Angeles. This puts paid to the notion that these huge arenas are too big for a tournament featuring video games. The tickets are often sold out within an hour of being released.

It certainly looks as if instead of buying in huge, lavish properties and ritzy sports cars, the savvy sportspeople

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