The Crossover: Why sports brands are chasing esports viewers and spending millions to reach them

“Alright we’re gonna take a left turn here. A real left turn.” “Almost like a U-Turn and then another U-Turn.” “Competitive video games.” “And I’m laughing because, I can’t think of anything less interesting.” “So this is basically going to be a league watching people play video games.” “Esports.” “Can it truly be a spectator sport?” “It’s for booger eaters.” “Aw no one wants to watch people play video games, that’s so boring.” “It’s hard to imagine 36 million tuning in to watch this?” “With cash prizes going into the millions.” “League’s World Championship game with a 2 million dollar purse.” “The lucrative worlds of professional sports and competitive video gaming are beginning to merge.” “We’re looking at multi billions of dollars in just the next few years.” “There’s a lot of money to be had there.” “It has created this international audience and is a worldwide technological sports explosion”. One point five billion. That’s the dollar estimate that the esports
industry was valued at for 2017. It’s a big number and probably a surreal
reality for those of us who saw esports grow from what it was five, ten years ago or even further back. (Casting) But that number pales in comparison to the industries that have recently dipped their toes into esports, or conversely made a big
splash like the NBA. The Golden State Warriors, the Cleveland Cavaliers and the Houston Rockets have entered into the NA LCS, yet each of those teams by themselves are worth as much as the entire esports industry put together. With esports being such a small drop in the bucket for these teams, why did they bother getting into esports? Chances are, it’s because of someone like you. You, yes you, the average esports fan. You may not know it but your time is valuable, to the point where companies are spending billions of dollars trying to grab your attention. And many already have. Ask yourself: Coke or Pepsi? Adidas or Nike? Chances are you have an opinion on the matter. And while part of that is due to your first-hand opinions on their products, “I feel like I can already tell by the shape that this is Pepsi.” you’ve likely been influenced by their various forms of marketing. That is, if they’ve been able to reach you. So much interest into esports comes from a generation that is so resistant to conventional advertisements. This is partly because of the TV alternatives like YouTube and Twitch, but even when ads are shown on those platforms, you’ve likely avoided them through the use of ad-blockers. But just because you haven’t been influenced to spend your time and money, doesn’t mean you’re not spending it. According to a report from Nielsen’s esports division, which surveyed 4,000 esports fans from the U.S., UK, France and Germany aged 13-40, the esports fan spends about 17% of their leisure time on esports. That’s almost a fifth of your free time spent on esports, a lot of time spent away from conventional ads. Nielsen also says that 61% of esports fans live with three-plus people and make liberal use of social media. Whether you know it or not, you’re an influencer yourself, to those around you and those you interact with in your life. Which is why companies spend billions to try to reach you and the esports industry is no different. That $1.5 Billion valuation of esports from earlier came from SuperData Research and they say that 35 percent of that was from ads and sponsorships. They’ve also projected the industry to grow by 12 percent each year, to a value of 2.3 billion by 2022. “I don’t think this is rocket science. Esports models in a lot of ways the future.” “The demo is young, they’re adblockers, cord cutters, cord nevers. They’re extremely hard to get in front of.” “They consume sports and esports very differently than a traditional sports fan.” The potential of reaching an “impenetrable audience” is a clear benefit for any company with an aging audience, and interest in the franchised NA LCS was immediate. According to our reporting, there were over 100 different organizations that applied for the 2018 franchise season, some of which came
from abroad in Europe and China. Ultimately, 10 teams were chosen, and it didn’t come easy, or cheap. “I think our application, I wanna say a little under a hundred pages, a little over a hundred pages.” Creating a 100+ page presentation is an exhaustive
process for any organization. But even if you were one of the lucky 10 to be chosen for the league, the price tag of an NA LCS slot was $10 million if your team was already part of the NA LCS, or $13 million if you were a newcomer. Now, for these billion dollar NBA franchises, $10-ish million doesn’t break the bank. But at face value, and especially by esports standards, that is a heck of a lot of money. Which is why even the big endemic brands, such as Team SoloMid and Cloud9 sought outsider investors to help foot that bill. All this said, despite the man hours and money required to get into the NA LCS, many organizations saw the opportunity to reach that elusive, young audience. So, what do esports from these investments? The inaugural NA LCS season for these teams saw unexpectedly strong results. While the Golden Guardians wound up in dead last, Clutch Gaming made it to the playoff semis after stunning TSM 3-1 in the quarters. “No one expected that outcome.” And 100 Thieves reached the finals after a narrow 3-2 series against Clutch, but lost but lost 3-0 to Team Liquid and fell short of an MSI berth. So, what’s in this for you? Are you more of a fan of the Golden Guardians simply knowing that they’re associated with the GSW? “And next we got, the add carry.” …Probably not, but their influence goes beyond just a single player or single team and they can positively affect the quality of life for all the players and everyone else working within the esports industry. “The honest answer is you don’t need these people, if you’re a fan.” “If you’re a fan, it doesn’t matter how much an organization pays for its players.” “It doesn’t matter if an organization is the Houston Rockets or the GSW.” “That doesn’t matter, but for people in the industry, it’s really important.” I haven’t checked my bank account to see if I’ve gotten paid in the past few months because I know I’ve been paid, because I work for the Houston Rockets.” “I know that when we sign a player and I commit able to pay them for the year or two years or whenever long.” “That my ownership will come through, and we will pay those players and live up to our engagement.” “That hasn’t always been the case.” “Basically our owner’s a scumbag, so we kinda peaced out.” Esports was built by grassroots communities, which have grown into a multi-million dollar industry within the past few years. However, even with this rapid influx of money, job security is still a concern for many working in esports. “It’s really hard to emphasize, just how much heartache and stress there was.” “Trying to be able to pay our players on time because sponsors weren’t paying out.” “I had credit card debt that was racking up, that I had to rack up in order to get my players dinner or lunch.” “As opposed to being able to get them money through the door.” “Right? Those are the things that really have screwed our industry for a long time.” “The grassroots fan stuff, awesome, amazing, totally worth it.” “But at the end of the day, it’s really hard for me to advocate for these guys or kids or boys and girls. and guys that are like, “Hey I really want to get into esports,” and I’m sitting here looking at my bank account being like, “Man, this sponsor hasn’t paid me yet this person has literally stolen my money from me. This person’s not doing their application.” And those things are disappearing.” It doesn’t matter whether you’re an OG NA LCS fan who still cheers for Cloud9, TSM or CLG, or whether you’re a fan of the new challengers like Clutch Gaming, 100 Thieves or the Golden Guardians. The inclusion of the NBA teams, and other investors from the traditional sports world, is a good thing for everyone. But let’s not forget that the NBA teams and their respective sponsors gain a lot of influence and loyalty through their esports teams. After all, they’re in this because of you. This generation is changing the way broadcasting and advertising works, simply by the way it consumes media. Sports teams and other brands have had to flip the script when it comes to reaching that audience. If you’re not watching, playing or interacting, there’s no value for the teams and sponsors that are buying into the scene. The small community that built this scene holds all the cards. It’s that grassroots community that’s changing the game you, the esports fan and has forced billion-dollar industries to stop ignoring esports and come along for the ride.

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