Video games and sports: It's a marriage that is somehow equal parts unlikely and inevitable. I'm not talking about Madden, FIFA or NBA 2K. These games are certainly popular, but they've never gained significant traction within the competitive gaming industry, more commonly known as esports.
Instead, major players, owners and even teams from the world of traditional sports are expanding their business endeavors into games that don't resemble traditional sports, such as League of Legends, Overwatch and Counter-Strike. Put simply, people throughout the sports world are starting to bet big on the potential for video games to match or surpass their traditional sports counterparts in viewership and revenue generation. The question is: Could sports investment help alleviate the problems of monetization, dispute resolutions and sponsorships?
What's happened?
Monday morning, the Philadelphia 76ers announced the acquisition of esports teams Dignitas and Apex, making them the first North American professional sports team to own an esports team. Twenty-four hours later, Team Liquid announced that Peter Guber, co-owner of the Golden State Warriors and Los Angeles Dodgers, and Ted Leonsis, majority owner of the Washington Wizards and Washington Capitals, acquired a controlling interest in the esports organization.
These acquisitions represent perhaps the watershed moment in a wave of interest and resulting investment from key figures throughout the sports world that are looking to capitalize on the relatively nascent, but incredibly popular esports industry.
Former NBA player Rick Fox founded his own team, Echo Fox, while current Boston Celtics forward Jonas Jerebko purchased the Renegades. Sacramento Kings minority partners Andy Miller, Mark Mastrov and Shaquille O'Neal, along with Alex Rodriguez and Jimmy Rollins, all own a stake in NRG. Steve Kaplan, a co-owner of the Memphis Grizzlies, is an owner of Immortals. And all of this is just within the past year.
European sports teams are following suit. German soccer team FC Schalke 04 bought a spot in the European League of Legends Championship Series. Football clubs Manchester City, West Ham and Wolfsburg have also signed individual players to represent their brands.
The teams business isn't the only part of the esports industry attracting interest. Turner Broadcasting has now produced and broadcasted esports events in multiple different titles, while Heroes of the Storm's college tournament, Heroes of the Dorm, has been on television for the past two years. Meanwhile, one of the largest talent agencies in the world, WME-IMG, acquired Global eSports Management and established an entire esports vertical.
And that's not even everyone. The band Linkin Park, actor Ashton Kutcher, Nets point guard Jeremy Lin ... they all have some vested interest in esports somewhere.
How can sports help esports?
The esports industry is already massive, and is growing quickly. Far more importantly, people from traditional sports are in a unique position to help springboard that growth and level up the business practices of the industry.
Esports is at a major crossroads. While competitive gaming has been around since the advent of video games themselves, it's never been a particularly successful stand-alone industry. Instead, esports have long been viewed as a great way to market games.
Now we're on the cusp of something much bigger. Esports have the potential to become full-fledged spectator sports that create global superstars and generate revenue in keeping with their popularity.
In order to make this transition, the esports industry has a lot to learn. Esports shouldn't simply copy the infrastructure that has been built around traditional sports, but it shouldn't reinvent the wheel either. As I've written about in the past, esports lack the type of dispute resolution mechanisms that are common throughout traditional sports. This is just one area where esports could benefit from integrating concepts that have been debated and developed in traditional sports for decades.
Perhaps the biggest potential for growth lies in monetization. Having 36 million viewers for the League of Legends World Finals is amazing, as is selling out Madison Square Garden or the Staples Center. But popularity has to start translating to revenue.
Traditional sports figures bring with them experience in selling sponsorships, merchandise, media rights and much more, not to mention connections to key decision-makers in each area. Sports can also help create ties to local fan bases and revenue streams, which is a major untapped resource in the esports industry because teams have historically not been connected to a particular city or even geographic region.
I firmly believe that by 2060, the most popular video game in the world will rival soccer in competitive infrastructure, popularity and monetization. In order to get there, we need some help. The Sixers, Peter Guber, Shaq and wide array of other people and organizations from traditional sports that are already involved with esports, not to mention those who are eager to follow in their footsteps, are exactly what we need to level up the esports ecosystem and help it reach its extraordinary potential.
Editor's note: Bryce Blum practices at IME Law, where he represents a variety of esports teams, including many referenced in this article. Bryce represents Team Liquid and worked on the Sixers' acquisition of Dignitas and Apex.