[toc]The Philadelphia 76ers has become the first major league sports franchise in the US to acquire its own esports team.
The two teams will be combined under the Dignitas brand, and the operation will be managed by new hire, and now chairman of Dignitas, Greg Richardson.
Philadelphia 76ers Managing General Partner Josh Harris said:
“The eSports industry is primed for incredible growth and we are thrilled to become an owner of such a storied franchise as Team Dignitas. There is a tremendous opportunity to leverage the infrastructure, resources and experience of the Sixers organization to support these exciting teams as they continue to compete at the highest levels across multiple games.
We see our entrance into eSports as a natural extension of our expanding interests in traditional sports and entertainment and are confident that our involvement will accelerate the already rapid pace of growth in eSports as a whole.”
76ers want to lead in the esports space
The deal will see the merged Diginitas team benefit from the 76ers’ “business expertise and vast resources to bring infrastructure and alignment to position these eSports teams for future growth.”
In managing the team, the 76ers aim to share their prowess in sponsorship, sales and marketing, merchandising, and all the other business areas which are essential to being a leading sports team. They will also be devoting extra resources to player recruitment, development and “wellness.”
Philadelphia 76ers CEO Scott O’Neil explained the ambitions the team has for its esports expansion:
“Bringing together gaming industry luminaries including Greg Richardson, Michael O’Dell and David and Michael Slan puts us on track to build the most respected and dominant franchise in the eSports space, spur fan engagement and reimagine corporate sponsorship to create a vibrant, global e-arena where the greatest players in the world aspire to compete.”
European sports teams cleared the trail
Although European soccer teams such as Manchester City, West Ham and Valencia have dipped their toes into the esports water by signing individual players or sponsoring an esports team, owning an entire esports team is still a rarity.
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76ers have a history of adopting innovation early
The Philadelphia 76ers are the “only professional sports team in North America to own and wholly manage an innovation lab.” As the current number one team in the NBA, ranked by new season ticket sales, the 76ers are always on the lookout for ways to make the brand more attractive.
When internet poker was first authorized under New Jersey state legislation, the 76ers were the first team to sign a sponsorship deal with one of the newly licensed operators, partypoker.
Scott O’Neil told ESPN:
“We like to be agents of change, rather than sit and watch from the sidelines. Our owners, Josh [Harris] and David [Blitzer], have big eyes, big vision and big appetite.”
Deal may add value to many more esports teams
The interest from a major sports franchise is likely to grab the attention of other sports team owners across the US. They will not want to be left behind if there is a big opportunity in the air.
That increased interest, which could lead to more esports team acquisitions, is likely to increase the value of existing esports teams. Demand meets supply at price, and more demand means higher prices.
Looking at possible systemic effects, investors may find esports teams more attractive if there is a possibility of exiting their investment through a sale to a big business sports franchise.
Tobias Sherman, global head of esports at WME | IMG, who brokered the sale, is in no doubt that this deal is a game-changer:
“This transaction marks a pivotal moment in the development of the eSports industry. All of us will benefit from the financial expertise and long-term vision of Josh Harris, David Blitzer and Scott O’Neil as well as the detailed eSports industry knowledge of Michael O’Dell as we seek to create a new model that melds the power of traditional professional sports with eSports.”