For the next six years, Riot Games will be guaranteed $50 million per year as part of the deal which runs until 2023.
In an interview with Yahoo Esports, executives from both Riot Games and BAMTech explained their expectations from the partnership.
Riot’s Co-Head of Esports and Head of Merchandising Jarred Kennedy explained that Riot was still committed to free content:
“We first and foremost believe in making sure that the content is in places where the fans want to watch it, so that will continue to be the case… We believe in making content freely available, and it will continue to be freely available into the future. We have no plans to change that.”
$50 million a year is expected to be a lowball number
BAMTech President of Business and Media Bob Bowman said that he expects to generate much more business than the minimum necessary to cover the $50 million annual guarantee to Riot Games.
“I hope we’re going to do a lot more than that. That’s the minimum guarantee, and I hope we’re going to exceed that by a large margin. And I expect that we will.”
The reason for his confidence is a powerful belief in the potential of esports, and in particular for Riot Games’ success in developing games.
“The amount of time that [Riot Games] has over the top for live events far eclipses any other sport in the world — not just esport, any other sport in the world.”
“So the monetization for that effort and those kind of events is going to be really exciting. But we think the world is ready for esports. The sponsors, the advertisers are ready for it. They’re dying for it. It’s a great audience and they spend a great deal of time with this content.”
The deal represents a confluence of interest for massive companies
BAMTech is a subsidiary of MLB Advanced Media (MLBAM). MLBAM is owned by thirty Major League Baseball clubs, and until now has focused on running the online and interactive operations for the league’s clubs.
BAMTech spun off from MLBAM in August 2015. In August this year, The Walt Disney Company bought a third of the equity for $1 billion, with an option to increase its stake to take majority ownership.
The Disney involvement is significant. Disney bought its stake in BAMTech specifically to develop a live streaming service as a part of a subscription package on ESPN.
Riot Games is owned by Tencent, the Chinese company which probably has the largest exposure to the esports industry.
In July 2014, Forbes ran an article about MLBAM with the title, “The Biggest Media Company You’ve Never Heard Of.”
The 2016 revenues for MLBAM should top the $1 billion mark, so in this one deal we can see how the world’s biggest companies in their respective industries are taking esports very, very seriously.