[toc]The 2016 trend for major investments in esports teams is continuing into 2017.
The NBA’s Miami Heat established a strategic partnership with Misfits. California-based media company Lionsgate invested in the Immortals.
Miami Heat and the Misfits
The Miami Heat is following in the footsteps of the Philadelphia 76ers. They became the first NBA team to fully invest in esports when it bought controlling stakes in Dignitas and Team Apex last September.
The press release says that the Misfits deal is:
“unique as it calls for the Heat to assist in all duties including marketing, branding, promotion, retail, digital and sponsorship activation on behalf of the franchise, and to cross-promote the Heat and Misfits.”
The 76ers claimed that their deal would provide “business expertise and vast resources to bring infrastructure and alignment to position these eSports teams for future growth.”
It’s not clear how the Heat deal differs substantially from that of the 76ers in what benefits the teams expect for themselves and what they will bring to the development of their esports partners.
Through the lens of investment strategies, they look very similar. Both are predicated on the skill set that traditional sports teams can bring to esports teams. They are also based on the audience that esports teams can bring to the partnership.
Miami Heat Chief Executive Officer Nick Arison said:
“For us, it made perfect sense to partner with Misfits, a young and ambitious franchise in a sport that is blazing a trail in terms of 21st century recreational competition amongst Millennials.”
For the Misfits, Co-founder and CEO Ben Spoont explained:
“This partnership will be the catalyst and foundation to our continued expansion of the Misfits organization into a global esports brand and company. The HEAT — innovators and leaders in traditional sports — will help Misfits to unlock meaningful value across all facets of our business.”
Lionsgate and the Immortals
The Immortals already has a roster of high profile investors. That includes former junk bond king Michael Milken, and serial entrepreneur Steve Kaplan. The latter is co-owner of the Memphis Grizzlies and the UK Premier League soccer team Swansea City.
Immortals Chairman and CrossCut Ventures Managing Director Clinton Foy commented:
“Lionsgate joins a dream team of media, tech and traditional sports partners who share our vision of building a dynamic Immortals organization and a strong e-sports foundation. What we’re doing today in eSports is like the early days of building the NFL and NBA. It’s not the evolution of games – it’s the evolution of sports, technology and media.”
Lionsgate sees itself as much more than just a Hollywood studio.
It describes itself as “a vertically integrated next generation global content leader with a diversified presence in motion picture production and distribution, television programming and syndication, premium pay television networks, home entertainment, global distribution and sales, interactive ventures and games and location-based entertainment.”
The investment in esports looks like it fits a lot of the business verticals that Lionsgate targets.
Lionsgate President of Interactive Ventures & Games Peter Levin explained:
“Our involvement in eSports creates tremendous opportunities to develop new content and utilize our suite of distribution platforms for a coveted consumer demographic with compelling engagement metrics. Collaborating with an elite group of partners, the combination of the Lionsgate and Immortals brands will be formidable.”
Lionsgate deal loooks like aXiomatic’s
The Lionsgate investment most resembles the investment made by aXiomatic which bought Team Liquid in September 2016.
A large and diverse group of investors formed aXiomatic, including NBA legend Magic Johnson. Peter Guber and Ted Leonsis lead the group.
The investors’ expertise spans an enormous range of media and sports interests.
Guber is the:
- Chairman and CEO of Mandalay Entertainment Group
- Chairman/owner of Mandalay Sports Media
- Golden State Warriors (NBA) co-owner
- Los Angeles Dodgers (MLB) co-owner
- Los Angeles Football Club (Major League Soccer) co-owner
Leonsis is the founder, chairman, and majority owner of Monumental Sports & Entertainment, which owns:
- NHL’s Washington Capitals
- NBA’s Washington Wizards
- WNBA’s Washington Mystics
- Arena football’s Washington Valor
- Verizon Center (downtown D.C.)
Immortals CEO Noah Whinston summarized the objectives of both the team and its investors:
“Immortals and Lionsgate are both focused on developing new entertainment formats, and we’re thrilled to collaborate with them at the cutting edge of eSports media.”
Media, broadcasting and entertainment are the sine qua non of esports
The Lionsgate and Miami Heat investments typify the strategic thinking behind the future development of esports. More than anything else it is about the audience, and creating, engaging with and monetizing the audience that esports can deliver.
For traditional sports teams, the extension of their business to esports allows them to use their existing marketing capabilities to extend the reach of their team brand.
In the realm of broadcasters and content makers, esports can deliver an audience which has one of the most attractive marketing demographics of any form of entertainment.
As a result, for esports teams, their partners will influence their future in the esports world. They will also depend on what their partners can bring to the table. Expect many more partnerships to surface throughout 2017.
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