Big Names and Big Money
The Philadelphia 76ers, Miami Heat, Boston Celtics, New England Patriots, West Ham: Household names in the world of sports across multiple professional sports leagues. Aside from being superpowers in their respective arenas, these organizations also have something else in common. They are names on a long list of sports franchises that invested millions of dollars into esports. This market is anticipated to grow roughly $1.5 billion by 2020 with a skyrocketing viewership of around 550 million in the same year. These numbers have become irresistible for investors, and sports franchises are seizing the opportunity to get a piece of the action. Esports has already made its mark on culture and proven to be a realistic and tangible market for investors. In order to truly understand how these two worlds have collided, let’s look at the variables at play.
You would be challenged to find a casual gamer who enjoys EA’s Madden series or the NBA’s 2k series who isn’t also a fan of the NFL or NBA. Video games and sports have already experienced a connection between fans and players in recent years. However, you may be surprised to know that sports franchises are investing outside of their aligned sports. To date, the Sacramento Kings, Golden State Warriors, Cleveland Cavaliers, Houston Rockets, and Philadelphia 76ers have invested in League of Legends’ teams.
League of Legends, for those of you who do not know, is a strategy based game with a fantasy setting that could not be more different from playing a game of hoops on the hardwood. This is simply because the viewership for games like League of Legends is much too high to ignore just because there isn’t a basketball in play. The official League of Legends Twitch channel was officially the first channel to reach 1 billion total views and has since entered the record books. In addition to simple viewership numbers that prove viability, the NBA executive board has acknowledged that almost 50% of esports fans also watch the NBA. These shared viewers between esports and Sports is one of the major catalysts for the collision of our two worlds.
Compared to sports franchises, esports organizations and players cost a fraction of the price. The price to pay in order to invest in esports is relatively “cheap” in the grand scheme of things. Buy low and sell high. Let’s look at some key figures to better help us understand the possible revenue investors could seek to earn.
Average Salaries for professional Sports athletes:
NFL – $5.15 million
MLB – $3.2 million
NFL – $1.9 million
Average Salaries for top professional Esports players
CS:GO – $200k to $300k
LoL – $500k to $800k
These figures for CSGO and LoL are significantly lower than professional sports athletes. In addition to low player costs, the price tag on an entire esports organization is pennies relativee to sports franchise. The Philadelphia 76ers acquired Team Dignitas and Apex Gaming for an approximate total sum of $5-10 million. The Milwaukee Bucks purchased a Championship slot for League of Legends for $2.5 million. In comparison, the cheapest NFL franchise, the Jacksonville Jaguars recently sold for a much higher price of $750 million dollars. Cheap labor, cheap price tags, and a skyrocketing market, the perfect environment for investors
We here at theBRKDWN predict the list of professional sports franchises that are investing in esports organizations to significantly grow. The market is ripe for the taking and the collision of these two worlds is a win-win scenario for all.