#esportsready - How sports clubs can get involved in esports

Posted on 03 August 2018

#esportsready - How sports clubs can get involved in esports

Newzoo, a leading provider of market intelligence to the gaming industry, reported that global esports revenues reached an estimated $696 million in 2017, and are predicted to grow to $1.5 billion by 2020. Audiences are also expected to grow from 385 million viewers in 2017, to 589 million viewers by 2020. At the same time, many sports clubs are facing the challenge of how to attract the next generation of fans. When one looks at the industry's projected growth statistics, it's not surprising that the likes of Miami Heat, the Philadelphia 76ers, Paris Saint-Germain and Manchester City are turning to esports as a potential solution.

In March 2018, Esports Insider estimated that over 180 sports clubs were involved in esports in one form or another. Fast forward to July 2018 and this figure has grown to over 220. However, whilst many clubs are expressing a desire to ‘get involved in esports’, very few know how to do so successfully. This article explores three different industry entry models and considers their suitability according to the particular aims and objectives of sports clubs.

AS Roma / Fnatic

For many sports clubs, investing in a professional FIFA player (players paid to play EA Sports' FIFA video game franchise, referred to as 'FIFA' throughout this article) is a comfortable and familiar first step into the world of esports.

In February 2017, AS Roma did just this, but with a twist, announcing the creation of a FIFA team in partnership with Shoreditch-based Fnatic - one of the world’s leading esports organisations with a history of participating in a number of different esports titles.

The AS Roma/Fnatic model is a joint venture that combines AS Roma’s rich footballing heritage with Fnatic’s industry reputation and expertise. By partnering with a trusted and established esports brand, the Italian football giants were able to enter the esports space safely and smoothly, and take advantage of Fnatic’s extensive network, fan base and industry knowhow.

Partnering with an existing esports team can be attractive for those looking to dip their toe into the vast ocean that is esports, whose waters can often appear unwelcoming and opaque. Moreover, the obvious synergies between sports clubs and FIFA in terms of fan demographic and branding mean that the title can be used as an effective means of engaging with existing fans in exciting new ways.

However, whilst FIFA may be an incredibly popular video game, the title represents only the tip of the esports iceberg. In terms of viewership, FIFA falls short of the likes of  games such as League of Legends, Counter-Strike: Global Offensive (CS:GO) and Dota 2, each of whom boast staggering figures in terms of their global audience and participation. To illustrate the point, it has been reported that the global viewership of the FIFA Interactive World Cup 2017 peaked at 46,703. Compare this to the League of Legends World Championship 2017, which reached a peak global audience of over 106 million.

By investing solely in a FIFA team, sports clubs will only be scratching the surface of the much younger and potentially lucrative global demographic that esports has to offer.

Moreover, only a handful of esports organisations possess a reputation as strong as Fnatic's, and the market for sports/esports partnerships is becoming increasingly competitive. As a result, for now at least, replicating the AS Roma/Fnatic model is an option that is probably limited to  the sporting and esports elite.

NORTH

NORTH is the name for the co-branded collaboration between eleven-time Danish champions, F.C. Copenhagen, and Nordic entertainment company, Nordisk Film.

Established in January 2017, the joint venture currently consists of a five player Danish CS:GO team but has ambitions of becoming a multi-title organisation (like Fnatic) with games, including Rocket League and Call of Duty, highlighted as potential areas of expansion.

F.C. Copenhagen's entry into esports has received widespread praise. This is partly down to the club's recognition of the distinctive cultural identity of the esports industry. Rather than simply lending their name to an esports team, F.C Copenhagen has consciously opted for a more neutral approach with the name NORTH. This not only gives the brand appeal outside of Denmark (something which F.C. Copenhagen have historically struggled with) but it also makes the brand more attractive to sponsors and endemic esports fans who are often sceptical about sports clubs entering into the space without first trying to understand the industry. The team competes under the NORTH banner which, although it features a variation of F.C. Copenhagen's emblematic lion, it is ultimately a distinct brand.

NORTH has also been praised for opting for CS:GO as its primary title, as opposed to FIFA. CS:GO is a top-tier esports title and is also one of the most popular titles in Scandinavia. For clubs looking to maximise their return on investment, it is the games with the largest audiences that sponsors and advertisers look to, and therefore have the most to offer.

However, this can present other obstacles for sports clubs. For example, first person shooters, such as CS:GO, may be considered too violent and  involvement in these types of games therefore comes with a reputational risk. As a result, care must be taken to select a title that is in line with the image that the club (and importantly the club's sponsors) are looking to portray.

Live streams

Before investing significant funds into a new industry, clubs should also consider how they can best utilise their existing assets, including their players – many of whom already have a genuine interest in video gaming. Streaming is an exciting opportunity to offer meaningful engagement with existing fans and to extend the reach of the organisation to a broader demographic.

It is sometimes easy to overlook the fact that some of the best opportunities in esports lie outside of the international tournaments. Live streaming is big business, with the top streamers reportedly earning over $500,000 a month in advertising revenue from platforms such as the Amazon-owned Twitch (not to mention additional income from sponsors).

Tottenham midfielder Dele Alli's recent Fortnite streams on Twitch with England teammates Harry Kane, Kieran Trippier and Harry Maguire is a perfect example of how sports clubs could take advantage of live streaming. Dele Alli attracted tens of thousands of concurrent live viewers, and videos of the live streams have clocked up millions of views on social media.

On a similar note, Dele Alli also partnered with "Ninja", arguably one of, if not the, most popular and influential streamers at the moment. This collaboration demonstrated the power that cross-fertilisation of sports fans and esports fans can have – leading to both personalities boosting their social media followings overnight.

Aside from the impressive numbers, this entry model also requires very little in terms of financial investment as the model is primarily built on the club's existing fan base and the popularity of the players involved.

Conclusion

We have explored only three examples above, but there are myriad ways for clubs to become #esportsready. With so many opportunities available it is not surprising that many find entry into the industry somewhat overwhelming. The option (or combination of options) that works best for a sports club will depend on what they are seeking to achieve by investing in esports.

Whether a sports organisation is looking to appeal to a new demographic, improve fan engagement, diversify revenue streams, planning a new innovative marketing campaign, or any combination of all of these, deciding how to enter the esports industry will require careful consideration. Sports clubs should work closely with professional advisors who understand the esports industry in order to identify their aims and objectives, as this will ultimately inform which entry model is best suited to them.

 

This article was written by Mishcon de Reya Sports Group's Tom Murray & Max Nicolaides

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