Pro gaming benefits can play both ways
Chris Overholt made the transition from traditional sports to esports, leaving the Canadian Olympic Committee to head a new Toronto-based professional video game franchise set to launch on Wednesday.
The veteran executive is committed to his new role at OverActive Media, which just received $21.5 million in equity financing from a group of investors that includes Pittsburgh Penguins co-owner Sheldon Pollack. But he doesn’t kid himself about whether esports competitors are athletes in the traditional sense. He acknowledges they aren’t.
The U.S. government treats them as professional athletes for visa purposes, though.
Debates still percolate online about whether the effort and dedication required to become a pro gamer qualify as athleticism. But there’s no debating the growing role video games are playing in the modern sports industry. Esports circuits such as the Californiabased Overwatch League are growing quickly, attracting investment from established pro sports teams and hiring upper management types such as Overholt to run franchises.
Disney broadcasts the Overwatch League on several of its platforms, including ESPN, and last year the NBA launched NBA 2K, a league based on the popular video game that has grown to 21 teams.
What’s the allure of video games to pro sports outfits? Overholt says it’s the same as traditional sports: big audiences and sponsorship dollars. According the research firm NewZoo, sponsors spent nearly $700 million on esports in 2017, and are projected to spend $1.49 billion annually by 2020.
“That number is on par with the NFL, a league that’s 100 years old,” Overholt said. “That’s the reason that I and all of us that are attached to esports are excited right now. There’s a market opportunity here.”
The term esports describes high-level competitive video gaming. Sport simulation games such as NBA 2K fit the description, as well as nonsport games such as Overwatch, Call of Duty or League of Legends. These games are often contested at a pro level and increasingly treated with pro sports levels of seriousness. When the Overwatch League’s Seoul Dynasty finished eighth among 12 teams, ownership fired the coaching staff.
Overholt says the inaugural version of Toronto’s Overwatch League team is already in training camp, along with their coaches, advisers and even a team chef. Last year, the NBA had an entry draft and pay scale for its 2K league players. Firstround picks earned $35,000 for last season, while later picks grossed $32,000. When the 2K competition launched last spring, NBA commissioner Adam Silver said the league took the new circuit as seriously as it did on-court competition in the NBA, WNBA and G League.
“From the NBA’s standpoint, it’s our fourth league,” Silver told reporters at last April’s NBA 2K draft. “That’s exactly how we’re treating it: one more professional league.”
Silver’s philosophy on esports resonates locally, where MLSE clued into its popularity in the summer of 2016. That year the League of Legends summer championship brought 30,000 spectators to the Air Canada Centre over a two-day span. The crowd size prompted the building’s owners to start researching esports and determine whether it was a fad or a business worth pursuing.
Two years later, three of MLSE’s four pro teams are involved in esports ventures, and the company has hired staff to run those initiatives.
MLSE executives points out that while esports franchises benefit from links to pro sports teams, esports has shown traditional sports teams how to navigate social media and the digital world more effectively. The Raptors NBA 2K team, Raptors Uprising, reached the quarterfinals and built the league’s biggest online viewership.
On Sunday, the Maple Leafs hosted their first Gaming Day, with fans facing Leafs players in EA Sports NHL 19, and members of the pro gaming collective FaZe Clan playing the popular game Fortnite.
“It’s an amazing time to see how fan engagement is working in esports,” said Sumit Arora, MLSE’s senior director of strategy. “We’re excited to see how much we can learn (from esports) and bring them back to pro sports … We’re helping each other grow in many ways.”
Experts say that while the success of competitive video gaming isn’t new — the League of Legends final sold out the Staples Center in Los Angeles in 2013 — the audience is growing quickly. This year’s Overwatch League final drew a reported 11,000 spectators, paying as much as $200 U.S. a ticket, to Brooklyn’s Barclays Center, while TV and online broadcasts drew a combined average of 860,000 viewers per minute. “Those are numbers that would eclipse most regional sporting franchises, for sure,” Overholt said. “It’s pretty mindblowing, and this is the reason it’s so interesting to the sponsors … It’s a captured audience that’s engaged and completely fanatical about the content that they’re watching.”
While the term esports refers to a broad cross-section of video games, executives are cogni- zant that audiences aren’t a monolith. Each game under the esports umbrella constitutes a different sport, each with its own stars and followers. So while an outsider might view all esports as one entity, to the esports community Call of Duty and Overwatch are as distinct as hockey and baseball.
Either way, recent growth has been hard to ignore. The Overwatch League started with 12 teams for the 2018 season, and will grow to 20 — including the Toronto-based expansion franchise — in 2019. The following year, Overholt says, the league hopes to grow to 28 teams, then hold steady. But pitfalls remain.
Last week, Infinite Esports, part-owned by Texas Rangers co-owner Neil Leibman, laid off president Chris Chaney along with 19 other employees. When questioned by the Sports Business Journal, new president Ryan Musselman offered a simple explanation. “We grew too fast,” he said. Overholt says the Toronto operation is growing more cautiously. Right now it comprises just four besides players and coaches, and he doesn’t foresee expanding beyond eight next year. But long-term, he envisions OverActive evolving into the MLSE of esports, owning franchises in several areas and becoming a permanent presence on Toronto’s sports scene.
“This isn’t just arriving. It’s already arrived,” Overholt said.