Why NBA Teams Are So In Love With Esports

Why NBA Teams Are So In Love With Esports

From the Golden State Warriors to the Milwaukee Bucks, esports teams are springing up alongside NBA franchises Glixel

Seeking a new audience, the NBA is rushing to capitalize on the popularity of pro gaming by building or buying teams

Seeking a new audience, the NBA is rushing to capitalize on the popularity of pro gaming by building or buying teams

On January 20, the Philadelphia 76ers and Miami Heat played a game of Heroes of the Storm.

Okay, that’s not exactly true. Those are two NBA franchises, and currently their name is only emblazoned on the players they put on the hardwood. But they are two of the first major sports franchises in North America taking a leap into esports. Last September, the 76ers acquired the venerable pro-gaming organization Dignitas, and on January 11, the Heat bought a significant stake in Misfits. Two weeks ago, the teams played each other under the watchful eyes of their new owners in Blizzard’s Heroes of the Storm Global Championship bracket. Misfits swept the series, three games to zero.

"Dignitas vs. Misfits, The 76ers vs. Miami Heat. At first it seemed a bit surreal," says Misfits team captain Markus "Blumbi" Hanke, shortly after the match. "But the gaming and esports industries' growth rate is just as surreal. It’s a thing we all have to get used to."

Once upon a time, the NBA was envisioned as an extension of the college game – local, tape-delayed derbys for a niche audience divided neatly by major metropolitan areas. But our globalized world has steadily expanded the plurality of professional sports. Today, the Houston Rockets routinely emblazon their jerseys with Chinese lettering to build their brand across the Pacific, the LA Kings routinely start Twitter beef with rival teams, and the MLB is inking streaming deals with Riot Games – which boasts the world's most played esports game, League of Legends. The goal today is to expand beyond the civic pride of your city’s center and turn your franchise into a borderless juggernaut. In that sense, esports is a natural fit.

"It’s the wild wild west right now. When we talk about our business plan, and how to leverage this business deal with other businesses around esports, it always starts by saying ‘if there were no rules in the NBA, what would we do?,’" says Scott O’Neill, CEO of the 76ers. "I’ve been in this business for 20 years and I’ve been so conditioned to think around rules and regulations and conditions, and territories. You almost have to rethink and redefine how we look at a sport. To me, that’s the intoxicating part of seeing this come together."

The NBA’s interest in esports stemmed from an Association-wide meeting between team owners and commissioner Adam Silver in 2016. Silver encouraged the NBA braintrust to tap into the pro gaming industry as soon as possible. "He said ‘you guys, open your eyes, here’s what’s coming. This is the future and it’s coming right now," says O’Neill.

It certainly left an impression. A cabal lead by Warriors owner Peter Gruber and Wizards owner Ted Leonsis purchased the controlling interest of Team Liquid, Grizzlies co-owner Stephen Kaplan increased his stake in The Immortals, and Milwaukee Bucks co-owner Wesley Edens broke ground on a new $2.5 million esports brand called FlyQuest. Add that to the 76ers and Heat investments, and there are currently six teams in the league with some sort of corresponding esports affiliation.

O’Neill says he was attracted to Dignitas for the longevity of the brand. "We love that it’s been around for 13 years," he says. "that’s like 400 years in basketball years!" But he also sees the investment as essential to survival in an increasingly diversified cultural media diet.

This stuff just smacked us in the face

"The world is changing, we all know that. We’re following the cord-cutters, we’re following the changing buying patterns in millennials, we’re following the change in how consumers take in content," he says. "As a business, we have to understand that. This stuff just smacked us in the face. They built an audience so organically, so naturally, and so under-the-radar, it was a big eye-opener."

There are other obvious reasons, too. The NBA’s audience skews younger than every other North American sports league, which makes an esports marriage pretty natural. You also can’t underestimate a corporation’s willingness to take advantage of fairly low-risk, high-reward chances. Esports still isn’t profitable – even Riot Games takes a hit on League of Legends’ massive competitive scene – but the industry continues to grow exponentially. Franchises have very little to lose by throwing their name into the sweepstakes.

"I hate to use the word empire, that sounds medieval, but it’s a growing property and it’s a lot of fun," says O’Neill. "In terms of esports itself, we have so much to learn. It reminds me of UFC, just in terms of that crazy growth. The business is not there yet to support it, which I’m sure was the same with the early days of UFC, but the audience is huge, we love the demographics, and we’re competitive folks. This is a competitive group that loves what we’re doing."

But frankly, the most intriguing storyline for the future prospects of the NBA’s flirtation with esports is the potential to get matches and teams in front of a whole new audience. While we’re still in the early days, the Sixers are already promoting Dignitas at live games, and the Delaware 87ers (the 76ers minor league affiliate) wear the team's logo on their jerseys. The idea too that rivalries could travel between, say, the Wells Fargo Center and Summoner’s Rift is a potentially lucrative one and a huge step toward the mainstream acceptance that esports has been craving.

European soccer clubs like Schalke 04 and Paris Saint-Germain have their own esports teams. As far as I know, they are also wearing the same jerseys as the soccer players.

"On the one side, it is crazy to imagine that I might be playing video games in a Miami Heat jersey one day but on the other side it does not seem that far off anymore in today's world," says Hanke. "European soccer clubs like Schalke 04 and Paris Saint-Germain have their own esports teams. As far as I know, they are also wearing the same jerseys as the soccer players. I honestly don't know if esports and sports franchises should be separated or merged. I think either way, it’s smart to invest into esports nowadays, and the future will tell what kind of investments work."

As for O’Neill, he’s quickly learned that Dignitas is offering him access to markets all over the world. By bringing the esports brand into the fold, he has direct access to China, South Korea, Europe, and many other places that probably aren’t familiar with the rich lineages of ballers like Julius Erving and Allen Iverson. "It wasn’t one of the core specific reasons we did the deal," he says. "But it’s becoming very apparent that it’s walking us into new avenues."

But on a more human level, it’s great that these franchises are providing some solid ground for professional gamers. Hanke is 23 years old and has only been playing Heroes of the Storm professionally since early 2015. In under two years, he’s logged time on five different teams, landing on Misfits last August. Stability is hard to come by in esports, and while there’s a chance that the Heat deal goes belly up, or the Heroes of the Storm pro scene stagnates, or the Misfits squad becomes noncompetitive, for now he has the backing of a $4 billion franchise. The sooner esports talent is unilaterally blessed with employee dignity and security, the sooner the industry will bloom.

"I know the general uncertainty in the scene, " Hanke says. "When you are a professional athlete or player at any kind of competition, you have to be aware of the fact that you can fail, no matter the hard work and dedication you put into reaching your goals. I do agree that an investment can make you feel more secure. Those investments professionalize esports, and that's what we need!"