On Sports and E-Sports

Licensing deals in the e-sports arena remain fairly limited, both in number and in scope. But e-sports—a term that refers to professional competitive video gaming—continues to progress commercially, likely setting the stage for more and bigger licensing agreements down the line.

One recent development of note is that traditional pro sports organizations are increasingly supporting e-sports by forming leagues and teams. Not only will these traditional sport-connected e-sports franchises boost awareness for pro gaming, but they will be able to capitalize on their sponsors’ deep experience with, and infrastructure for, licensing.

European soccer has been a hotbed of such activity, with a number of clubs and governing bodies forming e-sports teams and leagues focused on Electronic Arts’ FIFA soccer titles. The Netherlands’ Eredivisie soccer league launched an e-sports league with all of its 18 teams participating. French clubs formed the Orange e-LIGUE, while Spain’s teams introduced the Virtual Football Organization. The German Football League registered a trademark for eSport Bundesliga last year, suggesting it may move into the space soon.

Individual clubs form e-sports teams to compete in each of these leagues, sometimes in partnership with established e-sports companies. AS Roma, for example, launched a team with e-sports powerhouse Fnatic.

In the U.S., the NBA formed an e-sports league that is expected to start play in 2018, in partnership with Take-Two Interactive Software, its interactive gaming licensee. Similar to the situation in European soccer, the NBA’s individual franchises will operate the teams that play in the league. In December, the Houston Rockets became the first NBA team to hire an executive dedicated to e-sports development.

The NHL has said it is mulling over the idea of launching a similar league with EA, which serves as its video game licensee, although there are no definite plans yet.

Meanwhile, several pro sports team owners have demonstrated an interest in e-sports individually. Wes Edens, owner of the NBA’s Milwaukee Bucks, founded an e-sports franchise called FlyQuest, which competes in the North American League of Legends Championship Series. A couple of NHL owners have invested in e-sports clubs, including Ted Leonsis of the Washington Capitals, with Team Liquid, and Jeremy Jacobs of the Boston Bruins, with Splyce.

E-sports fans are a growing group, representing 14% of U.S. consumers aged 13 and over in 2016, according to Nielsen, up from 8% in 2015. And e-sports fans tend to have an affinity with traditional sports. Nielsen estimates that 52% of e-sports fans also are avid NFL fans, 45% are NCAA football fans, and 39% each are MLB and NBA fans. Significant numbers also closely follow NCAA men’s basketball, NASCAR, MLS, and NHL, as well as combat/fighting sports and European football.

In our next post (Monday, April 3), we will take a look at another aspect of the commercial development of e-sports, namely the increase in sponsorship deals in core categories such as gaming accessories, apparel, and energy drinks, and how they are likely to presage further e-sports licensing activity.

For our previous coverage of e-sports and licensing, see our posts from August 25, 2016, and December 19, 2016.

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