Why NBA team owners are buying eSports teams

The world of professional sports is starting to get very interested in the world of virtual sports.

Last month, the NBA’s Philadelphia 76ers bought a controlling stake in two eSports teams, Dignitas and Apex, merging them into one group that will field teams in competitive matches of League of Legends (LoL), Overwatch, Counter Strike: Global Offensive, and Heroes of the Storm.

This was a North American first, but it was quickly followed by the purchase of another eSports team by a group that includes several NBA owners and former players including Magic Johnson, Washington Wizards owner Ted Leonsis, and Golden State Warriors co-owner Peter Guber. The day after that purchase, news broke that Stephen Kaplan, who owns the NBA’s Memphis Grizzlies, upped his ownership stake in the new-ish eSports team The Immortals.

Would you like to know why this is happening? This is why:

Money!!!

After the 76ers added video gamers to their portfolio, CEO Scott O’Neil told SB Nation‘s Pete Volk that his team’s organization in the business of “manag[ing] professional sports teams at a very high level” and that it can bring “incredible value to this emerging industry.” In other words, it can make a bunch of talented gamers operate more like a NBA team that sells merchandise, gets broadcast on TV, and makes lots and lots of money.

After all, eSports already has massive tournaments that draw in huge audiences. The professional gaming industry is projected to bring in $493 million in revenue this year. Might we one day get as excited about LoL Worlds as we do about the NBA playoffs and March Madness? People who grew up spending more time on the Playstation than the playground may have very different ideas about which ‘great athletes’ they want to see compete.

At least one American sports figure interested in eSports is wary of investing directly in teams. Mark Cuban, the billionaire owner of the Dallas Mavericks, put money in eSports in 2015 as part of a $7 million round of funding for Unikrn, a startup that allows users to watch and bet on matches, but he told me via email that he’s deliberately avoided investing in teams.

“I haven’t and won’t invest in teams,” Cuban wrote. “Right now it’s a gold rush to buy and sell and build teams. That’s creating a confused market. But more importantly, I’m worried about how quickly players burn out. It’s a grind to keep up and to become great. Particularly at LoL. I know teams are trying to do more, but the number of hours involved is a real concern for me. I’m not closing the door, but it’s not something I would pursue right now.”

He’s not wrong about burn-out. Professional gamers have a tendency to have quick, intensely competitive careers at a relatively young age (read: in their 20s), and then retire. But Cuban’s concern about the grind, likely motived by whether it’ll affect the value of teams, hasn’t stopped other figures, particularly former players from the NBA and other professional sports leagues, from investing in them. In March Shaquille O’Neal and recently retired New York Yankee Alex Rodriguez were two of several investors who put money into NRG eSports, which fields League of Legends and CounterStrike: Global offensive teams. (O’Neal has also been a minority owner of the Sacramento Kings since 2013.)

Why are NBA owners in particular getting into this? It’s hard to say for certain. There are more ultra-wealthy NBA owners than in other leagues, but only barely: the league has 20 billionaire owners this year to the NFL’s 19, and the NHL’s 10. Ultimately, they are investors hoping that the booming revenues from the eSports sector will continue to boom, and they’ll get to reap the profits.

So, to recap:

Ethan Chiel is a reporter for Fusion, writing mostly about the internet and technology. You can (and should) email him at [email protected]