With the inaugural season of the Overwatch League set to begin Jan. 10, the eyes of the esports world are on the league that has an astronomical buy-in for esports of $20 million per team. The Overwatch League does many things differently than traditional esports leagues. To start, the teams are franchised and spread out around the globe, from Shanghai to London to San Francisco.
Andy Miller is the CEO of NRG Esports, the organization behind the San Francisco Shock, one of the 12 franchises in the Overwatch League. He is also an owner of the Sacramento Kings, but he doesn’t include himself in the list of pure sports owners investing in the Overwatch League. “I’m more of a hybrid,” Miller said. “I’ve been an owner in traditional sports for four-five years and an esports owner for three.”
The NRG investor list consists of a slew of athletes who have been household names for over a decade. Shaquille O’Neal was an early investor alongside Alex Rodriguez, who recently doubled-down and secured a spot on the board of directors. In the last round of financing, A-Rod brought girlfriend Jennifer Lopez into the organization.
Michael Strahan and Marshawn Lynch have both invested. So have former Philadelphia Phillies teammates Ryan Howard, Jimmy Rollins and Marlon Byrd.
“Once they understand everything that goes into being an esports athlete and what the parallels are to sports, they are in,” Miller said. “The pressure and communication and training and commitment that these (esports athletes) go through is incredible.”
The debate of whether or not esports are sports roars on, but with so much money coming into esports from traditional sports, the two industries continue to overlap. Players, owners and even teams have invested in the highest level of esports. According to Miller, the athlete designation used to matter more to esports professionals than it does now.
“You can call it a game or a sport, it doesn’t matter,” Miller said. “When you play the game, you realize what a high level these pros are playing on. A level you can never get to, a level of skill, decision making, concentration, reflexes, all the things that go into sports. They have the respect (of the athlete investors), and that is all the esports pros really care about.”
Welcome to the Family @JLo @MoneyLynch and @MichaelStrahan
pic.twitter.com/zoOl35Ll0C
— NRG Esports (@NRGgg) September 28, 2017
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The Overwatch league resembles traditional American sports leagues in a way that past esports leagues did not. The two-year contracts and geo-localized franchises allow for the ability to build a brand behind the same core.
“There is real structure now,” Miller said. “The Krafts and the Kroenkes and the Wilpons wouldn’t have invested in the Overwatch league if it was too hard to monetize the audience.”
All of those owners saw something in the Overwatch League and decided this was the opportunity to jump into esports. And there are elements of traditional sports as well.
The Overwatch League Player Agreement includes teams signing players to one-year guaranteed contracts for a minimum salary of $50,000 with the option to extend the contract for an additional year. Health insurance and a retirement savings plan are provided. Teams distribute at least 50 percent of team performance bonuses to the players.
“We definitely took a look at how things were running in esports, in terms of how we treat the players, the contracts, the nutrition, the training,” Miller said. “Just taking the whole idea of a traditional sports lens and seeing how different it was in esports.”
A large part of the traditional sports lens is city-based franchises. Having localized teams makes sponsorships easier to sell and fan bases grow naturally.
“The previous (esports) model was much like the Pro Golf Association (PGA), you can spend a bunch of money to get a team, hopefully your team does well and you get a share of the prize money,” Miller said. “There’s no stability, you don’t own anything. Someone could come in next month with more money and buy your players out. With Overwatch, you can build into the future. It’s a hefty price tag but now we own Northern California, Sacramento, Oakland, San Jose.”
In most cases, fans of golf are attracted to players, not the organizations that sponsor them. Esports operates in a similar fashion. Fans will often have favorite players or teams in specific esports but that association rarely carries to an overarching love of all the teams of esports organizations like NRG or Cloud9.
“In Sacramento, we lost DeMarcus Cousins. When he got traded, I don’t think we lost many fans in Sacramento,” Miller said. “They bleed purple. It is hard to create that connection when the team doesn’t have a real home. Now we can have that with the Overwatch League.”
When Miller originally founded NRG with Gerard Kelly and Kings co-owner Mark Mastrov in 2015, the Overwatch League was a long way away. In fact, Blizzard Entertainment wouldn’t release the game until May 2016.
“We were optimistic and hoping something like the Overwatch League would come along and move the needle closer to a traditional sports model,” Miller said.
Now that it has, the success or failure of the Overwatch League will have lasting ramifications into the future of esports. Still, regardless of the outcome of the Overwatch League, esports and sports will continue to merge as owners see an opportunity to engage with the esports demographic.