Why would the 2017 NBA champions be spending millions of dollars to start a League of Legends team? To learn more about streaming, of course.
According to Golden State Warriors assistant general manager Kirk Lacob, the team’s acceptance into the North America League of Legends Championship Series through its new Golden Guardians team, signals an effort to not only access a younger, global fan base, but also to learn more about the way esports are consumed.
“It’s a totally globally-connected ecosystem,” said Lacob, the son of Warriors CEO Joe Lacob, in a recent interview with SportTechie. “When you look at esports as a whole, it’s incredibly young, yet massively huge. We need to capture some of that same magic on the basketball level going forward, but we also thought we could learn from it as world shifts the way it consumes.”
While the NBA is among the most innovative major sports leagues, it is tackling many of the same problems as other leagues, including a demographic of younger fans that are demanding streaming options as they cut the cable cord.
Thanks for all the support! We’re thrilled to be joining the #NALCS! #GGSWIN pic.twitter.com/MDo42QIZdM
— Golden Guardians (@GoldenGuardians) November 21, 2017
One way the NBA is addressing this is through the creation of the NBA 2K esports league, which begins in 2018 and will be based around Take-Two Interactive’s basketball video game with 17 participating teams owned by professional basketball teams, including one owned by the Warriors.
But some team owners — including several of the Warriors’ owners — have taken it upon themselves to invest in esports that aren’t related to their respective sports, such as multiplayer online battle games like League of Legends.
Warriors owner Peter Guber, for example, invested in a company earlier this year called aXiomatic that has a stake in the Team Liquid, a League of Legends team that will also be competing in the North America Championship Series. Venture capitalist and Warriors owner Chamath Palihapitiya has a minority ownership share in Cloud9, another League of Legends team competing in the series.
Philadelphia Flyers governor and parent company Comcast Spectacor CEO Dave Scott, New England Patriots owner Robert Kraft, New York Mets Chief Operating Officer Jeff Wilpon, and Los Angeles Rams and Denver Nuggets owner Stan Kroenke have all acquired teams in another city-based esports league based on Blizzard Activision’s team-based multiplayer online first-person shooter video game Overwatch.
What may be shocking to some is how much these owners are paying to play in esports: usually in the millions of dollars. The Golden Guardians are responsible for a $13 million entry fee for the League Championship Series, with $8 million of that required to be paid upfront, according to ESPN. A franchise fee for an Overwatch League team reportedly cost $20 million.
But for investors and owners of traditional sports teams, such as the Lacobs, the potential reward for playing in the esports big leagues is worth the million-dollar bet because of the possibility of unlocking new streaming technologies and younger, non-traditional fan bases.
“When we think of streaming in terms of the NBA, we think of it as a secondary way to view a game, static streaming content. What’s interesting about esports being endemic to streaming is they’ve figured out a lot more of how people like to view media,” Kirk Lacob said. “It’ll be interesting to learn how these various streaming platforms work, how we’re able to work with fans and engage them in different ways, and out how to make things work across international borders.”
Due to a conflict of interest with Warriors co-owners Guber and Palihapitiya, the Lacobs will operate the Guardians through GSW Esports LLC, the basketball franchise’s esports investing group that oversees all of the brand’s esports activities, including NBA 2K.