Counter Strike

Esports commentator Richard Lewis provides an insight into the battle on the ground between television broadcasters and the protective consumers of eSports.

The eSports revolution shall not be televised, so we are told.

Years of failed attempts to make the hybrid of gaming and sports suitable for television broadcasts forced the industry to adapt and overcome its problems. Now they have demonstrated that they no longer need television, with live streaming platforms such as Twitch offering a comparable broadcasting experience, but also innovating when it comes to viewer interaction.

This younger demographic doesn’t watch television in the traditional sense anymore and now, in a reversal of what had gone before, the television networks are starting to come calling for eSports.

The viewing numbers for video game developer Valve’s growing eSports title Counter- Strike: Global Offensive broke any previous records by peaking at close to 1.3 million viewers for the ESL (Electronic Sports League) One Cologne tournament. In addition, the viewers consumed a total of 8.9 million hours of broadcasted content. To put this into context, UK pay-television channel BT Sports’ most watched football match – Chelsea’s defeat against Tottenham on New Year’s Day 2015 – had 1.7 million viewers. There is no playing down the significance of eSports viewing figures any more.

The sudden burst of what feels like genuine success has ruled some of the eSports stalwarts to declare that television is no longer needed, that it is an outdated technology with a model that simply doesn’t work when applied to something that organically grew from the internet. These thoughts have been echoed in the eSports press, with respected news sites such as Forbes and The Daily Dot having also published opinion pieces along this line of thinking. It is a view that might play out well and tap into community sentiment, but it might also be an incredibly short-sighted one.

Tobias Sherman, an eSports agent at IMG, has spent the best part of his career trying to bring eSports and television people together. Since his eSports-specific talent agency Global Esports Management was purchased by the talent conglomerate, he has been focused on trying to put eSports on the biggest stage.

He believes that even in an era of new broadcasting methods and technology that this is still television.

“Television is the best way to reach eSports fans that don’t even know they are eSports fans yet,” Sherman told SportBusiness International. “It’s still the best way to broadcast to the masses. Once that is done properly the money comes in on its own.

“I’ve heard publishers and some others say eSports doesn’t need television. Last I checked, many of those same people aren’t backing the cheques that allow teams to exist. Sponsors do that and sponsors want television exposure mixed with a digital presence.”

Sherman, who admits that he has recently been in talks with television networks about original eSports programming, thinks that even the online purists will warm to the involvement of television executives once they see what they can offer.

“It’s a homerun for all involved,” he said. “Publishers, teams and players gain exposure, higher sales and general awareness. The entire industry grows on a conventional level as well as simultaneously innovating in the digital space. Most importantly, the fans themselves benefit from higher production quality and new ways to interact with teams and individual players.

“Television will be a major part of the next leap in eSports. If you build it, they will come. If you build it right, they will stay.”

Show me the Money

However, it might not be an easy alliance to begin with. America’s number-one sports broadcaster ESPN has tried to have its cake and eat it by introducing eSports programming, but playing down how highly they value it.

When asked about their experiments with eSports following coverage of Valve’s The International Dota 2 tournament, often referred to as the Super Bowl of eSports, ESPN president John Skipper said: “It’s not a sport, it’s a competition. Chess is a competition. Checkers is a competition…Mostly, I’m interested in doing real sports.”

This comment came amid a backdrop of traditional sports fans criticising ESPN for covering something they could not understand nor appreciate.

Tellingly, though, ESPN has televised eSports again – most notably Blizzard’s Heroes of the Dorm tournament final. It has also put out an eSports themed-edition of its magazine and – at the time of writing – is advertising for an eSports editor for its website. While they might do all they can to pay lip service to the critics, the direction on a corporate level is quite clear; eSports no longer needs to build its own equivalent to ESPN, the real thing is going has instead come to eSports.

With that fact brings about the question of the finances involved. In 2014, the market for global sports rights was valued at £16bn with most experts concluding there was no sign that bubble would burst. Most sports properties rely on television revenue generated, while broadcasters end up in what seems like perpetual auctions to retain access to their cash cow.

Television is the best way to reach eSports fans that don’t even know they are eSports fans yet

By contrast, eSports has experienced unprecedented growth without a reliance on broadcasting money. A typical eSports organisation generates their bulk of their income from synergistic sponsors whose products are directly consumed by eSports and gaming enthusiasts. Such organisations do receive money from the streaming platform they partner with in exchange for exclusivity, but these rights rarely represent value for money or make a dent in the running costs.

The constant conflict for most seems to be either remain at the industry’s leading streaming service, Twitch, to ensure the maximum reach or to make more money broadcasting on a much smaller platform that may not even survive. For the most part, teams that choose the latter invariably end up back on Twitch anyway, often with a greatly reduced bargaining power.

And yet despite this, the larger eSports organisations have managed to continue to make money and grow across several disciplines at once. Most likely they will welcome these new opportunities, even if it means television networks would be buying their way into eSports cheaply.

Consumer Backlash

So far attempts at exclusivity deals for tournament and competition broadcasting rights have been mostly rejected by the community and professional teams alike. With television being able to offer a compensation package that will eclipse the money currently generated from streaming rights, those rejections could soon change. That is certainly how James Lampkin, vice-president of pro-gaming, product and content at ESL, sees it.

“What makes television rights an important revenue stream in traditional sports is a combination of consumer demand and bidding processes,” he told SportBusiness International. “A television conglomerate that is able to track customer activations and retention against having broadcasting rights to football, for example, can make projections and then afford to spend huge sums of money to secure broadcasting rights.”

In July, Swedish entertainment company Modern Times Group, which boast television channels across Scandinavia and Europe, bought a 74-per-cent stake in Turtle Entertainment – the parent company of ESL – for €78m. Many in the industry have speculated this will likely mean some sort of exclusive broadcasting deal for ESL’s content.

Despite this great payday, television interest has eluded many eSports fans. Yet now that television wants to play seriously, it’s going to be hard for eSports to say no.

Most recent

USTA chief executive Michael Dowse tells SportBusiness how, despite facing multiple unprecedented issues and sharp ratings declines, the organization was able to bring back elite tennis and make a small profit with the US Open. Bob Williams reports

SportBusiness gathered a panel of experts at the All That Matters Online 2020 conference to discuss the challenges being faced in the sports media rights sector.

An upstart daily fantasy company with an unusual name and unconventional approach has quickly risen to prominence by challenging established market leaders DraftKings and FanDuel and striking a large series of team sponsorships.

ESPN is putting on major marketing effort to promote its new media-rights deal with German top flight league while also focusing on wider long-term content initiatives. Bob Williams reports