Esports can be confusing for European football executives, or indeed anyone over the age of 35. Most have learned to parrot the lines that ‘esports’ is a ‘growth industry’ and represents ‘the future of entertainment’, but few can tell you exactly why that is.
This becomes a problem when football clubs stray outside their comfort zone of FIFA and Pro Evolution Soccer. Esports is not a blanket term. Some are growing faster than others. Others aren’t growing at all.
Several European clubs have expanded their repertoire by entering professional teams into Rocket League, a vehicular soccer game where cars fly upside down in low-gravity arenas.
The cost of entry is low compared to major esports like League of Legends and the content is instantly accessible. Each game lasts five minutes and there is just one aim: put the ball in the goal.
Rocket League seems a perfect halfway house for football clubs looking to get into ‘real’ esports, providing access to a slightly different group of affluent young males from Europe and North America without straying into violent or controversial territory.
Eight European football clubs have fielded professional Rocket League teams over the past two years as the esport’s popularity and prize money have increased. Since its launch four years ago, Rocket League tournament winners have received over $6.5m (€5.9m) in prize money.
The game’s developer, Psyonix, was recently acquired by Fortnite publisher Epic Games, itself owned by Chinese gaming giant Tencent. Psyonix is also responsible for operating the top two tiers of Rocket League esports: The top-tier Rocket League Championship Series (RLCS) and the second-tier Rocket League Rival Series (RLRS).
Player salaries in the top-tier Rocket League Championship Series range from $3,000 to over $10,000 per month for top players. Combined with earnings from personal sponsorships, donations and advertising revenue from YouTube and Twitch, the first Rocket League millionaire isn’t far away.
There are signs that Rocket League esports could grow exponentially with Epic and Tencent’s backing, but clubs are yet to reap any commercial benefits.
Paris Saint-Germain’s esports department is under pressure from club bosses to find profitable markets. Rocket League is incredibly popular in France and this drove PSG to take part, but it withdrww from the game’s esports scene in August 2019 after four seasons of participation.
SportBusiness Professional understands PSG’s decision was due to limited commercial opportunities and the lack of access to Asian and Chinese markets. The club said this would not be the end of its Rocket League participation, but its esports department had become exasperated at the esport’s slow commercial growth and did not return for this season.
Spanish clubs Getafe and Villarreal also shut down their teams this year. They failed to qualify for the second-tier Rival Series due to a lack of investment in quality players.
Of the five clubs that remain involved in professional Rocket League, AS Monaco and Espanyol have just completed their first full season in the second tier, with Monaco winning promotion to the RLCS.
Swiss clubs Servette and Lausanne have decided to scale back their investment, now choosing to compete in amateur local leagues and tournaments. Servette gained promotion to the RLCS in 2018 but could not agree financial terms with its players, eventually losing its roster to esports organisation Mousesports.
In the current Season 8 of Rocket League esports, Barcelona is the only football club with a team in the top tier. Since the team’s inception in April, Barcelona has earned just under $100,000 in prize money. It is understood between 85 and 90 per cent of this went to the players, on top of their monthly salaries of approximately $6,000-$7,000 per month.
Barcelona’s Rocket League jerseys are not for sale and bear no sponsors. The team earns no centralised or self-derived revenue from sponsorship, media rights or matchday. All regular-season matches are played over the internet with no physical venue provided by either Psyonix or any of the teams.
With the season-ending World Championships to be held in Madrid this weekend, the club would have had the perfect opportunity to showcase its esports involvement to potential endemic sponsors – such as gaming equipment manufacturers and tech companies – as well as to its existing fans in Spain. However, Barcelona failed to qualify for the event, finishing 6th out of eight teams during the regular season and crashing out of the playoffs in the first round.
With little to no benefits in terms of revenue in 2019, the club must now consider whether another six-figure investment can be justified in 2020.
An alien model
As an independent game developer, Psyonix deserves praise for growing the game’s esports scene as much as it has. The first Rocket League Championship Series was held in February 2016 after the developer saw how popular its game had become on live-streaming site Twitch. The initial tournament had a prize pool of $55,000, almost 20 times smaller than at present.
Now that the prize pool stands at over a million dollars, major esports organisations have become a fixture of Rocket League’s esports scene. Cloud9, which received $50m in Series B funding in October, has been a long-time participant alongside other esports stalwarts such as NRG, G2 and Dignitas.
Centralised revenue sharing models are a new phenomenon in esports, restricted to regional and global franchise leagues such as the League of Legends Championship Series and the Call of Duty World League. At present, Rocket League does not drive enough revenue to share among the 32 teams that take part in its top-tier competition each season.
Esports organisations are used to this. Almost every single multi-esport organisation is reliant on venture capital and sponsorship in order to fund their operations, often using investment from one sector to entice more from the other.
Team Vitality, another long-time Rocket League participant, partnered with French car manufacturer Renault for all its activities in anything related to motorsport esports. Renault has been title sponsor of Team Vitality thanks to a two-year deal, covering 2018 and 2019, and the manufacturer’s commitment gave Vitality a platform to secure €36.5m across three rounds of funding since the deal was completed.
In the short to mid term, most investors and their teams are comfortable with the kind of arrangements seen in less mature esports such as Rocket League, in which tournament organisers are responsible for courting participation with large prize pools, while teams are responsible for generating their own revenue.
However, this model simply doesn’t work for elite European football clubs. Firstly, top-level professional football is already a mature market and its competitive nature pushes clubs to spend money rather than grow their margins.
Secondly, elite clubs have existing deals almost every major sponsorship category on the football side of their operations, limiting their options on the esports side of the business.
In addition, clubs face multiple problems when courting esports-specific sponsorships. The prestige these clubs enjoy in the football world does not automatically carry over to esports, making them less appealing to endemic esports brands. Clubs also risk angering football sponsors by agreeing esports deals at much lower price points.
Change must come
Barcelona, PSG and Monaco’s involvement in professional Rocket League has been a huge marketing boost for Psyonix. It has lent their game and esports scene a sense of professionalism and mainstream legitimacy.
But without the prospect of a return on investment – or at least a greater effort from Psyonix to make them feel welcome – football clubs will seek out other esports opportunities. Thus far, the only revenue sharing initiative attempted by Psyonix has been an in-game an esports shop, in which players can buy in-game cosmetic items used by the professional teams. PSG and Barcelona were not part of this initiative.
Industry sources say the lack of sponsors is purely down to the size and culture of Psyonix as a company. It is estimated to have around 200 employees, almost all of which work on the game itself or the smooth running of its esports tournaments.
Now that the company has been acquired by Epic, Rocket League has officially been released in China. Participating teams are hoping Psyonix will develop its esports activity and the competition’s top teams – as well as PSG, Barcelona and Monaco – are said to hope that Psyonix moves RLCS to a franchise-based model with revenue sharing.
However, in October, Psyonix’s vice-president of publishing Jeremy Dunham said that a decision on whether it makes RLCS a franchise league is a “question for another time”, explaining that there is no conclusive proof that such a model is the best way for Rocket League’s esports scene to move forward.
“Football clubs need to have a clear split of revenue from the games publisher,” says one football marketing executive, who wished not to be named. “We can’t just be a means of exposure for them, because who is paying the salary at the end of the month? The club. Some of the publishers are starting to understand that.”
Some, but perhaps not all.