Esports Franchises Attract Another NFL Owner
A focused crowd watches the big plays and big personalities battle on a virtual field as analysts give the play-by-play at the 2018 League of Legends All-Stars event, held in one of the first esports venues at the Luxor hotel in Las Vegas.
Esports franchises are big business beyond gamers and the Wilf family, owners of the Minnesota Vikings, is getting in on the action.
Through Wise Ventures, the investment firm founded by Vikings owners Mark and Zygi Wilf, they’ve inked an agreement with Activision Blizzard to launch a Minnesota-based team in Activision’s Call of Duty league. Play in the first-person shooter league is expected to begin next year, with franchises also announced in Atlanta, Dallas, New York, Paris and Toronto, with more on tap.
“Esports and competitive gaming has clearly emerged as a major force in the sports and entertainment industry,” said Jonathan Wilf, an ownership partner and son of Zygi Wilf, in an announcement of the agreement. “We have explored various opportunities in esports over the past few years, and we believe the new Call of Duty esports league is well positioned for long term success.”
As FT’s Nicholas Upton reported in our June/July cover story, “While it might be ‘just video games’ to some, the esports industry generated $655 million in revenue in 2017 and grew by 32 percent to $865 million in 2018, according to Newzoo, a major provider of esports data and analytics. According to the firm, the industry will crest $1 billion in 2019. For some context, the NFL brought in an estimated $14 billion in 2017 and the NBA pulled in $7.4 billion. In 2018, the MLB brought in $10.3 billion in revenue.”
The 2018 League of Legends World Championship drew 99.8 million unique viewers, nearly half during the live competition. The first-ever Overwatch world finals drew 10.8 million viewers.
There’s no traditional FDD, but a franchise fee of about $10 million for League of Legends and $20 million-plus for Overwatch (Activision Blizzard also franchises Overwatch teams) gets viewership rights much like a traditional sports team. ESPN reported earlier this year that the franchise fee for the Call of Duty league is $25 million.
Fellow NFL owners Robert Kraft of the New England Patriots and Stan Kroenke of the Los Angeles Rams have esports franchises in Activision Blizzard’s Overwatch league.
Operations of the Minnesota franchise will run out of the Innovation Center building on the 200-acre Viking Lakes campus in the Minneapolis suburb of Eagan where the football team practices. Brett Diamond, previously the Vikings' director of partnership strategy, will oversee operations as COO of Wise Ventures’ esports organization.
“We look forward to engaging with the gaming community in Minnesota and the broader region to create a first class fan experience,” said Diamond. “Under the leadership of the Wilf family, we will bring the same level of dedication and long term vision to building this organization that you have seen with the Vikings over the past 14 years.”
Also joining the ownership group as an investor is Gary Vaynerchuk, CEO of VaynerMedia who was also the 2019 keynote speaker at the International Franchise Association’s annual convention.
“Having been on the sidelines and watching the gaming industry evolve and grow, getting involved with Activision Blizzard and the future of Call of Duty, along with the leadership and vision of Bobby Kotick this was the perfect recipe for me. Excited to bring value to the entire gaming landscape for years to come,” said Vaynerchuk. Bobby Kotick is CEO of Activision Blizzard.
The esports organization will be operated as a separate organization from the Vikings NFL team. “Our goals are to create an environment for sustained success in both the competitive and business operations. In the coming weeks, we will begin the process to hire a general manager to build out our competitive roster,” said Jonathan Wilf.
Fellow pro sports team the Minnesota Timberwolves launched an esports team earlier this year that competes in an NBA 2K league with other NBA teams.