Riot Games closes in on landmark streaming deal for e-sports with MLB Advanced Media

League of Legends” developer Riot Games is finalizing a deal to sell streaming rights for e-sports matches to Major League Baseball Advanced Media’s tech unit for close to $200 million over two years, according to sources.

Riot Games puts on an annual global competition for the five-on-five computer battle game, which is played by more than 100 million people each month. The top teams from different regions advance to playoffs, with millions of dollars in prizes at stake.

The matches primarily are broadcast on streaming services Twitch and YouTube and the Los Angeles gamemaker’s website. But the deal, first reported by journalist Richard Lewis and Sports Business Daily, would see the streams shift to an app developed by MLBAM’s BAMTech.

Major League Baseball holds a majority stake in the company, whose streaming technology clients include HBO, Sony and Turner Sports. Disney and the National Hockey League hold smaller stakes.

"This could be a groundbreaking moment,” said Jeff Marks, whose firm Premier Ventures advises on sports deals.

Among other synergies, MLB could boost its own sport by looking at data on how young gamers consume online content, and Riot Games could gain legitimacy with advertisers that baseball has worked with for decades, Marks said.

The pending agreement was confirmed by two people speaking anonymously about the private discussions.

Riot Games, Twitch and YouTube declined to comment. A spokesperson for MLBAM didn’t respond.

Riot Games’ efforts to land a blockbuster media rights deal have been closely followed by the e-sports industry. Though tens of millions of people regularly watch video game matches, efforts to generate profits from their interest are still in the early stages.

Multibillion-dollar broadcast deals have been a big moneymaker in traditional sports, fueling ever-increasing player salaries and ever-fancier stadiums. The e-sports business has sought to go down the same path. But the new talks suggest that Riot Games wants more control than typical broadcast deals, following a route that’s become popular only in recent years. BAMTech develops streaming apps for the NHL, PGA and WWE too.

“Considering Riot's aggressive strategy of vertical integration to better the user experience — they built their own Internet backbone to improve latency — having their own channel, and thereby reducing their reliance on Twitch, is a solid decision,” said Joost van Dreunen, chief executive of consulting firm SuperData Research.

It’s unclear if the app’s users would have to purchase a subscription, but it’s possible that Riot Games could offer a fee-based option with exclusive content or in-game benefits, van Dreunen said.

Also uncertain is how advertising would work on the proposed service. But van Dreunen said there's enough demand among advertisers for the deal to become profitable.

Riot Games would take on major risks if its app becomes the only place to watch professional “League of Legends” games or if a subscription is required. Twitch and YouTube have large existing communities and can draw viewers into a match while they’re perusing other videos. The features could be difficult for a standalone app to replicate.

“If they are cutting people off, is it going to make the game a less popular thing?” said Eliot Kent-Uritam, who follows e-sports as director of media and analytics at ad agency Nice & Co. “What could be the worst long-term thing is doing something that makes people less interested.”

NationBuilder gives everyone a shot at politics. Donald Trump was no exception.

Los Angeles entrepreneur Jim Gilliam did not support Donald Trump’s presidential campaign, but it was his software that helped the president-elect organize massive rallies and gather donations.

Gilliam started developing a program about eight years ago to handle the basic online tasks required by political campaigns. His firm NationBuilder now is the preferred option worldwide for thousands of candidates looking for low-cost technology, including the third-party representatives in this year’s presidential race and eventual winner Trump.

Candidates always draw controversy, but NationBuilder received unprecedented pressure to drop Trump as a customer. Gilliam has disagreed with clients in the past, but never had he felt such disgust with a campaign on his platform. He empathized with peers in the technology industry who have lashed out at Trump.

“It wasn’t easy,” he said about listening to Trump’s policies and remarks on the campaign trail.

But Gilliam and board members, including venture capitalists Ben Horowitz and Sean Parker, refused to budge from the Los Angeles company’s mission to allow for anyone to have a shot at political advocacy.

“It’s a fundamental American value that everyone gets to have their voice,” Gilliam said.

NationBuilder’s software enabled Trump to e-mail supporters about upcoming rallies, sign up volunteers to work those events and raise funds to put them on.

Using NationBuilder helped Trump spend eight times less money than Hillary Clinton on campaign technology, Gilliam said. The savings left Trump with more resources to focus on messaging and advertising, Gilliam said. He can’t pin down exactly how much that mattered to Trump’s success, but he sees how the campaign used NationBuilder’s emails and event-organizing tools to rouse supporters into action.

Gilliam’s pitch is that if more people realize that the basic technology is out there, more will launch a political campaign for whatever their cause is.

“We can’t force people to show up,” he said. “We can’t force people to fight for this bill or run for this office. But I’m doing my best to preach that it’s possible to take that leap.”

NationBuilder hopes to improve its service in the coming years by introducing features that reduce guesswork. For example, rather than assuming the best contacts to send an e-mail to, artificial intelligence or other technology could point users toward the subset that fits best.

“We’re trying to move toward Ikea from Home Depot,” Gilliam offered as an analogy. “You might not be able to build a giant house, but you can do some hard work and it’s absolutely within your grasp. The instructions are there and clear.”

Another major change probably will be offering data storage outside the U.S. for campaigns in other countries to address cybersecurity concerns.

Gilliam declined to comment on whether Trump plans to maintain his NationBuilder account once he takes office.

The company is “barely profitable,” Gilliam said. It expects to stay independent, with an initial public offering of stock potentially being the next opportunity to raise funds for expansion, he said.

Wisecrack looks to a thug, an alien and old video games to explain the humanities

Searching YouTube for “Why is the sky blue?” brings up dozens of short videos trying to explain the science of light in simple terms.

Search the video repository for “To Kill a Mockingbird” and the pickings are much slimmer. Los Angeles online media start-up Wisecrack wants to close the gap.

Founded about three years ago by a team of filmmakers and academics, Wisecrack has been trying to make the humanities more approachable through short and funny online videos. Investors agree that the company is onto something, giving it $1 million in funding.

The financing, announced Tuesday, suggests that people who closely follow the YouTube ecosystem still perceive some coverage gaps. Wisecrack describes itself as a cross between Comedy Central and Discovery Channel, doing for literature, philosophy and other topics what “The Daily Show” and “The Colbert Report” did for politics.

Wisecrack explores “To Kill a Mockingbird” and other literature through what the company describes as a “gangster” character. The narrator describes Harper Lee’s famous tale through terms that would be discomfiting to some, common to others: “alcohol” becomes “juice,” “doing well” becomes “spitting mad game” and “white person” becomes “cracker.” The nearly four-minute “Thug Notes” summary has about 1.5 million views on YouTube.

The show gets criticized for reinforcing stereotypes. But Wisecrack Chief Executive Jacob Salamon says they are inverting tropes, not perpetuating them. The gangster character is meant to come off as brilliant, showing that you can’t judge a book by its cover.

“We … prove this guy in five minutes can say more than a professor in some of the best schools,” Salamon said. “Those who give it that chance beyond the initial shock value get that point.”

Wisecrack uses the pixelated look of old-school video games to discuss philosophical issues. Another shtick is using an alien to explain the hidden meaning in movies.

Company executives say academics have offered more praise than criticism of the projects, noting that the videos could spark viewers to read into the topics further. But it’s unclear whether Wisecrack’s shows can stand up as education tools.

Daily viewers of political satire shows were more likely to tune in for entertainment than to learn about the news, according to a 2010 Pew Research Center survey. And several people who watch popular science-made-digestible videos on YouTube said the knowledge doesn’t tend to stick with them the same way as rote learning in school.

Salamon said the numbers show there’s clear interest in the collision of humor and humanities. Viewership is high among 18-to-34-year-old men.

Salamon said Wisecrack is “on the brink of profitability” through advertising and licensing revenue. With the new funds, it’s now experimenting with how to draw people to Facebook, podcasts, TV and other outlets.

The company said investors include Activision Blizzard executive Steve Bornstein, venture capitalist Allen DeBevoise and entrepreneur Brett Hurt.

Elsewhere on the Web

Santa Monica start-up Mobalytics, which develops software to measure the performance of video game players, received $2.6 million from investors including Founders Fund, General Catalyst and GGV Capital, according to TechCrunch.

Irvine start-up Mavenlink, which sells online project management software through a subscription, received $39 million from investors, according to SiliconAngle.

Snapchat developer Snap Inc. is trying to take over hundreds of thousands of square feet in the Santa Monica Business Park, according to sources familiar with the matter. The Real Deal reported on the talks Friday. The office would be Snap’s second in Santa Monica, where it’s already working to move into space at the city’s airport.

Snap opened a pop-up store for its Spectacles sunglasses in Midtown Manhattan across from an Apple Store. TechCrunch has pictures. Snap said the store would be open through the end of the year, except for Thanksgiving, Christmas Eve and Christmas. But the store could close sooner and hours — unclear at this point — will vary depending on supply. Public records and a source suggest that Spectacles could be sold in many more states, including Nevada and Oregon.

In case you missed it

Snap has filed confidential paperwork with regulators that brings it a big step closer to going public early next year.

Warner Bros. bought out other shareholders of online video company Machinima in a deal that valued the West Hollywood start-up at $100 million.

Hyperloop One reached a confidential settlement to a wrongful termination lawsuit lodged by four ex-employees.

As automakers accelerate spending on developing self-driving cars, they’re devoting enormous attention on what to do with data that those high-tech devices generate — beyond making the drive automated. But the road to such a future could be more treacherous than traditional giants of the auto industry expect.

Coming up

The Technology, Entertainment, Design or TED talks series comes to Los Angeles on Dec. 3 at the Dolby Theatre. Speakers include Jeff Dean, a senior fellow in Google’s research unit specializing in machine learning; Pedro Domingos, a University of Washington professor focusing on machine learning; and Stefano Baldassi, director of neuroscience and analytics at augmented reality headset maker Meta.

paresh.dave@latimes.com

Twitter: @peard33

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