BUSINESS Technology

Owners of the Patriots, Mets and Heat are among founding members of a new video game league

More than 6,000 people waited in a snowstorm to buy New England Patriots season tickets after Robert Kraft bought the struggling football franchise in 1994.

“If the fans really believe you're committed to winning, you have a great opportunity to build a great franchise,” he recalled at an investment conference in Beverly Hills last year.

Kraft, who saved the Patriots from moving and turned them into a perennial Super Bowl contender, is now wagering millions of dollars that New Englanders will get behind him once again. This time, with video games.

The packaging and paper magnate headlines a list unveiled Wednesday of the first seven owners in a new league for the shooting video game “Overwatch.”

More than 30 million people across the world have played the computer and console game — many honing their keyboard clicks so that they can get paid to play. Those ultra-competitors would be the centerpieces of the six-player lineups in Overwatch League.

The effort is unprecedented for e-sports, in which gamemakers including Activision Blizzard, Riot Games and Electronic Arts have begun to test ways to make a business out of the the fast-growing enthusiasm for video game competitions.

Kraft and other owners don’t yet have rosters set. The start of the first season is vaguely described as later this year. And no sponsors or media rights deals have been announced.

But the seven ownership groups are committing to pay $20 million each over the next several years to help build the league. The fees are going to Activision Blizzard, the Santa Monica game publishing company whose Blizzard Entertainment division in Irvine developed “Overwatch.”

Overwatch League’s first franchise owners

Owner Background Region
MeasurementJeff Wilpon Analysts' estimateChief operating officer, New York Mets ActualNew York
MeasurementNoah Whinston Analysts' estimateChief executive, Immortals e-sports team ActualLos Angeles
MeasurementBen Spoont Analysts' estimateChief executive, Misfits e-sports team ActualMiami - Orlando
MeasurementAndy Miller Analysts' estimateChief executive, NRG e-sports team ActualSan Francisco - Sacramento - San Jose
MeasurementNetEase Analysts' estimateChinese online media company ActualShanghai
MeasurementKevin Chou Analysts' estimateFormer chief executive, Kabam ActualSeoul
MeasurementRobert Kraft Analysts' estimateOwner, New England Patriots ActualBoston

Activision Blizzard Chief Executive Bobby Kotick said he and his colleagues tapped owners who had track records of turning players into role models, building great sports venues and creating big fan communities.

“These seven teams are validation that thoughtful, sophisticated people believe there’s value in the Overwatch League,” Kotick said in an interview. He declined to comment on how many more teams might be added before the season kicks off.

The company lured prospective owners with data about how many people play “Overwatch” in their region. Each team will be tied to a specific area.

For instance, the family behind the New York Mets baseball team purchased the New York slot for Overwatch League. The Kraft Group’s team, centered on Boston, will cover about 90% of New England’s population.

Kevin Chou, who sold his mobile gaming start-up Kabam for more than $800 million last year, leads a team set to be anchored in Seoul. Chou and business partner Kent Wakeford said they plan to hire South Korean staff and players and base their new operation there.

Several existing e-sports teams bought slots. Misfits, which counts the Miami Heat and founders of the Syfy TV channel as stakeholders, captured the Miami and Orlando, Fla., markets. NRG, whose owners include “Overwatch” fan Shaquille O’Neal and former baseball star Ryan Howard, got Silicon Valley, San Francisco and Sacramento. Immortals, backed by media, tech and sports moguls, received much of Southern California.

Some potential team owners have held back from joining the league because they’re unsure that the game will grow big enough to bring in promised sponsorship and video licensing deals. Teams get equal cuts of leaguewide revenue, and they get to keep a set amount of revenue from local agreements.

Owners who signed up say they came to terms with the price tag because Activision Blizzard demonstrated that it would address owner concerns.

“In a rapidly changing ecosystem, creating a league that has sustainability as one of its founding principles is something that will offer us one of the more rewarding opportunities in e-sports,” Misfits Chief Executive Ben Spoont said.

For sports team owners such as the Kraft family, e-sports is also a welcome hedge against tepid youth interest in traditional sports. And everyone’s intrigued with the chance to be involved in one of the sporting world’s first global leagues.

“We think localization in e-sports is how you end up at the same level as traditional sports, and you can’t just sit back, you have to get involved in forging that path,” Immortals Chief Executive Noah Whinston said. “But ‘Overwatch’ is a game that has a massive global fan base, so being able to engage all those fans is just as important as being to engage a fan base in Los Angeles.”

Matches are expected to be held in Santa Monica until teams reach deals to host events locally. Immortals, for example, is likely to hold games at AEG’s L.A. Live complex after reaching a partnership recently with the entertainment company. The team, which counts more than 1 million social media followers, is building a training facility in Culver City.

Teams hold their spots permanently, with no risk of a demotion to a second-tier league.

“Our fans can know we’ll be here,” said NRG’s Andy Miller, a co-owner of the Sacramento Kings. “This is our spot.”

Activision Blizzard has hired people away from traditional sports, including the NFL, Fox Sports and the New York Jets, to oversee the e-sports efforts. But Kotick has devoted significant attention to the venture too, including reminiscing with Miller for considerable time about their separate stints working under Steve Jobs.

“They need this to work just as much as we do,” Miller said of Activision Blizzard. “Whether you’re in the league or not — everyone in some way wants this to work, because it’s going to leave an imprint on e-sports.”

For the Kraft Group, the journey to rabid fandom and juggernaut status may be slower in e-sports than in football. But the Kraft Group sees its new team as a long-term holding.

“The league’s meticulous focus on a structure and strategy … clearly represents the future of e-sports,” Robert Kraft said in a statement.

Echo Fox tells players, “You are athletes’

Lakers forward-turned-actor Rick Fox and a Navy Seal Reserve he brought in as guest speaker recently delivered a stern message for video game stars: The players need to start considering themselves professional athletes.

Fox, who co-owns the Echo Fox group of teams in “League of Legends” and other games, made the declaration last Friday at the first gathering in one room of his 41 players. Dubbed FoxCon, the Beverly Hills event gave Fox and his business partners a chance to set expectations for players.

“What I don’t want you to lose sight of is that you are an example for millions of people out there who want to do what you do,” Fox, surrounded by orange and blue balloons to match the team’s colors, told the players, seated in orange chairs. “You have to be responsible and aware.”

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The message resonates deeply in e-sports because most teams don’t spend any time evaluating players on anything besides their in-game prowess. That differs from traditional sports teams, which may run criminal background checks, test mental acuity and run potential recruits through psychological exams. Such processes aren’t a surefire way to screen out players who may become detrimental to the team. But even a tinge of more intense vetting could become crucial as e-sports teams try to land major sponsorship agreements.

Jace Hall, who oversees Echo Fox, said in an interview that he doesn’t want to get “all up in the personal lives” of players. But he wants to hold them out as inspiring leaders in the video game community. And he wants them to feel better about what they’re doing, noting that he believes gamers are held in low regard by society.

“If you saw someone painting or playing music for eight to 10 hours a day, you wouldn’t push the easel down or yank the guitar out of their hands because you know that means something to them and it would cause mental damage if you did,” Hall said.

Yet a parent might tell someone playing on the Xbox to go get some sunshine instead.

Helping remind players that they are indeed professional athletes could lead to increased self-esteem and stronger bonds with the public, Hall said.

“Athlete has a positive connotation,” he said. “It creates an emotional understanding of the investment that goes into their art.”

Walt Disney Co. gets a stake in e-sports team

Burbank-based entertainment giant Disney picked up an indirect stake in Los Angeles e-sports franchise Team Liquid.

The purveyor of teams in “League of Legends,” “Counter-Strike” and other video games is owned by AXiomatic, an investment firm helmed by sports and entertainment financiers Peter Guber, Ted Leonsis and Jeff Vinik.

On Tuesday Disney announced an investment in AXiomatic, which is joining an annual mentorship program for start-ups known as Disney Accelerator. Terms of the deal were not disclosed.

Elsewhere on the Web

  • Snap is among social media companies seeking rights to show highlights from next year’s World Cup, according to Bloomberg.
  • Donut Media, an online media company making automotive-related videos, has signed a deal with talent agency WME, according to Tubefilter.
  • Tech workers who say they’re priced out of living in downtown Santa Monica are advocating for a plan to bring new housing and hotel development to the neighborhood, according to Santa Monica Lookout.
  • Manhattan Beach officials cautiously applauded a move by Los Angeles officials to rescind a road diet that tech workers had blamed for an increase in their commutes, according to the Beach Reporter.
  • Chinese tech giant Tencent is planning to hold an initial public offering of stock for its book publishing division, with a big part of the sales pitch to investors being the possibility of lucrative movie rights deals with Hollywood, according to Reuters.
  • Epic Games, maker of a widely used development technology for video games, and virtual reality arcade start-up the Void are among other participants of Disney’s latest start-up mentorship program, according to the Hollywood Reporter.
  • Lars Windhorst, whose investment firm Sapinda Group is the leading backer of e-sports video streaming service Smashcast (formerly known as Azubu), had his assets frozen worldwide by a judge after a collapsed investment plan, according to Law360.

In case you missed it

paresh.dave@latimes.com

Twitter: @peard33

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