Why L.A. tech, media and financial executives are buying an eSports team
The professionalization of eSports continues.
Top finance, technology and media executives in Los Angeles pooled their money to buy professional video-gaming franchise Team 8, they announced Wednesday. They bring new credibility to the fast-growing competitive video game circuit. Championship events with $1-million prizes now regularly sell out major arenas, and well-known advertisers are negotiating sponsorships. But ownership scandals, concerns over player treatment and other crucial issues are capturing headlines as the industry booms.
The new ownership group wants to use its expertise to help chart a “healthy” path. And there hasn’t been a group quite like Immortals LLC, which includes Lionsgate movie studio executive Peter Levin, Memphis Grizzlies basketball team co-owner and Oaktree Capital Chairman Steve Kaplan, XPrize Chief Operating Officer Paul Rappoport and the venture capital arm of rock band Linkin Park.
They’re changing Team 8’s name to Immortals as part of the purchase from former pro gamer Eric Ma. Terms of the deal were not disclosed, but people with knowledge of the industry say most franchises are valued in single-digit millions.
In recent years in the U.S., hardcore gamers have banded together as teams and moved into houses to train together with the help of coaches, managers and even doctors. They’ve secured investors, mostly from gaming, and sponsors to fund their operations. Leagues are organized similar to traditional sports, with weekly matches followed by a postseason. Teams of usually up to five players sit at computers playing games during matches.
Clinton Foy, who cobbled together Immortals and is its chairman, wants to create the “next-generation franchise.” The Los Angeles venture capitalist said the goal is to create teams in several different competitions. Through media rights deals, sponsorships, ticket sales and more, Immortals should become profitable.
“We’ve all been following the rise of eSports, and at its core we all love it and we saw its potential,” Foy said.
Foy acted independently of Los Angeles investment firm CrossCut Ventures, where he is a partner. CrossCut has invested in eSports companies making games, video streaming technology and fantasy sports software.
But Foy said those start-ups need teams that captivate fans to succeed, and that’s the bet he’s making with Immortals. The team, which for now participates only in popular computer game “League of Legends,” will be based in Los Angeles.
Levin, president of Lionsgate Interactive Ventures, helped strike a deal with chipmaker AMD to become an Immortals founding sponsor.
Other investors are Allen DeBevoise, chairman of online video network Machinima; Gregory Milken, managing director at venture capital firm March Capital Partners; Brian Lee, chief executive of consumer product company Honest Co.; and Akinobu Yorihiro, U.S. CEO of Japanese entertainment company Yoshimoto Kogyo.
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