Basketball legend Michael Jordan will invest in the Los Angeles-based e-sports ownership group aXiomatic Gaming, pushing his business empire into the ever-expanding digital sports industry.
The company declined to announce the value of Jordan’s investment, but said it comes during a $26-million round of Series B funding. The round is being led by Jordan, investing thorough his family office, and Declaration Capital, the family office of Carlyle Group billionaire co-founder David Rubenstein.
It also comes as e-sports' popularity is booming and professional gamers can make millions of dollars in international competition. AXiomatic Gaming owns the professional-gaming franchise Team Liquid, whose European team won The International 2017 tournament for the popular game title “Dota 2,” an event that featured an $11-million purse.
But analysts say e-sports' largest upside comes in the consumer and audience market, where American customers alone spent $29.1 billion on video game content in 2017, according to the Electronic Software Assn. trade group.
Team Liquid got an early foothold in the industry nearly two decades ago in South Korea, where the popularity of “StarCraft” contests turned video gamers into well-paid celebrities. In more recent years, competitions have spread to the U.S. and beyond, packing audiences into venues like Madison Square Garden. Forbes recently valued Team Liquid at about $200 million.
AXiomatic, which was part of Walt Disney Co.’s 2017 accelerator program, also has invested in the e-sports coaching platform Gamer Sensei and local tournament organizer Super League Gaming.
Jordan, principal owner of the Charlotte Hornets, is not the first NBA great to invest in aXiomatic. Lakers legend and current president of basketball operations Magic Johnson, who also owns part of the Dodgers, is a major investor. The firm’s ownership group includes Dodgers and Golden State Warriors co-owner Peter Guber, Washington Wizards and Capitals' owner Ted Leonsis and Tampa Bay Lightning owner Jeff Vinik.
Leonsis and Karsh led the way in recruiting Jordan and Rubenstein, aXiomatic co-founder and Chief Executive Bruce Stein said in a phone interview. Those talks began over the summer, Stein said, as both Rubenstein and Jordan expressed interest in investing in e-sports but wanted advice on finding the right partners.
Leonsis and Jordan have a relationship that extends back to Jordan’s NBA days, when Leonsis helped recruit him to the Washington Wizards as a part owner and player following his retirement from the Chicago Bulls.
“It’s all kind of a new ‘Star Trek; journey and you have to pick the ship you want to join,” Stein said. “That’s how they went about their own analysis.”
AXiomatic investors courted the pair for their “intellectual capital,” Stein said. As the gaming industry expands and the capital market grows increasingly sophisticated, Rubenstein and resources from his family investment firm Declaration Capital can help steer aXiomatic financially.
Jordan, namesake of Nike’s Jordan shoe and clothing brand, brings insight into content creation, Stein said, and building a sports franchise.
“AXiomatic is a platform for building the e-sports and video gaming audience and ecosystem. Our ideal investors are people who bring something that we don’t already have,” he said. “With David and Michael we get two very unique perspectives that we don’t get anywhere else.”
Stein said aXiomatic had not discussed co-branding opportunities with Jordan, such as outfitting Team Liquid’s squads in Jordan brand gear, but called it “an exciting place for us to explore.”
“Michael is the ultimate competitor and he’s curious,” he said. “Bringing his competitiveness and drive to our group is important not just from the esports part of it, but from the audience part of it, because he knows how to engage an audience."
Jordan, who retired for the final time in 2003, became a minority investor in the Hornets — then called the Bobcats — in 2006 and bought the rest of the franchise in 2010. In addition to his work with Nike, he’s an investor in the global sports data firm Sportradar, alongside Leonsis. He also has backed the hiring start-up Gigster and headphone maker Muzik.
Bloomberg contributed to this report.