Sponsorship Is Key To Esports Industry’s Growth


Esports industry revenues are expected to grow from $655 million in 2017 to $905.6 million in 2018 with 40% of those dollars coming from sponsorship. Despite this success, potential esports sponsors still have several questions particularly from companies that are non-endemic to the space. As Seven Leagues senior consultant Charlie Beall states, “You can sponsor players, who are often young and commercially naïve; a team, whose managers who are equally young and commercially naïve; or a competition, which have few trustworthy and established players.”

Some of these concerns articulated by Beall are rapidly diminishing as seen most recently by the success of Activision Blizzard’s Overwatch League (OWL). After selling 12 franchises to industry leaders including New England Patriots owner Robert Kraft, New York Mets COO Jeff Wilpon, and Los Angeles Rams owners Stan and Josh Kroenke for $20 million and selling out the Barclay’s Center for the OWL finals, Activision Blizzard franchises are now being sold for $30-60 million. OWL also recently announced a new broadcast rights deal with ESPN to complement its $90 million, two-year deal with Twitch.

While esports continues to mature in its development, the OWL does highlight a challenge to its future growth. Much of the revenue articulated in the OWL example is accrued by Activation Blizzard as the game publisher of Overwatch. Game publishers receive the bulk (if not all) of the franchise, streaming, and broadcast fees for esports leagues rather than having that revenue shared among the teams as is the case with most other professional sports leagues.

For esports franchises and athletes to be successful, they must be able to sell sponsorship to both endemic (i.e., those with natural ties to esports) and non-endemic sponsors. The main question for non-endemic sponsors is why are esports valuable to my specific business. As managing director of M&C Saatchi Sport & Entertainment Jodie Fullagar states, “Not all brand sponsorship decisions are solely based on reach, but to get bigger budgets, esports will need to understand the value beyond eyeballs.”

Block Six Analytics (B6A) currently works with multiple esports teams to specifically answer this question. We use the technology and analytics in our Partnership Scoreboard platform to show non-endemic partners why working with an esports team would or would not be a good fit for their brand.

This starts with employing our Corporate Asset Valuation (CAV) model to map out each partner’s brand and revenue goals on to a specific esports activation. We then look to see how esports activations can help a company generate new revenue and / or better engage with target demographics. The goal here is to clearly demonstrate how a specific company generates specific value from a specific opportunity.

By mapping out a company’s goals and specifically demonstrating how an esports activation helps partners achieve these goals, the CAV helps franchises, players, and their partners see how value is created in esports activations. This enables rights holders to demonstrate to a non-endemic partner how a company will benefit from a relationship while non-endemic sponsors can clearly evaluate if this opportunity makes sense for their business.

Reach is still an important component of an esports sponsorship. It is better to reach a larger number of a company’s key demographic when possible. B6A’s integration with Twitch’s public API determines audience size on a minute-by-minute basis. We then use our Media Analysis Platform (MAP) to determine the value resulting from brand logo exposure in streaming video on the platform within 72 hours after a game, event, or series.

Logo exposure is only one potential activation for esports franchises and players. Social media conversation, social branded integration in image and video, earned media conversation, in venue, experiential marketing, and corporate hospitality activations can best be monetized by franchises and players if partners understand their value to their specific businesses. 

If this seems like a similar approach to that which B6A uses for other professional rights holders that is because it is a similar approach. The core question of why a company wants to work with any rights holders are the same in esports as they are with any rights holders. Each company wants to know how each sponsorship helps it meet its revenue and brand goals. For the esports industry to continue its growth, franchises and players will need to be able answer that question.