EPT2017 Esports General Discussion - Page 31
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Numy
South Africa35471 Posts
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Gahlo
United States35172 Posts
On September 07 2017 05:12 Numy wrote: Is TSM VC? I thought they were still independent? C9 as well? Last I heard everybody was VC backed and TSM was looking at options, trying to maintain a controlling majority. | ||
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DarkCore
Germany4194 Posts
More teams in EU need VC or a private investor. Maybe that's what Riot hopes to achieve with splitting the scene, but they should have confirmed interested entities before doing it. | ||
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cLutZ
United States19574 Posts
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Numy
South Africa35471 Posts
On September 07 2017 05:51 DarkCore wrote: Honestly I can understand if Regi did that. Having a 25% stake in a well funded esports brand that continues to expand into new games and has room to try things out seems much better than trying to slowly grow your own brand, where any mistake can cost you heavily. More teams in EU need VC or a private investor. Maybe that's what Riot hopes to achieve with splitting the scene, but they should have confirmed interested entities before doing it. If Regi was risk adverse he would never have done what he did. Having 25% Stake is far worse than having 50+ stake and growing it himself for someone with drive. The guy has built an amazingly successful brand and is in a position to expand that brand even further. If he gives up that much control over it I'd be really surprised. Maybe I just have the complete wrong impression but he seemed to have the drive to be at the top in charge not sitting back with some a fat cheque. Could have cashed out long ago if that was his motivation. Unless forced to I think he'll go with the best compromise that leaves him in the most control while offering enough funding to do what he wants. He's in the unique position of having enough bargaining power to achieve that | ||
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Torchise
Canada245 Posts
On September 07 2017 05:38 Gahlo wrote: Last I heard everybody was VC backed and TSM was looking at options, trying to maintain a controlling majority. Yup, that's pretty much it, all endemic NA LCS teams except TSM (this means C9, CLG, TL) have received VC funding this year, presumably since it was their only option to pay the 10M$ franchising fee: - C9: https://pvplive.com/c/cloud9-announces-funding-by-elite-group-of-sports- - CLG: https://www.reddit.com/r/leagueoflegends/comments/6qolfc/official_msg_co_acquires_controlling_stake_in/ - TL: https://www.reddit.com/r/leagueoflegends/comments/6nfhhm/disney_invests_in_team_liquid/ All other teams in the NA LCS were VC-backed from the get-go, including Flyquest: https://en.wikipedia.org/wiki/FlyQuest | ||
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Kaneh
Canada737 Posts
The fact is that all the teams needed Riot to franchise, or not, and be clear on the amount of money they would be getting from league-wide ads. IMO the valuations are still very high, but the good thing for NA teams is they can cut back on salary once they get their franchise approved and become a "talent seeking" team that looks for gems, then once they hit on a few can sign a few big names and compete for championships for a few years. The real killer right now is being a team like TL who has big money and no results. nope. The money they get from riot is a tiny consideration compared to the stability franchising brings to a brand. Its not some bubble. The value is in the brand. Its why the houston rockets were sold for 2.2 billion. Do you think the players, staff, and all that are worth 2.2 billion? hell no. its the brand that's worth that much. Its why they pay ridiculous salaries. Its the exact same shit in league. The brands are going to grow, which is why VCs are all getting into this. Its the next sports league and they want in. EU teams missed the memo tho, they thought winning prize money and getting paltry handouts from riot was how you made profit. Instead of building a brand to sell to advertisers. Now riot EU has to forcibly help these terrible orgs make money. | ||
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cLutZ
United States19574 Posts
On September 07 2017 12:29 Kaneh wrote: nope. The money they get from riot is a tiny consideration compared to the stability franchising brings to a brand. Its not some bubble. The value is in the brand. Its why the houston rockets were sold for 2.2 billion. Do you think the players, staff, and all that are worth 2.2 billion? hell no. its the brand that's worth that much. Its why they pay ridiculous salaries. Its the exact same shit in league. The brands are going to grow, which is why VCs are all getting into this. Its the next sports league and they want in. EU teams missed the memo tho, they thought winning prize money and getting paltry handouts from riot was how you made profit. Instead of building a brand to sell to advertisers. Now riot EU has to forcibly help these terrible orgs make money. I'm glad you brought up the NBA, because it makes your point more laughable than otherwise. The Rockets sold for that much for a few reasons: 1. 4th Biggest Market in the NBA; 2. NBA has national TV deals that ensure significant league-wide revenues for years to come, and live sports is seen as a bulletproof industry atm (whether this is true is up for smarter people than the smartest VC investors); 3. The NBA CBA ensures no team can lose money unless they are realllllllllllllly stupid; and 4. Sports franchises are basically pieces of art for billionaires. The Houston Rockets are basically a Picasso that also gives off a dividend. These features do not apply to most Esports franchises. #4 is probably the biggest part of the Houston valuation, and its not applicable. The "brand value" in a traditional Coke or Chevy sense is only a tiny portion of an NBA teams valuation (merch and team ads are almost negligible). Saying, "the value is the brand" is silly, NBA/NFL/MLB teams went decades being valued as standard investments where people would buy them for 10x multiples of yearly earnings. Its only very recently that sports franchise valuations have exploded and it is because of TV revenues (both national and local tv deals went way up 2000-Present) and because the # of billionaires who want to buy an expensive toy has gone up. Don't think the "billionaires toy" theory is correct? Look at Manchester City and Paris Saint-Germain. Those teams lose money, but the owners just want to win titles. They are literally buying trophies. The Manchester United owners (same as the Tampa Bay Buccaneers owners) are losing ground in the EPL/Champions league because they insist on breaking even/turning a profit ala their US sports franchises, but its nearly impossible to win titles while turning a profit in the modern era (Good work Leicester, you truly amaze me). | ||
GrandInquisitor
New York City13113 Posts
On September 07 2017 12:29 Kaneh wrote: nope. The money they get from riot is a tiny consideration compared to the stability franchising brings to a brand. Its not some bubble. The value is in the brand. Its why the houston rockets were sold for 2.2 billion. Do you think the players, staff, and all that are worth 2.2 billion? hell no. its the brand that's worth that much. Its why they pay ridiculous salaries. Its the exact same shit in league. The brands are going to grow, which is why VCs are all getting into this. Its the next sports league and they want in. EU teams missed the memo tho, they thought winning prize money and getting paltry handouts from riot was how you made profit. Instead of building a brand to sell to advertisers. Now riot EU has to forcibly help these terrible orgs make money. My thoughts exactly. I legitimately 100% cannot get over the fact that h2k's big announcement about their losses ignores its brand value and sponsorships. It is just as ridiculous as the Rockets claiming their players and staff and equipment are worth $2.2 billion. h2k is either being intentionally and extremely misleading, or they have a Redditor as CFO who truly thought prize money + stipend was going to pay for the cost of owning an LCS team. | ||
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DarkCore
Germany4194 Posts
I'd consider bottom NA teams better than bottom EU teams, at least in comparison to their Challenger scenes. The last three promotions, only one Challenger team has made it through, and that was FlyQuest lol. Yeah, the teams that make it to promos seem to also have money, but they're at a disadvantage because their opponents have been playing and scrimming in the more competitive LCS. It's sad for them, but for the viewer, I think franchising is the better deal. | ||
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Ansibled
United Kingdom9872 Posts
London: Fnatic, G2, Misfits, Splyce Berlin: UoL, S04, Roccat Barcelona: H2K, Giants Paris: Vitality | ||
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Gahlo
United States35172 Posts
Interesting to see Ocelote not pick Barcelona and have his team in his home country. Last I checked, H2K was a UK based org too. | ||
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cLutZ
United States19574 Posts
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Numy
South Africa35471 Posts
Idk this whole thing is so weird it's hard to judge anything. | ||
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JonnyLaw
United States3482 Posts
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Gahlo
United States35172 Posts
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cLutZ
United States19574 Posts
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Gahlo
United States35172 Posts
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GrandInquisitor
New York City13113 Posts
On September 08 2017 04:55 cLutZ wrote: TLDR: Riot needs to monetize the streams better. They have that big MLB project that we haven't heard anything about lately. I wonder how that's going. | ||
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StarStruck
25339 Posts
On September 08 2017 04:40 Gahlo wrote: https://www.youtube.com/watch?v=swy8YDxqS7Y Well done video, which really dumbs it down. | ||
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