GOM TV/Blizzard Sign Exclusive Broadcast Agreement - Page 44

So it all began 10 years ago.

Back then, when a player was winning a tournament or a league in Korea, he had to pay the national tax rate of 27%, and hand over this to the gov.

Problem was that, gaming wasn't a work and gamers were really poor. Also, the culture office of the Korean gov. as it saw pro gaming getting bigger and beeing something new and unique to Korea and closely linked to the insane expansion of Korean network, decided it needed a legal tutorship for the scene to grow.

The very first step was to reduce the tax rate on the player's earnings, from 27% to 3%. To do this, culture office of the minister introduced pro gaming licenses. That was around when Elky got 2nd in WCG. Back then they would give a license to any gamer successfully ranking top 3 of any tournament.

That was the first step.

At the same time, OGN mainly, was trying to figure out a TV league format, that would draw sponsors to invest in their shows and at the same time, bring a 1v1 game, into a team game, so the sponsor sponsoring, wouldn't have to rely on a bunch of indivudals for their promotion, but rather on the image of a team or a club.

The original problem, to starcraft broadcasting was the lack of sponsorship. Even if you had one company sponsoring a league event, even with the good tv ratings, it wasn't enough money to make it grow.

Pro gaming actors back then, had to find a way to bring in more money to exist.

Basically, pro teams were lacking money, and so were the leagues to run.

The solution they came up with, was to involve in the business bigger companies, such as KT, Samsung and especially SK TELECOM, that basically shitted all over esports until they came to sponsor a team. I know that very well, because I got to talk with them back then about making a pro team, through the N.E.T. pc room manager and accountant, that were close to the CEOS of SK telecom (Yes hehe).

Also, while I was searching for a sponsor for Smuft and Elky in Korea, I got to meet KTF officials that were planing maybe to make a pro team, rather than sponsor only a few individuals, and with samsung khan as well, that was back then, only a gaming club not providing any form of salary to its players.
( They wanted Smuft and we met them, but they didn't have any cash to offer. Otherwise smuft wouldve joined Samsung Khan).

KTF was very interested in getting Elky, but they werent offering enough money for elky to live in Korea. We had to decline the offer.

So at that time, most of big sponsor companies you're familiar with now, were extreemly reluctant to invest any money into esports, let alone build a whole team with full accomodation and staff. All this came very very late.

So, the solution that OGN came up with was this :

Since the ratings were actually good, but the format couldn't involve all these big companies at the same time for a fair commercial exposure (ie only one sponsor for one league), they took the league format GAMEQ had created (that I played in) wich was the ancestor of the pro league and said to these big national companies that didnt want to get involved :

"We make a league that runs daily, featuring all the players from a team, in several matches, and each team could bear the flag of one of these big companies. That way, every sponsor gets a full time advertisement any time their team participates in any given tournament, no matter who is sponsoring the event. However for this to be possible, these sponsors not only would pay a team of players, but also AN ENTRY FEE to the tv station networks to participate in the proleague."

That was the deal, and it worked out pretty well.

Now back to gov culture office and how they decided to handle esports.

Problem was that to handle esports organisation on a new business scale, like this one, you need ressources and also one of these big companies, to make the first step towards this.

If I remember correctly, Samsung was the first to finance KESPA and actually created the office from the already existing "officials" running touranements here and there (basically people in charge of paying the players when they won their prizes i think).

However, as the teams started to exist and their finances got bigger, and as the proleague started to work out very well, the entity that was first ran by Samsung itself, transformed to involve to its board other sponsorship, so that SKT, KTF or anyone else in the business could run the things along and have their word to say.

Kespa was formed this way.

It was first a decision from the korean governement to give a legal frame to the pro gaming activity, and later on, the major sponsors of esports (samsung, Kt, skt etc etc) joined in to run the office and make it an established entity.

Basically, what you all fail to understand is that OGN and MBC and Kespa aren't running these leagues by their own selves. It's an organisation that involves every single actor in this business.

When Kespa is dealing with Blizzard, its SK telecom, KT F, Samsung, CJ etc they are dealing with, and so the players.