It is a deal that could mark the moment e-sports enters the big league. The US owners of a famous basketball franchise and investors in Premier League club Crystal Palace have snapped up two of the leading e-sports teams.
The Philadelphia 76ers have acquired Team Dignitas and Apex, and will merge them into what the NBA franchise hopes will prove to be a new powerhouse in the booming, yet still commercially undeveloped, e-sports industry.
Josh Harris and David Blitzer, already owners of the 76ers and an ice hockey franchise, bought a substantial stake in Crystal Palace last November. This deal will be on a much smaller scale but it seems the pair have big plans.
“The e-sports industry is primed for incredible growth,” says Harris. “And we are thrilled to become an owner of such a storied franchise as Team Dignitas.”
The owner and manager of Team Dignitas, Michael ‘Odee’ O’Dell, will stay on to run the combined operation, which will include Apex’s very successful League of Legends team.
For O’Dell, this is an extraordinary moment. When I visited him two years ago at his modest home in Surrey, I described him as a combination of Sir Alex Ferguson and Roman Abramovich. But the glorified shed from which he ran Team Dignitas, and more than 50 professional players around the world, was hardly Old Trafford or the Bernabeu.
While some of his players were already racking up big sums from advertising on their Twitch channels, this is still a very young industry struggling to find a business model.
Now he will have the resources of a major professional sports organisation behind him.
When we spoke on the line to Philadelphia, he was excited about what that could mean: “They have got sports psychologists, they have got nutritionists, that’s the next level that I wanted to get to.”
Last month I reported on the Premier League clubs which are signing up professional e-sports players, but what West Ham and Manchester City have done looks like cautiously dipping a toe in the water, while the Philadelphia 76ers are plunging right into it.
I put it to the 76ers’ chief executive Scott O’Neil that e-sports might have a huge audience, but making money from them was going to prove a challenge. However, he saw that as an opportunity.
“The average American sports fan spends $77 (£59.30) a year on their fan activities, but with e-sports fans it’s under a dollar,” he explained.
He insisted that growing revenues would come not just from advertising but from merchandising. He said the demographic of e-sports – “75% male, 18 to 34, highly engaged but not [listening to or] watching traditional radio and TV” – was just the kind of audience with which many advertisers were desperate to engage.
The whole world of people watching other people playing video games is a mystery to most people over 30 – which includes just about everyone in the marketing industries.
But Amazon, which bought the game streaming site Twitch two years ago for $1bn (£771m), was among the first to bet on this becoming a big business and Harris and Blitzer’s move marks another milestone in the growth of e-sports.
Now we can expect other traditional sports businesses to start wondering whether they too need to understand what is that makes watching League of Legends more compelling to millions than Middlesbrough v Burnley.