Esports a no-brainer for Irish clubs looking to fill the live sport void
COVID-19 is the ill wind that’s blown some good for esports, says a leading sports lawyer who adds that it’s a “no-brainer” for Irish sports bodies to get involved in the area.
Jonny Madill is a lawyer specialising in sport and esports and a partner at Sheridans, one of the leading sports, media, and entertainment law firms.
While based in London, he also works in the Irish sports and esports industry and has seen the rise of the latter in recent years.
“Esports is in essence professional video gaming in an organised format, where — as in traditional sport — players and teams compete for prize money.
“Alongside working with clubs, players, sponsors, agents, leagues, and governing bodies within traditional or mainstream sport, esports has become an increasing part of what I do.
“Sheridans has established itself as the largest standalone esports law firm in Europe and we’re fortunate to work with athletes, teams, tournament organisers, platforms, and sponsors/brands across the space.
“It’s been exciting to see how esports within Ireland has grown from being very much a fragmented ecosystem and on the periphery, to a standalone industry in its own right.”
To get a grasp of the scale of the esports industry, Madill offers a comparison with traditional sports: “The first point to make is if we think about how traditional sports generate revenue, and have always generated revenue, there are obviously a number of commercial ‘pillars’ or revenue streams — including match day revenue, ticket sales, hospitality, sponsorship, advertising, branding, broadcasting and media rights, and of course betting.
“All of those revenue streams exist in the world of esports — across each game title — and in some cases are growing and accelerating at a faster rate than within traditional sports.
“Second, when trying to understand the world of esports and the ecosystem that makes up the industry, it’s important to recognise that esports is very much an umbrella term just as sport itself is.”
The parallels continue with traditional sports.
“Underneath the umbrella of esports, there are dozens and dozens of individual esports game titles — League of Legends, Counter-Strike: Global Offensive, Overwatch, FIFA to name but just a few.
“These game titles are not dissimilar to individual sports in that they each exist within their own ecosystem of tournaments, teams, players, sponsors, and commercial deals, so immediately you can see that we’re talking about a vast and complex ecosystem.
“A key reason why esports has scaled commercially at the rate it has is the fact it is ultimately a digital business, and an industry built around online and digital content — content which reaches huge, and growing, numbers of eyeballs via streaming platforms.”
Whose eyeballs in particular, though?
“While it’s difficult to pinpoint exactly what the typical esports ‘fan’ or consumer looks like,” says Madill, “Much of the data suggests the demographic of the esports audience is that which almost every traditional sports brand and rights holder is trying, and in some cases struggling, to get access to.
“We’re talking about an audience of 18-35-year-olds who are digitally native, tech-savvy, and whose viewing behaviours and consumption habits are very different to traditional sports viewing audiences.
“While progress is being made to bridge the diversity gap, the data shows it is also an audience weighted towards males.
“It’s also, crucially, an audience which has disposable income.”
There’s a particular focus for that audience: Twitch.
“The vast majority of esports content has to this point been streamed online on the world’s largest streaming platform, Twitch.
“This is where esports fans access almost every tournament and competition that’s going on — across multiple game titles.
“Unlike traditional sports, esports hasn’t required traditional broadcasting, or pay-per-view subscription models — a key factor in the rate at which engagement levels have increased in recent years.
“You effectively have an enormous audience and a platform which makes the content incredibly accessible.
“You then have significant levels of investment into the industry from third parties which has further enhanced the commercial growth — including traditional non-endemic brands which understand where their target audience is and where the potential exposure lies.
“We have also seen traditional sports rights holders (football clubs and US sports franchises for example), as well as individual athletes and celebrities. This investment can take the form of commercial partnerships, sponsorship models, acquiring stakes in existing esports organisations, or launching exciting new esports brands.”
That investment doesn’t rely on traditional infrastructure like mainstream sport.
“In light of COVID-19, we've all seen the extent to which traditional sports clubs, leagues and governing bodies are reliant on matchday revenue, and the very serious concerns around the financial sustainability of some of these clubs.
“For esports teams, competition organisers or other rights holders, yes, you’ll have to live without live “LAN” events in stadia — but crucially you’re far far less reliant on “matchday” revenue streams and physical gate receipts.
“Esports is better placed, arguably than any other sector within media and entertainment, to not just adapt to the circumstances surrounding a pandemic, but scale through it.
“In many ways, esports has filled the void left by live sport hitting the ‘pause’ button, and the increasing crossover between esports and traditional sectors has arguably sped up during 2020.”
Is it an obvious move for Irish sports bodies — as well as teams and individual sportspeople — to get into this space?
“It’s a no-brainer, and from a timing perspective there’s arguably no better time to do it than now.
“The barriers to entry are low — whether for a brand or rights holder — and there is an opportunity to be creative and innovative about how to enter the space.
“A recent example would be Munster Rugby, who created a Munster Rugby gaming brand just a few weeks ago — how they’ve done that is via an innovative commercial partnership with an existing esports organisation in Ireland.
“It’s a low-risk investment, and a potentially very effective marketing and fan engagement strategy as opposed to a fully-blown jump into esports: if it goes well, then there will no doubt be opportunities to develop what they have created, and perhaps view it as a core business in itself, to further cross-pollinate rugby and esports audiences.
“Almost every English Premier League club is considering how best to use esports as a means of accessing a younger, more attractive audience.
“Some have made a move but for others, the challenge is understanding the ecosystem and crucially — understanding what the objective is in the long term, as this will inform any ‘entry’ or strategy.”
Madill adds that there are now signs of a “standalone” Irish esports industry:
“In the Irish context, it’s probably only in the last six months. There’s been some isolated esports activity around the country for a number of years, but perhaps a lack of a joined-up industry and ecosystem. There is certainly evidence that this has changed.
“The Irish esports space is interesting in that whilst it’s behind Europe and the UK it is certainly gaining traction at a commercial level, and a participation level.
“It’s probably more mainstream and on the radar within traditional sectors than it ever has been, and the opportunities presented by the COVID-19 disruption in many ways have helped to accelerate that process.”
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