Three tips to navigate the business of esports

Alex Manisier Columnist

By , Alex Manisier is a Roar Expert

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    Five years ago, you’d be called a lunatic if you said Madison Square Garden Company purchased a controlling stake in HotshotGG’s Counter Logic Gaming. Now, big acquisitions are the the new normal.

    In 2017, MSG Co. are just another name in a long list of successful sports and entertainment names that have invested into esports – controlling stake or otherwise. From Shaquille O’Neal to AEG to the Adelaide Crows, esports investment is at an all-time high as forward-thinking investors flush with cash turn their attention from Silicon Valley and Austin to Summoner’s Rift and de_inferno.

    It’s an interesting time in our little corner of the globe. Maybe even a little scary. So whether you’re an owner looking at acquisition offers, a plucky manager with big aspirations, or just someone who’s thinking of getting involved in the business side of esports, here are a few tips that might help.

    1. Make sure you know what you want
    You wouldn’t trust the first peripherals sponsor to slide into your DMs, so why would you treat an investor any differently? There’s a lot at stake when a deal goes down for a controlling stake.

    From a financial perspective, you’re essentially cashing out on the all the work you’ve invested into your team, and it’s in your interest to put yourself in the best position possible.

    There’s nothing wrong with wanting to cash out, but I’m guessing you didn’t get into esports for the money – rather, you got into esports because it’s something you’re passionate about. In other words, there’s probably some kind of vision that guided the way you managed your franchise.

    Not every investor will prioritise winning above their bottom line, while some investors are willing to win at any cost. Do you want your franchise to be a strong, stable presence that energises your community like the Atlanta Hawks? Or do you see yourself as more of a Golden State Warriors? Are you looking for a Gavin Belson or a Peter Gregory?

    2. Maximise your networking opportunities
    In their press release, MSG Co. noted that CLG would gain “access to MSG’s unmatched expertise in sports business, including marketing partnerships, media rights, event operations, ticketing, merchandise and fan engagement”. Apart from a fat paycheck, the most valuable asset you can gain in an acquisition is the vast experience many sports and entertainment companies have in business development.

    Leverage the people in your network as best you can – it will help you to grow your team and develop you as a professional.

    3. Understand your new role
    If your new owner is James Dolan, I have good news and bad news. The good news is that he’ll probably be quite hands-off. You’ll have a lot of autonomy and you’ll be able to work like you did before, but with more resources at hand. Opportunities you could only dream of could become reality.

    The bad news is that you’re now accountable to someone who doesn’t have a lot of patience for incompetence. You aren’t just affecting yourself when you screw up – you’re affecting someone who believed in your ability to get them a return on their investment. Your neck is now on the line at any given moment, and if worst comes to worst, you’ll be replaced by a possibly senile old man who’s more interested in using your team as a vehicle for his weird triangle cult than anything else.

    On the other hand, if your new owner is Mark Cuban, you’ll find that you won’t have as much freedom as before. He’ll have an opinion on everything, and you won’t be able to do much without his express consent. This could feel stifling – you have more experience in esports than Cuban does, and you’ll believe at times that you’re better equipped to make decisions.

    It could also be a fantastic opportunity for growth. Cuban is a more experienced businessman than you, and the fact that he’s spending a lot of time on an investment that surely represents a small portion of his portfolio suggests that he’s genuinely interested in seeing your team succeed. You’ll be able to learn a lot working side-by-side with him – just don’t give up on asking ‘why’.