As esports has increased in popularity, the number of investments made in the space has grown dramatically. In fact, 2018 saw the biggest quarter in the industry’s history with almost $2 billion in disclosed investment funding – up nearly 10 times from the same point last year.
This increased interest by investors is not surprising. In 2016, SuperData predicted that the esports industry would reach $1.5 billion in yearly revenue by 2019. In reality, that benchmark was achieved two years earlier than expected – in 2017. SuperData has since predicted that global esports revenue would grow 26 percent by 2020 and achieve a total of $2.3 billion. It’s certainly possible that those estimates will also turn out to be conservative.
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So, as investor interest continues to grow, a new type of investor is increasingly entering the field: celebrities.
In October 2018, just days apart from one another, NBA Hall of Famer Michael Jordan and hip-hop star Drake both made news by making their first investments in esports.
When celebrities invest in esports, they bring something in addition to money: name recognition for the average person. It’s one thing for the man on the street to learn that Robert Kraft is heavily invested in esports, it’s another thing entirely for that same person to discover that Shaquille O’Neal has an esports investment.
Let’s take a look at some of the big names who have made significant investments in the esports’ scene recently.
Jordan has a dubious relationship with video games. In 1993 he was not featured in the hit video game NBA Jam after opting out of the players association’s group license. Then today, as an executive of the Charlotte Hornets, he helps oversee one of the nine NBA franchises that have not joined the NBA 2K League.
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However, even the seemingly video game-adverse Michael Jordan recently announced an investment with aXiomatic esports as part of a partnership with investment group Declaration Capital.
aXiomatic is the company that owns Team Liquid, a significant organization in League of Legends, Dota 2, Counter-Strike: Global Offensive, StarCraft II, and several other games.
“I’m excited to expand my sports equity portfolio through my investment in aXiomatic. Esports is a fast-growing, international industry and I’m glad to partner with this great group of investors,” Jordan said in a statement.
“The next generation of sports fans are esports fans,” said Ted Leonsis, co-executive chairman of aXiomatic, said in a press release. “Esports is the fastest-growing sector in sports and entertainment, and aXiomatic is at the forefront of that growth. We are thrilled to welcome Michael and Declaration Capital to aXiomatic and look forward to working together on some truly cutting-edge opportunities.”
The same week Jordan made his esports investment, hip-hop artist and record producer Drake invested in the esports organization 100 Thieves.
Once exclusively an apparel company, in 2017, 100 Thieves received a multimillion-dollar investment from Cleveland Cavaliers and Quicken Loans owner Dan Gilbert to expand into an esports organization. 100 Thieves now has teams that compete in League of Legends, Fortnite: Battle Royale, Call of Duty: Black Ops 4, and Clash Royale.
Drake’s investment in 100 Thieves was made through the company he and agent Scooter Braun co-own, SB Projects. Braun has said that they choose 100 Thieves because of founder Matt “Nadeshot” Haag’s foresight.
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“He has a clear vision for where esports is going and how to build an amazing brand within it, and that’s why I wanted to bet on him and 100 Thieves,” said Braun.
While this is his initial investment, it is not the first time Drake has made waves in the esports industry. He recently streamed Fortnite with professional gamer Ninja for several hours, breaking the Twitch viewership record. Drake is also a partial owner of the Toronto Raptors, which has an NBA 2K League team.
Rick Fox, a former NBA player for the Los Angeles Lakers, has become a big player in the esports world with his team Echo Fox. The group first entered the scene with League of Legends in 2015 and has since expanded to Gears of War, Call of Duty, and a number of fighting games.
Echo Fox has placed a significant priority on physical training and proper nutrition for his esports teams. The players all benefit from nutritionists, strength and conditioning programs, and even mental conditioning.
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Jennifer Lopez, Marshawn Lynch, Michael Strahan
These disparate celebrities – singer and actress Jennifer Lopez, NFL running back Marshawn Lynch, and former NFL defensive end now media personality Michael Strahan – joined up to invest team NRG. Their investment was made as part of $15 million Series B financing round.
NRG was founded by Gerard Kelly and the co-owners of the Sacramento Kings, Andy Miller and Mark Mastrov. The group has teams in Overwatch, Counter-Strike: Global Offensive, For Honor, Hearthstone, Rocket League, Smite, Vainglory, World of Warcraft, and other titles.
Alex Rodriguez was also involved in the NRG Series B financing round, but he earns a solo mention because that was actually his second investment in the organization. He also made a significant investment during the initial funding round.
In fact, his second investment also earned him a seat at the table as he became a member of NRG’s board of directors.
The actor didn’t make an investment in a team, Kutcher’s invested in Unikrn (pronounced “unicorn”), a company that enables esports fans to bet on pro gaming matches in real time.
People can bet legally for free using virtual tokens known as Unikoins. In specific areas of the world, including the U.K. and Australia, betting is available using real-world money. It also offers tokens for merely playing games, with Counter-Strike: Global Offensive, League of Legends, and Dota 2 currently included in the program.
Mark Cuban is also a Unikrn investor.
Photo Credit: Clutch Points
NBA great Johnson and motivational life coach Tony Robbins formed the investment company aXiomatic. While the company has several esports investments, one of the most notable is Team Liquid.
Founded in 2000, Team Liquid has competed in more than 900 tournaments, including winning 2017 Dota 2 contest, The International, which had one of the largest esports prize pools in history.
A dominant center during his NBA-playing days, Shaq is now a dominant personality on TNT’s “Inside the NBA.” Shaq was also an early investor in NRG, along with Alex Rodriguez.
Before jumping into esports, Shaq had a long history with video games, appearing in several NBA titles, including MBA Jam and NBA 2K. However, his avatar is not limited to the b-ball court, Shaq has been a playable character in several fighting games, such as Ready 2 Rumble Boxing: Round 2 Delta Force: Black Hawk Down, and UFC Undisputed 2010. He even had his own title, the widely derided Shaq Fu (and its recent sequel, the crowdfunded Shaq Fu: A Legend Reborn).
The famous DJ is also a popular Twitch streamer and gamer, so it may not be a surprise that Aoki has put down roots in esports. In October 2016 he bought a majority stake in Rogue, an Overwatch and Counter-Strike: Global Offensive team founded that May.
“As many of my fans know, I’ve been a gamer all my life and have been getting more and more involved in esports,” said Aoki. “I can finally take my love for gaming to the next level as an owner of Rogue, the professional esports team. As an avid player of Overwatch, their dominance caught my eye, and after getting to know them, I realized that we shared the same goals and interests in team building and competition.”
Whether these celebrity investments will bring in new esports fans remains to be seen. However, one aspect is indisputable, they bring attention and a new level of credibility – which may be just as important.
To discover what esports investment opportunities are available to you, give eGency Global a call at 972-323-6354.