In early February,Delaware North, a global leader in hospitality/food services and parent company of the Boston Bruins, formally announced a strategic partnership with the e-sports team Splyce. But why would a global leader in hospitality/food services be interested in professional video gaming?
"It's definitely one question our leadership often asks me," admits Delaware North CMO Todd Merry. "We started to see some of the events show up in the buildings where we do hospitality and it didn't take a rocket scientist to determine that we will see more of these events where we work, and that it's a meaningful juggernaut in the world of sports."
Whether e-sports competitions should actually be described as sporting events remains an issue of contention, but means little to business people who are simply looking for a good investment. Merry believes in e-sports despite the industry not yet generating significant revenues.
"No one is making a ton of money in e-sports, but talking to NBA and NHL folks in '60s and '70s, no one was making a ton of money, and look at the businesses that they became," says Merry. "I think you'll see the money follow the fans and audience, and that the audience is there."
And the money surely has been flowing, at least from investors to e-sports teams. Just yesterday,it was announced that e-sports team Cloud9 received an undisclosed amount of money from former quarterback Joe Montana, San Francisco Giants outfielder Hunter Pence, Reddit cofounder Alexis Ohanian and others.
"I think when you have a great product, it's just a matter of time that you start to see the revenue follow that fanaticism of that audience," says Merry. "Today teams rely on sponsorship and some broadcast and some publishing. Think about how many lockouts and strikes there have been to get to an equilibrium where everyone is making money in other sports. Today, we're not there, but should be in the future."
The influx of capital into e-sports teams is exciting to Merry (he references Ted Leonsis' investment as providing extra encouragement), as his company has already made an investment into a franchise, but even Merry is concerned that the opportunities for good investments in the space may be drying up.
"I think there's more money chasing fewer viable teams today. We have a number of clients that work with us in hospitality who say they're looking to buy a team and there's just not that many opportunities anymore," admits Merry.