Esports meets mainstream: What MSG's critically timed purchase of CLG means for esports

by Daniel Rosen Aug 1 2017
Thumbnail image courtesy of Riot Games / LoL esports

Counter Logic Gaming has, for a long time, been known as one of the more independent esports organizations out there.

Aside from sponsors, CLG has never disclosed any significant outside investment, at least not publicly. That was, until Monday, when the org announced they'd been bought by the Madison Square Garden Company, which owns Madison Square Garden, the New York Knicks and the New York Rangers.

Though some social media pundits have been quick to point fingers at the NA org for "selling out," the partnership is a good one for CLG and it oozes confidence from MSG.

CLG is one of the only "first wave" Western esports teams to receive investment from a major traditional sports entity. So far, we've seen a lot of non-endemic investment into newer esports teams, established over the last two or three years. Teams like Immortals, founded by a group of investors and Misfits, co-founded by the creators of the SyFy channel, have seen investment from the world of traditional sports. All the while, the older, grassroots orgs have either had trouble securing that kind of buy-in, or have chosen not to seek it.

That's not to say that CLG is the very first of the early esports orgs to be bought by non-endemic investors. Team Liquid was purchased by aXiomatic eSports last year, which has several sports investors associated with it, to say nothing of its connection to Disney. But there are differences here.

aXiomatic as a brand is not as recognizable as Madison Square Garden. MSG isn't a group of faceless investors with a strange moniker buying into in an esports team, this is publicly recognizable company with an iconic name to their brand that already owns two major sports franchises adding an esports team to their stable.

MSG isn't as new to esports, either. They've hosted two League of Legends events, two ESL One Dota events, CoD XP 2016 and the Dota 2 Boston Major. The company has been exposed to and involved in esports for a while now, and it's significant that they chose CLG of all the available options to invest in.

"Esports is clearly one of the most dynamic categories in sports and entertainment — [it's] poised for significant growth. Over the last several years, we have witnessed the power and passion of esports firsthand while hosting events such as sold-out League of Legends events at The Garden," Jordan Solomon, executive vice president of MSG Sports told theScore esports in an emailed statement. "This is an ideal time for us to invest in esports, as the industry is evolving to more closely resemble other professional sports like the NBA and NHL — enabling us to share our significant expertise and experience and help develop this exciting industry."

What's interesting about the CLG choice is that it comes before that org has necessarily secured a spot in the new, franchised NA LCS system. That could be a mark of confidence from both parties, sending the message that MSG believes whether or not CLG stays in the NA LCS, their grassroots-built brand has staying power.

It's this critical timing — after the NA LCS franchise application deadline but presumably before any decisions on Riot's part have been made — that separates this non-endemic partnership from all others. According to both the press release and Solomon's statement to theScore esports, CLG founder George "HotshotGG" Georgallidis will still run day-to-day operations, while MSG will focus "on bringing new marketing partners, expanding digital content and growing media revenue in the short term."

Whether or not CLG makes it into the NA LCS, MSG is essentially saying it doesn't matter. Esports as a whole are moving more into the franchised league structure — an arena that MSG is more than familiar with — and whatever individual game they're in, they have the infrastructure to stay the course with it and build revenue. CLG brings the ability to pick players and field a competitive esports team, MSG brings the money and experience. The game is mostly irrelevant, judging by the timing of the announcement.

With this purchase, MSG has announced to the world that they're in esports for the long haul — franchise spot or not.

Grade: B+ MSG seems confident in esports. They bought an older team that didn't have much in the way of outside investment beforehand, a team that was known for being very independent. Maybe CLG needed it, maybe they didn't, I can't say. What I can say though is that the confidence from MSG is a very good look, and one I hope to see in future non-endemic esports investments.

Daniel Rosen is a news editor for theScore esports. You can follow him on Twitter.