Esports Meets Mainstream: Cowboys' Complexity buyout is just another sign of the shifting esports economy

by Daniel Rosen Nov 7 2017
Thumbnail image courtesy of theScore esports / compLexity Gaming

In perhaps one of the more surprising intersections between traditional sports and esports we've seen in the past year or so, Dallas Cowboys owner Jerry Jones now owns Complexity Gaming. It's an exciting move for Complexity that mostly has everyone else (myself included) scratching their heads asking: Why?

To be fair, this is an overall good thing for esports. Complexity might not be the most successful organization right now, but they aren't a terrible one by any means. They've been involved in plenty of games and have been consistently successful in some of the smaller scenes. They're a solidly tier-two organization, but the fact that there's investment interest from traditional sports billionaires in an organization of their size only bodes well for other smaller orgs.

Esports has long been divided by finances, and the massive investments coming in from non-endemic organizations and investors only served to make those financial divisions even more stark. Seeing smaller teams that don't have the brand caché of a Counter Logic Gaming or the financial clout of an Echo Fox get significant investment does a lot to make that division a little less pronounced.

Many people are asking why Complexity gets this kind of investment over other orgs, and according to Complexity CEO Jason Lake, it's partially because of the organization's long history in esports and proven track record.

"Our new partners told me they were more interested in the management team and foundation of an esports team than who was currently hot and fancy," Lake told theScore esports in a written statement. "In Complexity they saw a rich history and integrity and that’s what was attractive to them."

And Complextiy has been around for a long time. They were founded in 2003, making them one of the oldest esports orgs still standing in the West, and they survived the disastrous Championship Gaming Series. They've proven they can stay alive no matter what happens in esports, which requires a level of adaptability.

But it still feels strange that Complexity of all orgs is the one being part of such a huge deal. Lake tells theScore esports that the org's history is a bigger part of the deal than just proof of their adaptability, as the son of John Goff, one of Jones' investment partners in this deal, was a big CS 1.6 fan, and made the necessary introductions to get the ball rolling. However, Complexity had already been looking for an ownership partner for two years before the deal went through.

"Around two years ago it became apparent the industry was in an exponential growth curve and top teams needed investment capital and larger partners to survive for the long haul," Lake said. "I began looking for the right partnership for Complexity at that time. I can’t go into details but will say that I spoke with an incredibly notable list of billionaires, sports teams and investment firms. Our search was exhaustive and exhausting. It consumed the vast majority of my time. I’m super grateful to have it behind us and be moving forward with such great partners."

And that highlights the other great division that's about to form in esports. One financial stratification, that of teams who had been successful for long enough to amass enough sponsors to be stable, for another, that of teams who have billionaire owners and those that don't.

We are quickly approaching the era where the bottom end of esports falls out, and the middle goes with it. Right now, smaller, independent tams, like Unicorns of Love, are struggling in a system that expects esports teams to take significant losses for years and be okay with it. That's not something these small teams can afford, but it is something that billionaires, huge sports organizations and venture capital firms can handle.

The scale of the esports economy is growing rapidly. As more money flows into the scene, teams are able to operate more efficiently, participate in larger leagues, attract bigger sponsors and sign bigger-name players. Overwatch League and the franchised NA LCS feature multi-million dollar buy-ins. The EU LCS is moving to a partnership system as well, and while CS:GO isn't franchised, maintaining a top-tier team isn't cheap between contracts, staff and housing. Smaller teams are getting priced out of esports, and while that isn't necessarily a bad thing, it will change the space a lot.

To survive, smaller teams are going to need significant investment, just like the larger teams are getting. That means that those smaller teams need the means to attract investors, which means either results or history. Complexity had history. There aren't too many historically relevant orgs left in the space though, and fewer successful ones that don't already have non-endemic investment.

Esports is growing in terms of viewership, playerbase and money flowing through the space, but the number of teams is going to shrink as teams see a need to get bigger and bigger to continue operating in the space. Complexity is just another example.

Grade B+ — While I was a little confused when the announcement came out, I'm still happy for Complexity. It's what they need to survive in the modern esports climate. Hopefully more teams of their size can find a way to thrive as well, but I won't be sad to see some of the more fly-by-night orgs vanish.

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