76ers CEO says competitors were also talking to Dignitas, talks LCS profit model

by Josh Bury Sep 26 2016
Thumbnail image courtesy of theScore esports / Philadelphia 76ers

The news Monday that the Philadelphia 76ers had secured a controlling interest in both Team Dignitas and Apex Gaming represented a first for esports. The Sixers were far from the first traditional sports team to take the plunge into esports, but they were certainly the first major professional sports organization in North America to do so.

They also didn't just pick up a few Hearthstone or FIFA players, as has often been the case in Europe — Dignitas is an esports brand with over a decade of experience and teams in most of the major esports disciplines.

But in an interview with theScore esports, Sixers CEO Scott O'Neil said that while the Dignitas brand was obviously a huge part of the deal, they also valued the ability of former manager and current president Michael "Odee" O'Dell to help them navigate the esports space as a partner.

When asking his friends in the esports space about someone who could partner with the Sixers, O'Neil said, Odee's name kept popping up.

"He's someone who is very high integrity, honest as the day is long," he said. "He's been in the esports world for quite some time, he's not a flash in the pan-type of guy. His word is his bond, and he's the type of person we'd like to partner with."

But the Sixers were not the only professional sports organization looking to carve out a piece of the esports space by acquiring Dignitas. He said that he understood there to be competing offers for the organization, and he relied on his business reputation as one way to show that his interest in a deal with Dignitas was earnest.

"What I suggested to Odee and [Apex co-owner Michael Slan] was to pick up the phone and call people in and around the sports space and ask them about our reputation ... and find out what kind of people we are to deal with, and ask about our integrity level, ask about our partnership approach," he told theScore esports. "Ask about what our word means. And they got very comfortable."

But O'Neil also said that he wasn't surprised by the interest in Dignitas, because the tide has begun to turn among investors and team owners, who understand that esports represents an opportunity for growth among a valuable demographic.

"It's the fastest growing sport in the world. And so, the owners, the people that own NBA teams and NHL teams, are some of the most successful businessmen in North America," he said. "They're smart and successful and have the ability to buy organizations for a reason. I think where the opportunity lies is pretty clear: esports has a big bullseye on it."

The other part of the Sixers' move was the addition of Apex Gaming and its merger into the new Dignitas, which gave them a spot in the NA LCS.

Dignitas' new chairman Greg Richardson is a former gaming executive and investor. When asked about the Apex acquisition, he said that it's more than just the LCS spot that the newly-merged Dignitas will get out of the deal.

After being introduced to Apex co-owners Michael and Daniel Slan by Odee, Richardson said that he saw in him another valuable quality: the ability to find talent.

"So there was value in that [NA LCS] spot, from our perspective, but also Michael Slan as an individual — a talent evaluator, someone who has built world-class relationships with some of the best players in the world," Richardson told theScore esports. "We thought that in partnership with Odee, the two of them would be very formidable at helping us build the most competitive franchise in the esports market."

The decision for Dignitas to secure that NA LCS spot at all comes at an awkward time. Riot Games' co-founder Marc "Tryndamere" Merrill recently raised a furor over comments he made on Reddit that suggested Team SoloMid owner Andy "Reginald" Dinh should spend more money paying his players and less on competing esports titles.

The ensuing discussion about monetization for League of Legends teams — notably, the lack of sponsorship opportunities and resulting limitations for growth — saw many esports organization and sponsors voice their concerns about Riot's policies. Additionally, the LCS's relegation tournament means that investors can lose their investment very quickly.

O'Neil said that he's heard the concerns, but he has good reason to remain stoic. He called the NA LCS representation a "critical component" for his new organization to reach the fans, but also believes that his past in league negotiations could help both sides find an equitable balance.

"On the topic of relegation to be specific ... Greg [Richardson] is waving me off, but ... what's good for the fans isn't always great for the team owners. We hope to be part of that dialogue," he said. "My experience is I've been in the sports space, traditional sports space, for 20 years. And some of those were spent at the NBA league office. So I'm hoping some of the value I might be able to provide is in being part of the solution."

O'Neil also said that he views Riot Games' current position as "an evolving model," noting that his conversations with the company have been positive and that they've shown a willingness to invest in their game.

And while LCS owners do face some restrictions, they are substantially different from those of a traditional sports league.

"When you work for an NBA team or an NHL team ... you have a lot of restrictions from the league in terms of what you can and can't do, in terms of content, distribution, player movement," he said. "We at the leagues really rely on the leagues to do that, and we're restricted to a 75-mile radius from which to market. So that's what's most interesting to me in terms of learning: how do you build a worldwide fanbase?"

Richardson said he can see things from a different perspective because of his time spent on the publishing side: balancing existing business with esports development isn't necessarily simple.

"Look, you have to give Riot a tremendous amount of credit for helping to take esports to where it is today," he said. "And we're excited, along with Odee and the Slans, to sit down with Riot and the other publishers and help draw the picture that we all want — fans, players and everyone — of the next chapter in esports."

With so much time spent in the esports world about what lessons, policies and models can or should be adopted, Richardson said that the Sixers were delighted to see that there were a few things that sports could learn from esports.

"When we started to fill Scott and his team in on the strength and the depth of the community — how passionate these people were, how much time they spent creating content as volunteers, just the level of engagement — the Sixers were blown away," he said.

"It's something completely different from what you see in real sports. There's a lot to be learned about how that got created, and what could be replicated in the real sports world."

Josh "Gauntlet" Bury is a news editor for theScore esports. You can find him on Twitter.