Ted Leonsis, Steve Case And Magic Johnson Have Purchased Their First E-sports Team

If you aren’t familiar with “League of Legends,” “Counter-Strike: Global Offensive” or “Hearthstone,” it’s time to brush up on your video games because Monumental Sports & Entertainment owner Ted Leonsis thinks e-sports can be the next big thing — and he has led an ownership group to purchase professional e-sports franchise Team Liquid.

Leonsis, who owns the Washington Wizards, Capitals and Mystics, is part of new ownership company aXiomatic. He is joined by Washington Nationals owners Lerner Enterprises, Basketball Hall of Famer Magic Johnson, venture capitalist Steve Case and what amounts to a veritable who’s who of Greater Washington’s business community and the wider professional sports world.

Peter Guber, chairman and CEO of Mandalay Entertainment Group and co-owner of the Golden State Warriors, the Los Angeles Dodgers and Los Angeles FC, is also part of the group.

Leonsis, who declined to disclose how much aXiomatic paid for Team Liquid, said he has been following the gaming world since a nascent AOL, then called Quantum Computer Services, was trying to connect Atari gamers in the late 1980s. He believes there is a big future for e-sports.

For those who do not know, Team Liquid doesn’t just consist of players who compete for prize money and prestige across a series of video and computer games (like “Starcraft 2”), it also provides news and information, along with merchandise, to fans and readers.

Leonsis believes the group is getting in on the ground floor of what could be a major industry with the right guidance.

“It’s so new and it’s so nascent and we thought that many hands would make light work,” Leonsis said. “We have to figure it out. We are literally kind of writing the rules on how to make this industry scale and work.”

And for those of you who don’t know what “League of Legends” or “Hearthstone” are or how they are played, please consult your closest Wikipedia (or teenage gaming relative) since I am not going to take the time to explain it here.

The concept of e-sports, where players compete in organized and globe-spanning competitions to see who is the best, has taken off in recent years. Consulting firm Deloitte predicts the industry will generate global revenues of $500 million in 2016, up from $400 million in 2015. In America, Deloitte predicts the e-sports market will grow from $85 million in 2014 to $1.2 billion in 2018.

“It’s kind of the birth of a whole new community and infrastructure,” Leonsis said. “Can we help kickstart and birth this to be a real industry and a real business.”

While e-sports draws massive crowds overseas, Leonsis said the North American market is still growing. And Greater Washington’s higher proportion of millennials, large student populations and high-speed internet makes the area a great place for e-sports.

Does the purchase mean e-sports events will be coming to Verizon Center or to the new training facility and arena being built in Southeast D.C.? Leonsis said they will have to compete just like everyone else, but said those facilities were well-suited for e-sports events.

“Well I am sure there are tournaments and tours that Verizon Center and the new building would be very interesting in bidding for them, but that’s not why we made the investment,” Leonsis said.

AXiomatic is not the only professional sports outfit to purchase an e-sports team, as the Philadelphia 76ers announced Monday they had purchased and merged teams Apex and Dignitas.

Leonsis said the new ownership group, of which Monumental Sports is a minority member, brings a load of traditional sports skills to the budding industry, including scheduling, sponsorship, naming rights, drafting, training, developing and retaining players and merchandising.

Other members of the ownership group include Revolution co-founder Donn Davis, Fred Schaufeld, managing director of SWaN & Legend Venture Partners, Zachary Leonsis, VP and general manager at Monumental Sports, Ramsey Asset Management CEO Russ Ramsey, and Washington Kastles owner, serial entrepreneur and Kastle System Chairman Mark Ein.

Leonsis also made news recently when he announced the founding of Arena Football League team the Washington Valor. That is another sport Leonsis said would be a “long-term investment with a lot of upside.”

In March, Leonsis also revealed his plans to start a $10 million venture capital fund to invest in sports-focused tech startups.

Source: Washington Business Journal, Andy Medici
Photo: “It’s so new and it’s so nascent and we thought that many hands would make light work,” Ted Leonsis says of purchasing an e-sports franchise. “We have to figure it out. We are literally kind of writing the rules on how to make this industry scale and work.” (Joanne S. Lawton)