The Philadelphia 76ers is now the first American sports franchise to acquire an eSports team.
The Philadelphia 76ers and venture firm NextEquity have purchased a majority stake in leading eSports franchises Team Dignitas and Team Apex, making the Sixers the first U.S. sports organization to control a professional gaming outfit.
Team Apex The two eSports franchises will be combined under the Team Dignitas name and will be run separately from the basketball team. Sixers executives believe the eSports investment will give them an entry for sponsors into a younger, male-dominated demographic that defines the white-hot eSports industry. Sixers executives also are betting that Dignitas will rapidly appreciate with access to the 76ers’ deep pockets and its business and sales infrastructure.
“This is a really fun property that we think has a really big upside,” Sixers CEO Scott O’Neil said.
Financial terms were not disclosed, but an industry source estimated Team Dignitas to be valued in the mid-to-high seven figures. Terms of the partnership between the Sixers and Silicon Valley-based NextEquity are not known.
The gamers will retain their separate identity from the Sixers and won’t be integrated into NBA marketing, except for possibly some minor cross-promotions involving interested players, O’Neil said.
Along with sponsorship sales and resources for player development, the Sixers will focus on helping Dignitas create and distribute social media and digital content. Esports players often practice in front of live fans watching remotely, and content creation and advertising is a key revenue stream for many teams.
“I think that an organization that has an operating relationship with an NBA team has a distinct competitive advantage in terms of resources, access to corporate partners, and database brand experience,” O’Neil said.
The prospect of esports ownership for Sixers owners Josh Harris and David Blitzer began nine months ago when NBA Commissioner Adam Silver spoke to owners of the growing esports business, sparking the team’s interest.
“Commissioner Silver was talking about the power of esports, and when you work for guys like Josh Harris and David Blitzer and they hear some on the incredible numbers and just sheer eyeballs, they turned and said we should take a look at this,” O’Neil said.
Veteran digital media executive Greg Richardson will serve as chairman of Team Dignitas. He founded free mobile video game developer Rumble Entertainment, where he is executive chairman, and was formerly a partner at Elevation Partners, a digital media-focused private equity fund.
Team Dignitas managing director Michael “ODEE” O’Dell and Apex’s leaders David and Michael Slan will remain as large minority shareholders and will focus on competitive excellence, Richardson said. The Sixers will hire a CEO and staff for the video game division.