League of Legends' E-Sports Contests Lure Newest Fan: Major League Baseball
December 16 2016 - 7:29AM
Dow Jones News
By Sarah E. Needleman
Major League Baseball's streaming-technology unit is looking to
break into the hot arena of competitive videogaming by partnering
with the creator of one of the world's most popular computer
games.
The agreement, expected to be announced Friday, calls for MLB's
BAMTech to pay a minimum $300 million through 2023 to Tencent
Holdings Ltd.'s Riot Games for the exclusive rights to stream and
monetize "League of Legends" competitions.
BAMTech, a spinoff of MLB Advanced Media that counts Walt Disney
Co. and the National Hockey League as stakeholders, plans to launch
a streaming app for "League" in 2017 that will run on smartphones,
PCs and other devices. It also will handle distribution of "League"
content it streams on other platforms, such as Amazon.com Inc.'s
Twitch.
The companies plan to make money from advertising and
sponsorship sales that BAMTech will oversee. Revenue generated
beyond $300 million will be shared, though the companies declined
to detail the percentages of the split.
The deal shows the rising prominence of competitive videogaming,
or e-sports. It is projected to make up roughly 10% of U.S. sports
viewing by 2020, consulting firm Activate Inc. said at the WSJDLive
Conference in October.
In e-sports, players belong to teams, wear matching jerseys and
boast massive fan bases on social media -- much like traditional
sports. In October, more than 43 million viewers world-wide went
online to watch a championship held at the Staples Center in Los
Angeles before a crowd of about 15,000 people.
"No other sport has seen this kind of global online audience for
live events," said Bob Bowman, MLB's president of business and
media, and chief of MLB Advanced Media.
BAMTech's deal with Riot is similar to its tie-ups with the NHL
and the Professional Golfers' Association, in which it pays to
stream content. Unlike those deals, Riot doesn't plan a
subscription fee for viewing "League" competitions, though it may
charge for premium content in the future.
In deals with entertainment companies such as Time Warner Inc.'s
HBO, companies pay BAMTech a flat fee to create apps and handle the
technology for streaming content.
"League," which is free to play and makes money by selling
virtual goods, has more than 100 million monthly users world-wide,
according to Riot. It is on track to generate $1.89 billion in
global revenue this year, according to SuperData Research Inc.
"Our goal has always been to build 'League of Legends' into a
major global sport," said Jarred Kennedy, director of e-sports at
Riot. "We want our sport to be funded by itself and we think this
deal is going to help us get there."
Riot so far has relied on third-party streaming services such as
Twitch and Alphabet Inc.'s YouTube to broadcast "League"
tournaments. With its own app, Riot can build custom features such
as player profiles and video on demand. It believes the coming app
will offer fans "a better experience," Mr. Kennedy said.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
December 16, 2016 07:14 ET (12:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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