The Rise of E-Sports As a New American Pastime

CHICAGOLAWBULLETIN.COM TUESDAY, JANUARY 13, 2015

Volume 161, No. 8 The rise of e-sports as a new American pastime

“sock-strewn tract explanations of e-sports tourna - house” with a ments and other lobbying efforts clubhouse/crash-pad eventually led legislators to say SPORTS MARKETING PLAYBOOK vibe and multiple “we have no reason to say no … Internet connections OK, this is legitimate.” oAn an ordinary side street in an While that attitude reflects a island city east of San Francisco. somewhat begrudging recogni - A bungalow in Venice Beach, tion of gamer-as-athlete, the Calif. A rented house in Hoffman policy has been described as DOUGLAS N. M ASTERS Estates. “groundbreaking” for e-sports. AND SETH A. R OSE What do these places have in And there are other signs that common? These ordinary spaces e-sports is joining the major have become the training facili - leagues. Douglas N. Masters is a partner at Loeb & Loeb LLP, where he litigates and ties for a new type of American Superstars and sponsorships counsels clients primarily in intellectual property, advertising and unfair athlete — the e-sport athlete. Gaming — both e-sports and competition. He is deputy chairman of the firm’s advanced media and technology “E-sports” refers generally to other gaming — has developed department and co-chair of the firm’s intellectual property protection group. He can video gaming set up to resemble superstar teams and players, and be reached at [email protected]. Seth A. Rose is a partner at the firm, where he conventional sports — they have the aim is that these teams and counsels clients on programs and initiatives in advertising, marketing, promotions, teams and uniforms, superstars, players will do for gaming what media, sponsorships, entertainment, branded and integrated marketing, and social playoffs, comebacks and upsets the repeat championship teams media. He can be reached at [email protected]. and rabid fans. But all the action like the Chicago Bulls or the in e-sports occurs online, and the Miami Heat have done for the Haag is actually one of six e- presented to League of Legends “athletes” don’t train by lifting sport of basketball. sports players on Red Bull’s gamers and a grand prize of $1 weights or logging miles but by One renowned gamer is a sponsorship roster, and the million — in the Staples Center “scrimming” — playing online Chicago native whose competi - company reportedly dedicates in Los Angeles. For the sake of scrimmages with friends — for tive career began at the age of 15. the same time, energy, money comparison, that audience was eight hours a day or more, a Matt “NaDeSHoT” Haag is a and training to him that it larger than the U.S. viewing training regimen that has been member of team OpTic, and he lavishes on athletes who compete audience for the last game of the described to be “as gruelingly excels at the popular war games in “real” sports. NBA Finals that year. monotonous as any pro athlete’s.” series “Call of Duty.” Haag’s training includes Unlike real sports, however, In addition, despite the name Spectators pack venues around working with a dietitian, brain ticket prices for these live events e-sport, the games that the the world to watch Haag play live, mapping by computer and yoga are not a major money maker for players and teams play are not and his YouTube channel ranks in classes where he learns how to the industry. Revenue is derived necessarily sports games the top 1 percent of the 220,000 stretch his overworked wrists. from fans paying to watch online (although they can be). channels tracked by OpenSlate, The brain mapping is reportedly live streaming of matches, ad ESPN President John Skipper the platform that collects aimed at helping Red Bull’s placements during those has declared that e-sports are analytics on ad-supported trainers and sports therapists streams, team merchandise and decidedly “not a sport, despite content on YouTube. design exercises to help Haag charges for goodies and enhance - the general rise of organized Haag has an exclusive deal stay calm and shoot better ments within the video games for video game competitions,” and with Major League Gaming, during play. recreational players. The “sports naysayers put down gaming for which calls itself “the NFL of Leagues, tournaments money marketing” model for a typical its lack of physical exertion. But Internet athletics” and which The rise in popularity of e- eSport team is to monetize the even the harshest critics concede hosts Haag’s live streams on its sports also has brought the hipness of players and the play that e-sports are mentally MLG.tv. Haag is the No. 1 player establishment of organizations with its core demographic (18 to demanding, that long gaming viewed on the MLG platform, such as the Sports Gaming 30-year-old men) through sessions require endurance and and because he is paid per League, which hosts tourna - broadcast and merchandise can be physically taxing and that viewer, Haag does everything ments based on the “Madden” exclusivity — owning team many pro and amateur gamers possible to keep it that way, and “NBA2K” video games, and names and brands, selling ads have unique talent, skill and including building a regular Major League Gaming, which into the teams’ live stream and determination in the same way social media presence and presents online video game YouTube videos and controlling that “real” athletes do. engaging in marathon live- matches as well as live annual merchandise sales. One team And in a big win for the e- streaming sessions to maintain contests, which are reportedly also produces videos for sports community, the U.S. his celebrity. attended by thousands of rabid companies such as Intel, eBay government in 2013 agreed to Usually, sponsorships for fans. and Papa John’s Pizza, recognize e-sports players as gamers come from companies Viewership for e-sports tour - promoting these products to its professional athletes and grant making controllers and head - naments can eclipse the young and affluent fans. visas under that identifier when phones, and they are modest. For audience for traditional sports Players may also be compen - gamers seek entry into the U.S. Haag, Red Bull, the energy drink championships. In 2013, 32 sated with room and board at for a match. company which backs extreme- million people worldwide team houses and often are Nick Allen, an e-sports sports athletes and competitions, watched a South Korea team win allowed to keep all of their cham - manager, reported that extensive is his primary sponsor. the Summoner’s Cup — a trophy pionship prize winnings, which

Copyright © 2015 Law Bulletin Publishing Company. All rights reserved. Reprinted with permission from Law Bulletin Publishing Company. can mean big money for star now, it’s my lawyer talking to his schools, they are not governed by whom play League of Legends) players. Haag reportedly was on lawyer. It wasn’t like that two the same regulations such as get up to 50 percent of their track to make $700,000 from live years ago.” grade-point minimums or time tuition and room and board streaming and his YouTube College clubs and teams limits on practicing that apply to (which runs about $39,000 a channel in 2014. Add in his spon - As professional e-sports grows, traditional college sports. And year), according to Kurt Melcher, sorships and contest winnings so does the community’s presence unlike college athletics, the best the university’s associate athletic and the gamer could gross one in the college space. More than eSports players can make money director. Melcher reportedly has million dollars or more. 10,000 college-age students now at it: A big tournament win can been taking calls from other And while accurate figures are play in the Collegiate StarLeague, sometimes earn players several athletic directors interested in hard to come by in the e-sports the biggest college e-sports years’ worth of tuition. establishing similar programs at world, top stars reportedly earn league — more than double the At least one school has started their schools across the country. annual base salaries “well into number that played last year and offering scholarships to its e- While, thus far, the NCAA, the six figures.” Apparently, almost double the number of sports athletes. The athletic which governs college athletics, being an e-sports athlete can be players who play on men’s department of Robert Morris has had “no comment” about e- a surprisingly lucrative career Division I college basketball University in Chicago created an sports on college campuses — choice in today’s gaming climate. teams. The league started at official video game team in fall and may never get involved in Steven Arhancet, owner of Princeton in 2009 and is now 2014, offering the same kinds of the regulation of non-athletic Team Curse, one of the most active at 450 schools. Because scholarships given to athletes competition — the growing trend successful U.S. e-sports teams, teams are more often sanctioned playing sports like soccer, means that some form of notes “[w]hen I negotiate a clubs at colleges that receive football and ice hockey. structure or regulation will be contract with one of my players practice spaces from their The e-sports players (all of coming in the near future.