2016 Sport Marketing Association Conference (SMA XIV)

NCAA eSports 20XX: The Potential for Radical eSports Adoption within Intercollegiate Athletics

Dylan Williams, University of Alabama Margaret C. Keiper, Northwood University R. Douglas Manning, Southern Mississippi University Seth Jenny, Winthrop University Patrick Tutka, Niagara University

Thursday, November 3, 2016 25-minute oral presentation 8:30-8:55 AM, Circle East (including questions)

In 2014, ESPN partnered with Valve Corporation to broadcast The International Dota (Defense of the Ancients) 2 Championships, an annual electronic sports tournament centered on Valve’s Dota 2 video game (Wingfield, 2014a). The network broadcasted a preshow for the event on ESPN2 while hosting the tournament on its streaming service, ESPN3 (Tassi, 2014a). The 2014 tournament awarded just over $5 million in prize money to the winning team, with the second and third place teams earning $1 million each (Wingfield, 2014b). These payouts marked the highest paying purse in the history of eSports.

Despite The International’s record payouts, it is not the only major tournament within eSports (Keiper, Manning, Jenny, & Olrich, in press). In 2013, the League of Legends (LoL) World Championship Final (WCF) was hosted at the Staples Center in Los Angeles, California and attracted 11,000 fans to attend the event (Tassi, 2013). One year later, the LoL WCF was moved to the World Cup Stadium in Seoul, South Korea where 40,000 fans sold out the arena and 32 million viewed the event via live streaming (Tassi, 2014b). Additionally, Draft Kings, one of the top companies in the daily-fantasy market, began taking wagers on eSports starting with the 2015 LoL WCF (Grubb, 2015a).

With the growth of eSports and the engagement by several high profile sport entities, one could expect for eSports to continue to grow and potentially expand into the collegiate ranks, following several prominent early adopters. According to Mueller (2015), at least five colleges have adopted eSports as an official varsity sport: a) Robert Morris University; b) University of Pikeville in Kentucky; c) Maryville University; d) Southwestern University; and e) Columbia College. Keiper et al. (in press) also noted many colleges across the country have active eSports club teams competing but are not endorsed by their institution as an official varsity sport. These schools recognize the value of eSports, which attracts over $500 million in sponsorships, 28% less than the National Basketball Association (NBA) annual total (Grubb, 2015b).

The growth and level of sponsorship with eSports could be very beneficial for several university athletic departments that are struggling financially. According to Fulks (2015), only 24 universities affiliated with the National Collegiate Athletic Association (NCAA) Division I reported positive net revenues during the 2014 fiscal year. Because eSports competitions boast attendance (and internet-based viewing) numbers that rival many major sporting events, eSports could be a significant innovation adoption that could improve each school’s financial affairs.

In general, innovation is “a process that includes the generation, development and implementation of new ideas and behaviors” (Damanpour, 1996, p. 694). Innovation is regularly interchanged with technology since many innovations related to technology advancement. In other words, one may consider an innovation to be based in hardware (i.e., the physical object represented by the change) or software (i.e., the stored information needed to use the tool). However, technology represents actual physical products or change that may occur in business, industry, academics, or sport as well as concepts or ideas that are significant to society-at-large (Greenhalgh, Robert, Macfarlane, Bate, & Kyriakidou, 2004; Redmond, 2003). Innovation is also distinct from the word invention as invention involves the first known incidence of a new concept while innovation reviews an invention’s implementation and how organizations can obtain the invention’s full potential (Jalonen, 2012; Livia, 2014).

Indianapolis, IN November 2-4, 2016 2016 Sport Marketing Association Conference (SMA XIV)

According to Damanpour (1987), there are three major types of innovation: a) technological; b) administrative; and c) ancillary. Technological innovations focus on the results of a company’s adoption of a new technique, device, or system. Administrative innovations occur when the innovation affects the organization’s process of management, the allocation of resources, and/or the awarding of rewards (Kimberly & Evanisko, 1981). Finally, ancillary innovations are technologies occurring outside of the normal organization’s control.

Beyond these typologies, innovations are based on the amount of change required. Gopalakrishnan and Damanpour (1997) identified two different types of innovations in relation to change firms analyze when considering adoption: a) radical and b) incremental. Radical innovations require organizations to move into new and possibly unknown and uncomfortable directions as new and foreign practices or processes are quickly adopted by a firm (Chandy & Tellis, 2000). Incremental innovations involve small changes to pre-existing systems and occur inside the organization itself due to the suggestion of key stakeholders (Damanpour, 1991). While incremental innovations are typically internal improvements, radical innovations provide firms with something new and different from any process previously used by the organization (Marvel & Lumpkin, 2007).

In order for firms to innovate, an organization must have the necessary resources and willingness to create new concepts and ideas in addition to transformational leaders (Vincent, Bharadwaj & Challagalla, 2004). The better the resources available to the organization, the more likely it is to innovate (Barney, 1991; Damanpour, 1992). Firms failing to adopt an innovation risk potentially seeing the new idea or concept disappear. Failure to adopt an innovation can lead an organization’s stakeholders to feel frustration or dissatisfaction with current products, processes, or machinery used. However, firm members can possibly feel similar frustration when managers introduce new ideas or concepts to employees to help improve the firm without information on why the change was necessary (Rogers, 2003).

Interestingly, eSports in general is facing a significant struggle for its legitimacy from many within the sport community, which may delay the sport’s potential adoption by many prominent universities. For example, ESPN President John Skipper identified eSports as a competition opposed to a sport, classifying eSports similar to checkers and chess (Tassi, 2014b). Similarly, former ESPN radio host Colin Cowherd declared he would retire from sports broadcasting if ESPN forced him to cover video game tournaments (Gilbert, 2015). Despite these acclimations, eSports has continued to grow and advance into intercollegiate athletics.

Additionally, eSports can provide universities opportunities to expand their cultural diversity efforts. While Lapchick, Fox, Guiaco, and Simpson (2015) highlighted the NCAA was very diverse in regards to student-athletes, they noted many schools show underrepresented populations among Hispanic, Asian, and American Indian ethnicities. Because one of the main racial demographics represented within eSports are Asian-American players (O’Neill, 2014), universities would be provided opportunities to expand their brand awareness while also increasing access to higher education for students and fostering student growth in academia and social situations (Gurin, Dey, Hurtado, & Gurin, 2009).

The purpose of this presentation is to provide an analysis of current and potential future radical adoptions of collegiate eSports programs among NCAA and National Association of Intercollegiate Athletics (NAIA) member universities. The economic growth of eSports and the potential positive implications of adding eSports to a collegiate athletic department will be highlighted. Focus areas for discussion include higher student-athlete participation numbers, potential increased revenue generation, increased marketing opportunities, and creating greater diversity within the athletic department.

Indianapolis, IN November 2-4, 2016 2016 Sport Marketing Association Conference (SMA XIV)

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Indianapolis, IN November 2-4, 2016 2016 Sport Marketing Association Conference (SMA XIV)

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Indianapolis, IN November 2-4, 2016