The esports industry has been on fire lately, with the 12 highest-value teams now collectively worth around $1.7 billion. Add to this the fact that there have been 63 deals worth $2.34 billion conducted in 2018 alone, and it comes as no surprise that many established corporations, brands and advertisers are looking for ways to move into the space.
Seeing this emerging market need, esports pioneer and Major League Gaming (MLG) co-founder, Mike Sepso, decided to launch Electronic Sports Group (ESG), a global advisory firm to provide expertise and strategic insight into the esports industry. The firm is set up to act as a strategic business and financial advisor to the senior management of established and emerging media, entertainment, technology and finance companies.
“A lot of my career in esports has been explaining the world to investors and advertisers as to how to successfully engage with [esports] audiences,” Sepso told SludgeFeed. “Now that we’re seeing the next big wave of esports commercialization, there’s a lot of capital looking to be deployed.”
Sepso explained further that the types of organizations interested in esports are wide-ranging, with perhaps the most notable being traditional sports teams, which are using esports as a means to gain insights into the future sports media fanbase.
To date, the Golden State Warriors, Philadelphia 76ers, Houston Rockets, Sacramento Kings and Cleveland Cavaliers have all invested in esports teams. Even Michael Jordan recently made a major investment in the industry, leading a $26 million financing round for aXiomatic, owner of TeamLiquid.
The firm already has a number of strategic partners, including Sports Media Advisors (SMA), which will advise clients seeking media and esports expertise, and Nielsen, which will supply ESG with esports fan insights and sponsorship valuation data.
Sepso founded ESG alongside Bobby Sharma, a senior executive who was previously the VP and general counsel of the NBA Development League, in addition to serving as an SVP at IMG, where he oversaw the creation, development and management of basketball, soccer and cricket properties around the world.
Ken Hershman, the former president of HBO Sports, has also joined the firm as a partner, rounding off the talent-heavy consulting team.
Prior to ESG, Sepso served as an SVP at Activision Blizzard (ATVI), which acquired MLG in 2015 for $46 million. While at Activision, Sepso established and led the company’s first esports and media division, in addition to launching The Overwatch League (OWL).
Sepso also recently became a strategic partner and investor in the ownership group behind the NYXL, the New York OWL franchise, and is a co-chair of the IAB’s first working group on esports.