May 26, 2017

With projections estimating that the global revenue derived from eSports will rise to over $1BN by 2019, eSports can no longer be considered a niche market. Global audience figures during 2017 are also estimated at 335 million, with as many 21-35 year olds now watching eSports as baseball in the United States.

With the value of prize money and sponsorship opportunities growing at pace, the natural question to ask is whether eSports will start to enjoy broadcasting revenues anywhere near the scale of some of its traditional counterparts? Some eSports teams and gamers may have access to streaming-derived revenues especially outside of formal competitions, from platforms such as Azubu, Hitbox or Amazon-owned Twitch, but it would be unusual for them to have a stake in any lucrative broadcast agreements (which themselves are presently scarce).

In sports such as Premier League football, media rights deals are entered into by the league on behalf of the participating clubs, pursuant to some form of collective licensing arrangement and revenue then shared between
them. In eSports no such central licensing arrangements exist – it is a more fragmented market without a dominant overarching league or principal tournament.

There is nevertheless a real opportunity for the eSports industry to harness. In terms of broadcast arrangements relating to these commercial rights, we expect that the variables will largely mirror those we have encountered
during our many negotiations in the media and entertainment sector over the last 20 years. The complexity of these negotiations will increase as the market develops, particularly around exclusivity.

As the eSports market matures and revenues grow, it remains to be seen whether the licensing structures can ever produce transmission revenues which reflect its popularity.