I am going to cut right to the chase and offer up some bold predictions.
The NBA’s new strategic partnership with Take Two Interactive to create an eSports league will result in the following:
The NBA will surpass soccer in global audience numbers
The NBA will make more revenue (and higher profits) from partnership deals in the next five years from eSports than all existing partnerships and TV deals put together from the last 10 years
The youth market’s declining interest in sports will begin to turn around
We will start to see the end of TV rights deals as eSports will finally show the NBA and individual teams that streaming services will win rights deals in the future (keep reading for my predictions of who will win this race)
In 10-15 years, the NBA will solely operate as an eSports league
When I first heard the official news that the NBA and Take Two Interactive (makers of the hugely popular “NBA 2k” video game franchise) agreed to join forces to create an eSports league, my first thought was… finally. eSports leagues have been around for a number of years, and it has been surprising that not until 2017 do we finally see a professional sports organization grabbing a piece of the pie. While I am incredibly happy the NBA, the sports league I have followed the most passionately since 1989, stepped up first, instead of the cash cow that is the NFL, eSports will be the real winner in the end. I have been spreading the good word about eSports for quite a long time (at one time even devoting a dedicated blog to it), but now it is proving to be cool enough for the “real” pro sports organizations to take notice. We knew it was only a matter of time before news like this would come out, especially after hearing teams like the NBA’s Philadelphia 76ers and the NFL’s Miami Dolphins have already made investments in eSports teams. Hell, the Houston Rockets hired a director-level person to head up their new eSports initiative (where was I when the job posting came out?!?!?).
So now the deal is done, and while the ink is just about dry, here are some of the explanations for my predictions I started this piece with.
eSports has a global audience base, and now the NBA can use it to overtake soccer
Despite the NBA’s successful efforts in markets outside of the United States (specifically Mexico, India, and China), soccer and it's closely related variations still reign supreme in terms of audience size and brand reach. By adding eSports to its roster of products, the NBA is tapping into a market that is truly global. eSports is worldwide, from its teams to its players to its viewers. Teams play each other virtually and the sport has mastered online streaming for its audience. If done correctly, the NBA can capture some of that lightning in its own bottle.
The revenue potential from eSports will change the NBA forever
With that large, global audience comes a lot of eyeballs. Like millions. For a league like the NBA which can see anywhere from 15,000-20,000 fans in an arena on a single night for one match up, can now expect to see millions of online viewers for that same matchup between two eSports teams on the same night. Can you even begin to imagine what the e-matchup between the Warriors and Cavs might look like?
I am weary about early reports that the NBA is going to try and sell tickets to eSports events. That won't work. Seriously, it won't. If the NBA can prove me wrong, I am more than okay with that, but the focus needs to be sponsorship. eSports audiences are already trained in seeing partnership messaging and they are okay with it. Single jersey patches for real NBA teams? That is pocket change in eSports where teams sport jerseys with multiple partnership patches worth more value due to audience size.
Another huge driver of revenue will be merchandise and hardware. If the NBA thinks they do well in jersey sales now, eSports will triple that expectation. And since eSports are known for partnering with hardware manufacturers, if the NBA sinks their teeth into that, they could sell branded controllers, gaming rigs, and much more.
Now the NBA will be able to tap into way more partnership money, so I hope they ditch the straight up ticket model. With a focus on partnerships, the NBA will surpass all traditional partnership revenue, times two, over the next five years.
Youth will rediscover not only the NBA, but professional sports in general
It is no secret that youth are playing less and less sports, and that translates to less interest in the professional versions of those sports. These youth are completely digital and interactive. They don't want to sit and watch a game, they want to be in the game. Sure, things like VR and AR will help traditional pro sports, but in general, eSports hold their interest more. If marketed right, the NBA can reintroduce its sport to the younger generation.
The way eSports is consumed will change the way traditional pro basketball is consumed
Sure, you can flick on the TV occasionally now and watch a League of Legends tournament, but most eSports is consumed online. This change in model that the NBA will have to adapt to will actually make them rethink traditional TV contracts. I know first-hand they are already thinking about this, but eSports will accelerate it. In fact, I believe the the HUGE TV contract the league just started with TNT/ESPN/etc will be the last of its kind for the NBA.
My prediction for the last couple of years has been that YouTube will make the NBA an offer it can't refuse in the next go-around. The league already works closely with Google on several different fronts, so this would not be a surprise move. I do think there is a dark horse in that soon-to-be race… Netflix. Even Amazon at some point could bank the money to get the NBA to be all online streaming, especially since they own Twitch.
Either way, the NBA will find with eSports that the audience won't watch the NBA’s on-the-court product if it doesn't work the same way as their eSports viewing habit. And NBA League Pass is not the answer.
By 2030, the NBA will only be an eSports brand
I know, this is a bold prediction, but I believe it. I mean, look at the numbers. eSports has the potential to generate way more revenue with way less overhead and operating expense. That means higher profit margins. The player contracts will be WAY LESS expensive, not to mention risk to owners not having to worry about guaranteed contracts mixed with nagging knee injuries.
And that is just owner and team considerations. From a fan perspective, digital players will surpass real ones. They will get a better, more personalized experience. In a lot of cases, it will be easier to rout for a virtual player and the gamer than some of the real players that will still be around.
There are still a lot of unknowns
There are still a lot of things we don't yet since the announcement came out. We know the plan is for each team to have an eSports team, that there will be a draft of some sort, players in the game will not resemble real NBA players, the "eSeason" will follow a similar flow of a regular NBA season, and that play should start sometime in 2018. It has been acknowledged by the NBA that probably not all teams will be setup to have an eSports team of their own right away, so 15 starter teams might be more realistic.
So as you can see, still a lot of questions marks, but exciting nevertheless. And most likely a game changer for the NBA for years to come.