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Team Liquid co-CEO on why traditional sports owners are investing in eSports

Global eSports franchise Team Liquid recently sold a controlling interest to aXiomatic, a group that includes professional sports owners Peter Guber, Ted Leonsis and Magic Johnson. In an interview with S&P Global Market Intelligence, Victor Goossens, founder and co-CEO of Team Liquid, discussed how this strategic partnership stands to benefit both parties as well as the broader U.S. eSports industry. An edited transcript follows.

S&P Global Market Intelligence: Can you talk a little about what this deal will bring to the table for Team Liquid?

SNL Image

Team Liquid founder & co-CEO Victor Goossens

Source: Team Liquid

Victor Goossens:

From a financial perspective, this partnership gives us the opportunity to pursue decisions that will lead to the most long-term growth. As a company, we have always prioritized sustainability and we will continue to seek this. However, we've seen a lot of investment coming in as eSports continue to grow, and we have to compete with this changing landscape. This move equips us with the means and know-how in order to navigate this period of rapid growth and continue building our brand. We want to be one of the leading organizations in eSports, and we want our teams to have the best chance of winning titles.

From a strategic perspective, our partners will provide us with greater reach and contacts than we could have possibly achieved on our own. As with any industry, it takes some time for potential sponsors to get comfortable with something new. Our partners will allow us to explore these relationships and contacts.

And how does aXiomatic stand to benefit from this deal?

We offer an opportunity to become part of a fast-growing industry. There's no telling how big eSports can become in the next five to 30 years, and our partners don't want to miss out on this. The demographic that eSports targets is also attractive to investors, because our viewers skew a little younger than traditional sports. A lot of young people these days grow up playing video games. We will have more and more endemic eSports fans as our current fan base ages and new fans get introduced to eSports. It makes perfect sense for our partners to balance their portfolios because it expands their reach while still drawing on their love of sports and competition.

Another eSports franchise, Team Dignitas, was recently acquired by [NBA team] the Philadelphia 76ers. Do you expect this trend of pro-sports teams snapping up eSports teams?

There's definitely a lot of buzz around it right now. It just makes sense for traditional sports owners to invest in eSports because it helps balance their portfolios with a competitive industry that attracts a younger demographic.

I'm not privy to the details of the Dignitas deal, but I do know that they plan to retain their current management. I think that's something that investors need to prioritize when looking into eSports teams. Both sides have much to learn from each other.

The Chinese Administration of Education recently added eSports gaming and management to its list of authorized college-affiliate majors and activities. Meanwhile, there are some schools in Scandinavia that actually offer eSports athletics programs, and there is South Korea, where eSports players are treated like celebrities.

Do you believe this phenomenon is set to transition into the U.S. at this scale in the near future?

The transition is already happening, and it's quite an exciting time for eSports in the U.S. For example, the University of California, Irvine, recently opened their own eSports arena, which is set up with 80 gaming-quality computers and over 3,500 square feet of floor space. They also have an eSports scholarship, with five of their "League of Legends" players receiving around $15,000. Other universities, such as Robert Morris University, University of Pikeville and Southwestern University, just to name a few, also have eSports programs of different sizes. The National Association of Collegiate ESports launched recently, and the Collegiate Star League (CSL) has been in operation since 2009. We're also seeing an increasing number of tournaments being held in large arenas, such as "League of Legends" at Madison Square Garden. ESports athletes can receive athlete visas now, and we have a "Counter-Strike: Global Offensive" league on TNT (US). There are so many signs of eSports' rapid growth, and this is just the beginning.

Do you feel there are any obstacles that need to be overcome to ensure the health of the eSports industry in the U.S.?

The industry can definitely learn a lot from these type of parties coming in. We still have a long way to go in areas such as contracts, monetization, sponsorships and defining relationships between players, media and teams. That said, I still want to see our social media team to "meme" their hearts out and see Thorin [eSports analyst Duncan Shields] go on epic rants. I don't think anyone is coming in with a plan to change any of that. We want our fans to continue voicing their opinions — on Twitter Inc., on reddit, on our community sites — because none of this would have been possible without them. We're always listening to feedback and constructive criticism, and we're all fans at heart ourselves. Change is coming no matter what, and we can all be a big part of making that a positive experience.