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Up to 430K live viewers on Twitch witnessed Clutch Gaming pulling off the reverse sweep against its League of Legends Championship Series (LCS) competitor Team SoloMid in the North American Regional League of Legends Finals. This feat secured the team a spot in the Play-In Round of the League of Legends World Championships starting next week in Berlin, Germany. The tournament marks the last event for the team competing under its current brand as Dignitas announced today that it raised $30M USD to close its merger with Clutch Gaming and provide capital for expansion plans.
“We have done a really good job of acquiring a League of Legends team which is for us the biggest esports in the world,“ Dignitas parent company New Meta Entertainment CEO Michael Prindiville told The Esports Observer about the merger. “We think that we need to be in the biggest esports in the world, which typically is judged by things like viewership and the audience.”
From January 2020 on, Clutch Gaming’s League of Legends teams will compete under the Dignitas brand, which will mark the return of one of only three brands being part of the inaugural LCS season in 2013 competing in the league in 2020 (the other teams being Counter Logic Gaming and Team SoloMid).
Dignitas was acquired by Harris Blitzer Sports & Entertainment (HBSE)—the parent company of NBA team Philadelphia 76ers and NHL team New Jersey Devils—in September 2016. The organization applied for one of the 10 LCS franchise slots when the league was newly formed in 2018, but was not granted a slot.
Prindiville explained that “with Dignitas previously being largely wholly-owned by HBSE, really the last year has been about not just specifically our esports teams but figuring out a larger business around what I like to call digital sports and entertainment. Of course, that encompasses esports, but it also encompasses a lot of other things including the confluence of sports and gaming, sports, pop-culture, music, and all those things that are in the zeitgeist.”
Subsequently, the company was looking for strategic investors with resources and capabilities similar to HBSE’s who share the belief in the vision of digital sports and entertainment Prindiville pointed out. It found investors matching those requirements in its controlling shareholders HBSE and Fertitta Entertainment (FE), in addition to new institutional investors Susquehanna Private Equity Investments, Delaware North, and Loud Records founder and hip-hop pioneer Steven Rifkind.
“FE is such a wonderful partner because they have a massive portfolio, that, of course, includes the Houston Rockets and the Toyota Center in Houston,” said Prindiville about the company’s investors. “Delaware North as well, they are the owners of the Boston Bruins and the TD Garden in Boston in addition to a much larger business serving traditional sports venues in North America and Europe. Our global content vision is one that they felt perfectly in line with and have direct synergies to, so essentially, we couldn’t have found better partners.”
Following the investment, Dignitas formed a new parent company called New Meta Entertainment (NME). The company will not only operate Dignitas’ and Clutch Gaming’s esports teams but, as Prindiville laid out, is also “building out a primarily three-tiered business between esports, our content & marketing business, and investments. Roughly, we are looking to allocate the proceeds from the capital raise even across those three.”
The deal is by no means a one-way street. While NME will benefit from assets, infrastructure, and knowledge built through decades of operating in sports, its investors can expect to profit from synergies as well. Prindiville describes the 76ers’, Devils’, Bruins’, and Rockets’ business: “…they are sports where people show up live and in-person in arenas, they sit down in seats, they eat popcorn and drink beer. That model, of course, makes sense on some level for esports for the larger competitions, but really just like everything else that we see in this world over the last 20 years things are becoming digitized, and sports is sort of I would say the last great main stake that is becoming digitized.”
We are certainly already accretive to that when we do things like host the Rocket League World Championships at the Prudential Center which we did last June,” he said about forming synergies with the ownership group. “But they recognize, as do we, that competition and eyeballs are simply moving into a digital route. That’s where our business is, and that’s how we’re accretive and synergistic with traditional sports entities, who are understanding that evolution is the natural process around competition and entertainment.”
A Backstreet Boys concert taking place in the HSBE-owned Prudential Center in Newark last week paints an example of how synergies between the esports and traditional entertainment assets can look like. “It turns out that Nick Carter is a massive Counter-Strike fan. So we took one of the members of our World Champion Counter-Strike female team, Amanda “rain” Smith, and she basically sat and played Counter-Strike with Nick Carter one versus one for 45 minutes before their big show. We were able to capture all the content and have a nice synergistic exchange via social media.”
Furthermore, Prindiville is looking to help his investor group to connect to a younger audience through the NME assets. “The reality of the situation is that some traditional sports are definitely easing out, we’re seeing it with golf, we’re seeing it with baseball. Whereas the esports audience is dominated by that broad 15-to-35 maybe 40-year-old category.”
Recently, a trend within esports organizations of pushing for global brand expansion is emerging. The American organizations Immortals Gaming Club (IGC) and Pittsburgh Knights are current examples of this development with IGC’s MiBR brand in Brazil and the Knights’ brand in Mexico. In the case of NME, the company is expanding from North America by building out teams, ideally with strategic partners in Europe and Brazil, said Prindiville.
“China would be the next step thereafter. Certainly, we’re fortunate with some capabilities to our ownership group already with relationships in China. I think ultimately there are a number of compelling regions that we’re also considering including Australia, the Middle East, and eventually Africa as well,” he continued. “Truly, gaming, esports, and the consumption of competitive gaming are 100% global, and Dignitas is building a global brand to service that community.”
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