The Tide is High: Sixers Lead A Wave of NBA-Fueled Esports Investment

This week, the Philadelphia 76ers changed esports. On Monday, the NBA franchise acquired two esports teams, Team Dignitas and Apex Gaming, which they intend to merge together under the Digitas banner to compete in the League of Legends Championship Series.

This wasn't entirely unprecedented. Overseas soccer clubs like Manchester City, Wolfsburg and Schalke 04 have acquired organizations or signed individual players. Closer to home, individual athletes like Rick Fox, Shaquille O'Neal and Alex Rodriguez have all thrown their weight behind various esports projects. But no American sports franchise had ever directly invested in an esports team.

Already, there have been aftershocks.

The next day, Team Liquid announced a strategic partnership with Golden State Warriors and Los Angeles Dodgers' co-owner Peter Guber, and Ted Leonsis, who owns four Washington D.C. franchises, including the Wizards and Capitals. The group also includes NBA Hall of Famer Magic Johnson and AOL co-founder Steve Case, among others.

Then, the Immortals organization announced that Memphis Grizzlies co-owner Stephen Kaplan has upped his stake in the organization and will join the company's board.

According to Sixers CEO Scott O'Neil, the seeds for the team's investment were sewn on a league-wide conference call with NBA commissioner Adam Silver.

"That's when the light when on," he said. "The numbers were just staggering, from the amount of players to the viewership … As talks continued, we realized there was a synergy in our buildings not only to host events but also where we might add value in terms of our ability to sell and market and engage on social media, PR, all of that."

Monday's deal was a culmination of nine months of negotiation between the organization and the two esports clubs. Michael O'Dell, formerly Team Dignitas' owner, will stay on as the team's president, a move designed to smooth the Sixers' transition into an arena that O'Neil readily admits they have much to learn about.

"We knew what we didn't know," he said. "We couldn't build a team, we need to actually know people who know what they're doing, how to develop talent, and understand the industry."

The endgame?

"I don't want to 'Sixerize' Dignitas or 'Dignitize' the 76ers or whatever," he said with a laugh.

Still, O'Neil hopes to inject the Sixers' resources and experience with player development into esports, citing wellness, nutrition, health, sleep as areas that he hopes they can elevate "to a level that hasn't been done in esports."

This leads to a natural tension, one that could set the tone for how the franchises that inevitably follow in Philadelphia's path handle their esports acquisitions. Where is the line between improvement and over-tinkering? In O'Neil's case, he'd rather err towards the former than the latter.

"Look at the [Chicago] Cubs or the [Boston] Red Sox: They're two examples of long standing brands, everyone knows them, and they've been in the game forever," he said. "They didn't have the most dominant teams. Dignitas is always in the mix as well. With those teams, you have new ownership come in and all of a sudden you see more results, more fans, and more winning. That's the impact we want to have. You surround yourself with good people, give them the resources to be successful and get out of the way."

O'Neil also said that he hopes that the relationship becomes reciprocal, "not just what we can incorporate into esports, but what we can take from esports and incorporate into the Sixers."

Even a detached investment model should pay dividends, by offering esports—a burgeoning enterprise that still has rough edges—a shot at some desperately needed sustainability. While certain players amass huge incomes, there are far more who are just getting by or even struggling despite long hours and almost nonexistent vacation periods. An influx of stable financial backing and preexisting corporate infrastructure could spur the industry toward climbing higher and faster than it would go on its own, simply because teams will be freed to focus on growth instead of worrying about whether or not they'll exist in a year.

And just like in the NBA, where the long-rebuilding Sixers may finally be on the rise, O'Neil expects to soon make waves in esports. "You should listen to the footsteps, because they're coming," he said. "You'll hear them."

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