Business of Esports TV: Sponsorship Restrictions

(Livestream #132)

In this segment, we discuss COD League and Overwatch League loosening sponsorship restrictions to allow more adult sponsors, such as liquor and betting companies.

The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full livestream here:

Paul Dawalibi 5:10
And the headline here is Call of Duty league and Overwatch league loosened sponsors, ship restrictions, will allow betting and liquor sponsors. Now, I don’t remember if the article mentions this, but Activision Blizzard especially has been very careful about the sponsors, they bring into both franchise leagues. Up until now, they had rejected anything that was even remotely like 21 plus. And so this is a big course change for them. And I’m curious what you guys think in terms of the why, and what do you think the implications might be here?

Lindsay Poss 6:16
Okay, so I had actually, I had sent you guys a different article this weekend. I’m not sure if you got a chance to read it. But essentially, the article was about how a lot of sponsors were pulling back from Overwatch league sponsorships, and looking at streamers instead. So

Paul Dawalibi 6:34
this one,

Lindsay Poss 6:35
let me look up the actual article, but I sent it and I knew you guys weren’t gonna read it because it’s called gaming influencers or the future of Esports. Oh, yeah. There was actual stories in here. Like there’s a Houston outlaws player who actually quit and went to twitch and like made a lot of money. The head of United talent agency says streaming is the way for companies to make money off of Esports athletes. Like there was a cup I’m looking now

Paul Dawalibi 7:05
how are you tying this back to feels like a different? Yeah,

Lindsay Poss 7:09
no, I’m saying that. Like you’re seeing streamers and other people specifically leaving Overwatch league to go seek other money making opportunities fair. So adding in sponsorships for things like liquor and betting that might actually be attractive to a younger audience. Or a way to engage younger audience. It seems

Paul Dawalibi 7:29
like these sponsors will bring a younger audience to their franchises. Oh,

Lindsay Poss 7:34
yeah. Yeah,

Paul Dawalibi 7:37
I think Overwatch league match was sponsored by Bud Light. It’s gonna get more under 21

Lindsay Poss 7:45
I think there’s no not under over 21 but there’s, there’s a the, I mean, there’s a again, like I’m from this generation. So people aged 20 to 30 have a lot of disposable income have a lot of time on their hands that are generally very engaged with eSports Yeah, bringing in a liquor sponsorship and allowing betting as a way to further engage that audience imagine like Bud Light sponsoring a tournament or a game or whatever, like, just makes more sense to me than losing sponsorship.

Jeff Cohen 8:12
While you’re arguing Lindsay is a little bit like the tail wagging the dog a bit like I don’t know if the ads are going to create more engagement, but I think it’s a good moneymaker. And I understand why those ads want that audience. So I think it’s kind of a win win for both the league and for those sponsors. I’m not sure that having those sponsors like nobody’s like, you know, I’m now I’m gonna watch more Overwatch league because I can see DraftKings ads like, hell yeah, so awesome. Like, you know, there’s a Budweiser ad like, cool. I’m gonna, I’m gonna watch more. But but it’s a money making thing. And I think this was inevitable, you know, because if you look, if you watch any sort of sporting event on TV these days or anywhere you watch it, you know, you see a ton of sports betting ads, and beer ads, and then car commercials and a bunch of other ads as well. But those are two massive categories. So it’s a bit surprising that the Overwatch league had, particularly for a league that I think is viewed as hurting for revenue maybe is a strong word, but they’re still in their infancy and they need revenue streams. Why would they be holier than thou and kind of not accepting money from a beer sponsor? Like it’s not like, you know, something explicitly bad? or legal? I mean, it’s, it’s beer, it’s alcohol, they get very interesting. Yeah,

Paul Dawalibi 9:32
sound is the story of Activision Blizzard franchise leagues like in a perfectly encapsulated nutshell, right? It’s high hopes, high dreams, over over promise, right? We don’t need you know, betting and liquor sponsors were family friendly. Millions of people will come watch us, right. We don’t need to go to that into the gutter with the rest of the you know, the sportswear were just so much bigger and better. Right? And and then the product under delivers. And now they’re scrambling for revenue, right? Like how do we keep the ship afloat, basically. And so do you guys feel like this? smells of desperation? Right? Because they did toe the line of where family friendly were better than this. They didn’t say that publicly, obviously. But a lot of the actions implied that right. And, and now the you go you make this 180 turn. I don’t see I don’t see this as like Oh, very strategic. You know, if it’s we’re desperate. We need we need coming in. I don’t know if you guys don’t agree with that.

Lindsay Poss 10:40
I definitely see it like that. I just think that the the ability, the betting and usually the liquor sponsorships, or alcohol sponsorships in general, come with more fan engagement experiences, but I also think that they’re hurting for that was my point. This is a way to better engage fans. Now. This is a way to drive fans to them, but it’s a way to better engage fans.

Paul Dawalibi 10:59
Okay, so there’s some downside here. Do you think losing the family friendly label? Will it hurt viewership at all?

Jeff Cohen 11:06
I mean, this isn’t like the 1960s like, alcohol,

Paul Dawalibi 11:10
parents,

Jeff Cohen 11:10
not family, friends.

Paul Dawalibi 11:12
You think there’s no parents that would just say, I’m not taking my kid to an overwatch league match? Or I’m not letting them watch Overwatch league on YouTube? Because every 10 minutes, that’s Bud Light.

Jeff Cohen 11:25
I mean, there might be some very small portion of people who do that. But I think we’re kind of past that, you know, like, these ads have become so mainstream. Like, you can’t watch a baseball game you can’t watch, you know, the friends reunion without seeing a Budweiser. Like it’s just, maybe those aren’t great examples. Like 1000, but you are so mainstream

Paul Dawalibi 11:48
friends and Major League Baseball. Really go after that. 13 to 18 crowds, that

Jeff Cohen 11:55
might have been the two worst examples I could have possibly came up with. And I have no idea why I came up with those two. But anyway,

Paul Dawalibi 12:02
for everyone listening, friends, was the show in the 90s. Okay, because no, oh, my gosh.

Jeff Cohen 12:09
The point is, they’re very mainstream. So I don’t think I think this is more of a why why was their policy in the first place? versus, you know, why did they make it now? Like, I think this was I think it was a mistake to ever have not allowed those ads, versus it’s a mistake now to allow them.

Paul Dawalibi 12:26
And because they were they thought, I’m sure that by being family friendly, you would get a whole category of audience that would feel more comfortable spending money going to an overwatch league match than they would taking their kids somewhere else.

Jeff Cohen 12:44
Do you think they possible that this was a strategic response to maybe their viewership is actually skewing older than they thought? So they thought it was going to be mostly 13 to 18. And now it’s actually mostly 18 to 30. And they’re like, Well, okay, now that we see what our audience actually is, why are we limiting ourselves? Like maybe there’s some actual rational thought to this versus more of a, we seem to be positioning as like a retreat, or a desperation play? Maybe it’s what we thought the data was gonna be this the data turns out, it’s that so we change our strategy based on that. Like, that’s, that’s what’s good companies theory, someone

Lindsay Poss 13:22
just watched a football game and saw the Clydesdale horses, and he’s like, Oh, we can do that, too.

Paul Dawalibi 13:28
I mean, if you give them too much credit, I think I really think which is this the ship’s going down guys, like, what can we do? Right and that right, and I’m sure they had turned down liquor and, and betting sponsors previously, and so the easy sort of solution was, Hey, you know, Budweiser called us like six months ago. Let’s just go back to them and see if they still want to do a deal.

Jeff Cohen 13:56
Let’s not forget crypto was the article that said crypto and well Yeah,

Paul Dawalibi 13:59
I was gonna say Christian, is this the same article?

Jeff Cohen 14:02
article? I think it was in addition.

Paul Dawalibi 14:06
I mean, the article that I brought up doesn’t mention crypto, but it may have been part of that story.

Jeff Cohen 14:10
I thought there was something I saw

Paul Dawalibi 14:15
and then new sports says yeah, we’re gonna get to this new sports. The Sony betting patents we will get to that. This word says so ESL purchase starts to make sense. What would What are you referring to there? I’m not sure. dl spent 70% of their budget on ads.

Jeff Cohen 14:38
DraftKings is what I meant to say. Oh, customer. So okay, so this, this is an interesting so the article I pulled up. It says in addition to gambling and alcohol, there’s two other new sponsorship categories, crypto and armed forces, which is interest Okay. I don’t know what to make of that. I mean, you know, the crypto is a whole conversation we can go down like that’s a rabbit hole in and of itself. I’m not sure why they weren’t allowing crypto, maybe that was just some internal rule. But seems there’s nothing inherently inappropriate about crypto besides the fact that it’s probably just a giant bubble. But the Armed Forces one is interesting and kind of plays into the fact that maybe they are looking at the data and saying, hey, this does skew older, what what is appropriate to market to an 18 to 30 year old that isn’t appropriate to market to a 13 to 18 year old, and join the military probably is one of those things. So

Paul Dawalibi 15:42
or it’s just that the military has made it known to the gaming world that they have millions of dollars to spend on recruitment. And those dollars are, you know, easily accessible, because shooters are right in their wheelhouse in terms of target customers, or target.

Jeff Cohen 15:59
But why would they have had the policy against the military before the military potential

Paul Dawalibi 16:03
backlash, right? Like you like, like, you know, what do you call like brainwashing 13 year old kids, you know, like, that’s the, they can’t make a decision for themselves? It’s that kind of thinking, I guess. But their holier than thou approach I agree, never really made sense. Right? Like, because very few other games followed suit, right? I am. I’m trying to think, if any, had explicitly not allowed those things. fortnight maybe because I’m trying to think fortnight never had any liquor sponsors or anything as part of their events. And maybe they just saw the success of fortnight and said, Look, let’s be family friendly, it will reach a bigger audience as a consequence.