PwC’s Sports Business Advisory practice sat down with Xavier Campbell, CEO Essendon Football Club, to discuss the AFL team's move into the world of esports.
Essendon were one of the first Australian sports organisations to invest in esports, what motivated this decision?
Esports was identified as a unique opportunity to be an early adopter in an emerging market with significant growth potential. It presented a different opportunity to engage and connect with a new generation of fans on a platform that is relevant to the millennial audience. The global audience growth, participation levels and engagement rates demonstrated esports was fast becoming mainstream. Further to this, the commercial model is immature and practically a blank canvas presenting an opportunity to bring our resources and expertise to maximise revenue opportunities.
What have been the challenges with integrating esports into a traditional sports organisation?
The biggest challenge is a lack of understanding about esports and overcoming the scepticism from traditional mainstream audiences to accept esports as a sport. The role of a traditional sports club is to help educate the audience and bring them on the journey. Mainstream sports fans find it difficult to appreciate the skill level, professionalism and hard work and dedication required to be successful in esports. Different mediums, communications and tone have all been important in showing we are genuine about our investment in esports and our desire to see both our team and the industry succeed.
Further to this is the perception that esports is ‘taking something away’ from your traditional business (and this is particularly prevalent if your traditional business is not performing to the level you might like). I find that it is quite the opposite. It is complimentary, provides an opportunity to attract new fans and drive new commercial opportunities.
What does having an esports team add to Essendon?
It certainly adds a new and exciting way to talk to the millennial audience, a demographic that is notoriously hard to access for traditional sporting organisations, and indeed many other organisations. In time it will add a new revenue stream, capable of commercial independence and ideally with strong capital growth. It is also an area to grow existing staff skills and experience, already we have had staff working on esports who would traditionally have no exposure to such an industry and its inner workings. And finally, it provides an opportunity to innovate and disrupt without the guidelines and boundaries of traditional sports codes.
How can traditional sport add value to esports organisations/industry?
Bringing a greater level of professionalism, particularly in the commercial operations and player welfare spaces, will no doubt see benefits to our team and the industry. We have already experienced strong media attention over our short esports journey. The level of coverage in traditional media we have been able to garner not only for our team, but also for esports more broadly. Hybrid fans, those willing to cross over from football and explore the world of esports, will also bring value.
How do you see esports growing as an industry?
In a word, exponentially. As a general rule, we sit approximately five years behind the U.S. in terms of growth trajectory for esports, putting us on a course for significant growth over the next few years. This will be growth not only in viewership and participation, but also in revenue and commercial maturity. There will no doubt be those that get left behind, but those who are able to adapt and innovate will get an opportunity to really shape the esports industry in Australia and beyond.
How will traditional sports and e-sports co-exist in the future?
While the industry is obviously evolving very quickly, esports in Australia will not be rivalling the AFL in viewership, attendance or revenue in the short to medium term. Consumption of traditional sports will continue in parallel with the growth of esports, and, at least at this stage, we don’t see them as competing products. As such, they are likely to comfortably coexist for now. However, esports presents a challenge (and potentially an opportunity) to traditional sports moving forward because of how easily it is consumed as a product. At present, every esport in the world is completely free to watch, anywhere, anytime. In the longer term, however, this will change and is likely to lead to some degree of friction, as eventually esports will potentially be competing for similar revenues as traditional sport. When you consider that esports is what every traditional sport is trying to become - young, global, digital and increasingly diverse – it is going to be a fascinating journey over the next few years.
Thank you Xavier for taking the time to share your thoughts on esports and we wish Essendon Football Club all the best for the 2019 season.