Russ: Hi I’m Russ Capper and this is The BusinessMakers Show coming to you today from Seattle, Washington where my guest is Bryce Blum, Founding Partner with ESG Law, Executive Vice President of Catalyst Sports & Media and contributing writer at ESPN. Bryce welcome to The BusinessMakers.
Bryce: Thanks for having me Russ.
Russ: You bet. So you are an esports enthusiast, expert and lawyer; would that be accurate?
Bryce: I think that’s accurate.
Russ: Okay, tell us about this law firm.
Bryce: Actually we’re pretty new; founded the firm in January. We are the first and only to my knowledge law firm exclusively dedicated to the esports industry which if I had to define it as simple as possible it’s competitive video gaming. You can think of us like sports lawyers but our clients are playing video games instead of basketball.
Russ: I’m sure there’s a lot of people watching that know about video games and know that there are some serious players, I don’t think they understand the magnitude of the sport; tell us about that and how did that happen.
Bryce: Yeah, I like to say it’s the greatest phenomenon that nobody’s ever heard of. If you haven’t directly touched this industry in some way then it would have been easy to miss the explosive growth. I can start rattling off stats so feel free to stop me whenever you want but in the last year I’ve been to sold out esports events at Madison Square Garden, the Staples Center and KeyArena a couple miles from where we are now.
And you might think okay, well you found the 40,000 people crazy enough to go to a stadium and watch other people play video games – these events have tens of millions of viewers online, they are absolutely pushing the bounds for some traditional sports in terms of magnitude of viewership. I have clients that are sponsored by Geico and Red Bull and Intel so this is big business in every way that you would imagine. If you went to an event you’re going to hear color and play-by-play commentary, there’s an analyst desk breaking it down, the esports have half time, there’s instant replay analysis, fans are going to go berserk; it’s going to feel like sports.
Russ: So these clients that have these big time sponsors, we’re talking about actual players; video game players.
Bryce: So actually I do the team side, so I work with the Sea Hawks and Knicks of the esports industry. And one of the big differences is within traditional sports you think of these brands as being tied solely to one individual sport; the Sea Hawks play football and nothing else. In esports my big team clients might compete in 5, even 10 different games. So they’ll field a roster on League of Legends, they’ll field a roster on Counter-Strike, in Dota; they might also have a Fifa player or a Madden player or a Super Smash Brothers player. So they’re really able to diversify and exist across the entire esports ecosystem in a way that a sports team does not exist across the entire sports ecosystem.
Russ: Do you have players of those games that are on those teams that play in multiple games? They’re good enough to play in 3 or 4 games?
Bryce: It’s possible but it’s about as rare as Bo Jackson or Deon Sanders and so I actually think the sports analogy works really well here. Certain sports might put more emphasis on agility over strength or hand/eye coordination right? It’s very similar for esports. So someone who’s really good at a particular game might have the skillset to play in another but generally speaking they’re playing their one game full time, they’re on a fully regimented practice and training schedule and so it’s not easy to split that attention and play at the highest level across multiple different games.
Russ: I imagine there’s lots of viewers right now wondering my God, how much do these guys make in a year? So players, what kind of earnings happens?
Bryce: They’re pushing 7 figures on their salaries for the top players in the top games in North America.
Russ: For salaries, not for competitive winnings?
Russ: Because sponsors are paying them?
Bryce: Yeah, they might be making more on their media rights deal off streaming; they might be making more on individual sponsorships. So there are definitely esports pros in the U.S. right now making 7 figure annual salaries.
Russ: My goodness. So is it also like sports is there like a LeBron James of all of those different sports or is it just sort of?
Bryce: Yeah there is and I would think of it again really similar to traditional sports where you usually have a couple of superstars that will rise to the top of the game and then sometimes, like LeBron James, they might even transcend beyond that. If you asked anyone in the U.S. to name any athlete LeBron James is going to be like the top 3 on the list. And so you have something similar to that in esports where a name could transcend an individual sport. So for example Faker is the most famous esports player in the world, he’s Korean, he plays League of Legends and even if you don’t watch League of Legends and are from the U.S. you’ve heard of Faker.
Russ: Okay. Now you mentioned Korea, and I had been exposed briefly to esports before, but there seems to be a lot of precedence, a lot of action going on that started out of Korea. Do I have that right?
Bryce: Definitely. Korea really is kind of the origin story of esports. While esports have started to gain traction in the U.S. over the last 5 – 7 years it’s been popular in Korea for 15 – 20. It’s very much part of their culture; the best League of Legends player at a Korean high school has the same kind of status symbol as the captain of the football team or the quarterback of the football team. You’re talking governmental involvement, TV stations that are fully dedicated to esports. The national sport of Korea is StarCraft. So it’s at a totally different level there but the fastest areas of growth are actually here in the West.
Russ: So we’ve got people watching right now that are blown away by what you’re saying so let’s go back to the live event setting; describe that a little more. Do people pay to come in to watch the live event?
Russ: And when they’re watching the live event they’re mainly watching a screen that you could watch if you’re online at home too, is that right?
Bryce: Yeah, it’s definitely true and I think it’s a somewhat gap between traditional sports where you might want to specifically watch the players, not just what’s going on on the jumbotron. But if you’ve been to a big sporting event, depending on your seats in the stadium – listen, Seahawks tickets are expensive, when I’m going I might be sitting in the very back and it’s not exactly easy to follow the game watching the field.
Russ: That’s true.
Bryce: And that’s true for a lot of different sports depending on where you are. We’re starting to figure out how to enhance that experience. Right now most of the poling going to an esports event is for the atmosphere, it’s the camaraderie. I know this will sound crazy but if you’re in an esports venue in a tense moment and the crowd goes bananas it’s going to feel like a traditional sports venue. And so there really is value to that, but we’re doing things like having alternative reality experiences at the stadium, we’re now having competitors sometimes play on stages that are actually the interactive map of what they’re playing in the game. So we are pushing the bounds of what it’s like to go to a live esports experience and we’re really just scratching the surface.
Russ: So I’ve watched some of the most popular games being played and it’s just amazing how good the players get, I mean we’re mainly talking about keyboard and mouse manipulation of some moving electronic images on a screen, but do they have timeouts, that sort of thing, in the games?
Bryce: Yeah, they absolutely do. It depends on the esport, some have timeouts where you’re allowed to take a tactical pause in the middle of the game and you’re allowed to regroup with your head coach. Sometimes you’re only allowed to talk to your coach in between games; like you could think of a best of 5 match like a tennis match where each game is a set. So it just depends and it varies from sport to sport but there’s absolutely that level of tactics. You’re talking about a highly trained and coordinated group of individuals that are working to execute towards a common goal and they’ll run plays or there will be strategies that will feel a lot like you’re watching a football game or a basketball game or a soccer game.
Russ: I guess practice just means playing the game but when you put it into the hands of a team you develop the strategy and you practice those plays that you have.
Bryce: Well practice means playing the game for esports juts like it means playing the game for traditional sports, right? So you’re not always playing a full scrimmage; sometimes you’re doing drills, sometimes you’re working one on one, sometimes you’re working by yourself. Sometimes you’re in a video room studying your opponents or studying your own game tape. An esports training environment is very similar. It’s highly regimented, a Tier 1 esports team has a head coach, multiple assistant coaches, analysts that are doing opposition research. And your flow will be everything from individual practice gameplay time, full scrimmages, individual one on one sessions with a coach or practicing a certain match up in a game. There’s strength and conditioning, often these teams will have sports psychologists who will work with them on mental stamina and focus, so it is a fully professional training environment.
Russ: Wow. So Founding Partner of ESG Law, are there other law firms that are focused now on esports?
Bryce: There’s starting to be other lawyers that are thinking about esports that are doing work in the industry. As far as I know I’m the only lawyer out there that this is the only legal work that I do is in the esports space. I was the first-to-market attorney, I’ve been doing it about 4 years and so I just have a lot more experience and reps on the transactions. So if you’re an esports team and you’re trying to figure out who to hire I’m oftentimes your first phone call. But I think as the industry expands there certainly already is more space for more than one lawyer, there already is more than one lawyer – entertainment lawyers, sports lawyers – that are kind of dabbling; maybe they’ll have an esports client or a big esports project. I think that will just grow with the industry over time.
Russ: Well speaking of expansion, I’ve even heard that there are regular professional sports teams that are investing in esports today, even our own Houston Rockets right?
Bryce: Yeah, the Houston Rockets actually hired a Director of Esports, first NBA team to have a full time esports employee on staff. He’s a buddy of mine, his name is Sebastian Park. And look, that’s just the tip of the iceberg. I’ve worked on – both on the legal side and on the consulting side – with a variety of traditional sports folks. I represented the Philadelphia 76ers when they acquired 2 esports teams, Dignitas and Apex.
I represent Team Liquid that took on investment recently from Peter Guber, the owner of the Warriors and Dodgers and Ted Leonsis, the owner of the Capitals and Wizards. I represent NRG which has investment from the minority-owned Sacramento Kings. I represent Immortals which has investment from Steve Kaplan, the owner of the Memphis Grizzlies. I could go on and on there are so many traditional sports folks, both on the team side and just the individual owners, who really see esports on the future and they want to make this bet because they want that early mover advantage.
Russ: What do they hope that it will accomplish to have their name associated with an esports team because they’re not playing the same sport?
Bryce: I think there’s two hopes; hope one is they can create a younger audience and engagement around whatever your traditional sports property is. That’s more of a problem for baseball than it is for basketball, the median age of a baseball fan in the U.S is 53, so they need to get younger and video games are a pretty good way to do that. And the other thing is you’re buying a lottery ticket against the future growth of the esports industry; at some point someone spent $100 million on an NBA franchise and everyone thought that person was crazy and now the worst NBA franchise is worth $1 billion. So if you can invest in an esports team in 2017 at a $30 – $50 million valuation, who knows where all this goes but if you get the right investment in the right place you could easily 100 X that investment.
Russ: My goodness, well I have to ask you this before I let you go Bryce, you must have been a gamer yourself; maybe you still are?
Bryce: Still am, ironically less so because I work about 100 hours a week and so finding time to play video games isn’t easy. I watch more video games than I play probably but it’s such a different question for my generation then it was even 10 years older than me. I grew up where I would go and I would play pick up the ball with my friends and then we’d go home and we’d play Call of Duty or Halo when it was too dark to play football out. And that’s really true of everyone my age and younger; it’s just part of culture in a way that it wasn’t for kids 5 years older than me, 10 years older than me.
Russ: Did your parents ever say Bryce, get off the computer?
Bryce: All the time. Although you know what’s funny is I grew up in a household where my mom felt that video games rotted my brain and so very, very rigid structure around how many hours I was allowed to play. We weren’t allowed to own a station so if I really wanted to get good gaming time in I’d go to a buddy’s place. And not only are video games more popular, there’s also a growing body of research that shows my mom lied to me when I was a kid.
Not all video games are good for you – I’m not going to sit there and say go play 5 hours of Grand Theft Auto – but the core esports games – League of Legends, Counter-Strike, Dota II – these games are incredible complex and tactical and the research shows it improves creative problem solving. Gamers when they fail they’ve been conditioned to try, try again in order to succeed. It improves team cohesion, they get better in math and they also get better in writing and reading. I mean it’s actually crazy some of the advancements in science as it relates to the benefits of gaming these days. Again, not saying that kids should be playing games for 12 hours a day and not all video games are created equal, but the right game and the right amount of time, hugely beneficial.
Russ: And I assume your mom knows that you’re doing what you’re do?
Bryce: Yeah she does. I don’t think she can fully wrap her head around it but she knows what I’m doing and she’s proud of me, which is all that matters.
Russ: Okay, so what you’ve got with ESG Law is you’ve sort of got a startup law firm; have there been challenges getting that off the ground or has it been smooth sailing?
Bryce: So ESG has only been around for a few months and you have all the typical challenges of founding a business; you have to set up the complex structure, the banking, etcetera. I would say more generally though in terms of creating this practice it hasn’t always been easy. When it comes to esports we’re literally building the plane while we’re in the air and so that includes the legal side of it. We’re talking about when I first started operating in the industry there were no written player contracts. League rules were something that some non-lawyer slapped together and put on one page. And so the ecosystem has really evolved over time and there’s a lot of challenges being a legal operator within that system, though the nice thing is that I’ve had the opportunity to help build it.
Russ: So take us back to the beginning. I know that everybody that I know that has started a business they knew exactly when they made that decision, yeah I’m going to do this; what triggered the idea for you?
Bryce: I remember that exact moment too. So I started practicing law at Foster Pepper which is the third largest law firm in Seattle. Big corporate firm, I’m excited, I’m a junior attorney and a commercial litigator so nothing to do with esports whatsoever. And when I started at that firm they encouraged us to go around, interact with more senior attorneys, attend meetings, kind of get a feel for what’s going on at the firm; go get a sense that you’re there and they’ll start assigning you work. Well literally that first week on the job I went to a meeting of the Media, Entertainment and Games group and they solicited writing, particularly about video games and the law because video games were such a rapidly emerging industry in Seattle.
I wrote something specific to esports, that article went viral within the industry and the rest was history. In the immediate aftermath of that I had major teams and players contacting me, asking me to do their legal work and I did the first project and it was like this is so much better than what I thought I was going to do with my life, I want to be doing this. I like to say I fell into it and then I ran with it. From that moment on it was a very intentional strategy of how do we market in the esports space, how do I develop the knowledge base to really do this work and serve these clients well and the rest is history.
Russ: Well Bryce I really appreciate you sharing your story with us today, it’s a fascinating category for sure.
Bryce: Thanks for having me.
Russ: You bet. And that wraps my discussion with Bryce Blum, an esports specialist and Founding Partner with ESG Law. And this is The BusinessMakers Show.
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