[hkes_show_google_ad] Investment from traditional sports — whether from owners or sports organizations themselves — was one of the major esports storylines of 2016. That investment has since become ubiquitous. Following the waning months of 2015, the conversation about esports and its coveted viewer demographic has found eager voices in NBA front offices and meetings with league commissioner Adam Silver himself. Meanwhile, European soccer clubs have taken steps to find their own approach, many starting small with FIFA players or tournaments. NRG Esports was among the first major esports organizations formed by sports money. Co-founders Andy Miller and Mark Mastrov — both co-owners of the Sacramento Kings — revealed the organization in November 2015 as they purchased Team Coast’s spot in the North American League Championship Series. As they made the decision to plunge into esports, Miller told theScore esports, they initially looked at it through a traditional sports lens. “When we looked at the season ticket base — the average age of the traditional sports fan, it’s double the age of an esports fan. So it was exciting to reach a different audience,” he said. “And we both have kids, and we see what our kids are doing, watching and playing … and it’s a lot more of this than it is traditional sports.” That preliminary view of the situation may have given the team insight as to the new potential audience they could reach — a strategy that would, later in 2016, become a mantra for new sports entrants to the field. But it couldn’t necessarily provide the organization with a clear path forward in League of Legends. Despite having the LCS spot, these were still early days for NRG. The team sought out people who might be able to help navigate the LoL maze, even as they tried to determine for themselves what success in the game would look like. “But the definition of success for us wasn’t necessarily ‘Hey, we want to go in and win the League of Legends World Championship.’ We wanted to build a brand, and that’s always sort of been our definition here.” Miller is clear on this point: while winning is always the goal, it can’t be one that is all-consuming for the organization. And he’s pretty sure that anyone says otherwise isn’t being honest. “If anyone says ‘hey, all we’re trying to do is just get the best team, we want to win,’ I think they’re just bullshitting to some extent. There’s plenty of really cool teams that nobody cares about, and in the long run it’s not a great business model … The reality is, we want people to care.

Shaq to the future7

Viewed through the sports lens, the transient nature of esports fandom is a unique problem. Fans in Sacramento support Sacramento’s team, Miller says, but that kind of local support doesn’t yet extend to esports teams. The goal, then, is to make fans — regardless of their preferred game — care about NRG as an organization, even if their favorite player moves on. Though NRG brought in NBA Hall of Fame centre Shaquille O’Neal as an investor in early 2016, he also eventually became one of the organization’s biggest promoters. Shaq’s enthusiasm — Miller calls him “the world’s biggest kid” — was something that the organization took to heart in their own approach to cultivating a following. And while it’s easy for observers to be cynical about any kind of promotion, Miller insists that Shaq’s interest in NRG, as well as his well-known irreverent persona, are absolutely genuine. “He loves NRG, he loves it. He loves gaming, loves video games,” he said. “He’s exactly what you see. He’s a fun-loving, one-speed, hilarious machine of energy. And he’s super into it.” As an example, Miller recalls a recent conversation with Shaq, where he expressed his excitement about a unique opportunity. “He called me the other day and said, ‘Guess where I’m going? I’m going to China to open the first Taco Bell!’ Hilariously, beyond joyful that he was doing that. It’s amazing.”

NRG President Brett Lautenbach explained that much of Shaq’s ebullience has been consciously adapted by the organization in how they approach social media. “You look at Shaq, and I would hope you see a bit of Shaq in NRG, in everything we do. You look at him: he’s a top-tier competitor, but also this goofball who has a good time, and is always willing to joke with people and not be the most serious person in the room. I think that’s kind of something we’ve really taken to heart with how we present NRG to our fans, and to potential partners in the space.” Since he started his involvement with NRG, Shaq has been involved in a number of high-profile events for the organization including the acquisition of their Overwatch team, and a gaming event at the White House. Miller says Shaq does these things because he really wants to. “It’s an active choice, absolutely … He is a great ambassador for the team,” Miller said. “Because he only does stuff that he loves, and he’s into.”

League of Lessons

As it turned out, long-term success in League of Legends was not in the cards for NRG. After a mediocre fifth-place finish in the 2016 spring split, the team lost jungler Galen “Moon” Holgate, top laner Jung “Impact” Eon-yeong and AD carry Johnny “Altec” Ru. The team’s summer effort resulted in a ninth-place finish and, ultimately, relegation. That moment was pivotal for NRG in many ways, Miller said. Not only did it force NRG to look at their progress to-date, it also made them consider what sort of future they wanted in League of Legends. “It was probably both our worst and best moment, to be honest. We were new, it was an eye-opener for us, and we blew it,” Miller said. “We really never thought we’d be relegated, even when we were in the tournament, but the guys just couldn’t put it together at the end. We had nothing for some reason. And it was like, wow, we really need to think about this.” After being relegated to the Challenger Series, the team eventually decided to sell the spot. Miller called the discussion preceding the decision “pretty straightforward.” Running an LoL team was expensive. It required infrastructure and experience that NRG wasn’t yet able to leverage — particularly, as in their case, if the team’s roster hadn’t already built cohesion before being assembled. Miller doesn’t pull punches when discussing how unprepared for the world of LoL the team was. He says that the team’s coaching and overall philosophy weren’t enough to help guarantee success. And despite having a number of strong names on the roster, especially in the spring split, the communication with the team’s Korean players was poor and it had a greater impact on performance than anticipated. Even outside the team dynamics itself, NRG felt like it was playing catch-up, trying to figure out what the team needed to do to remain competitive in the tight NA LCS schedule. “And it was a lot, a big learning experience, a lot of money and a lot of time. A tremendous amount of time,” Miller said. “Being the new kid on the block, it was hard. It was hard to try to compete with the TSMs and the Cloud9s and Liquids and all those guys, who had the formula down fast. No doubt, if we had time, we could have competed very well. But there was no time in League. You have to compete or you’re out, right away.” The organization ultimately decided to focus on other esports. They had a Counter-Strike: Global Offensive roster, and had signed a high-profile Overwatch roster that included Brandon “Seagull” Larned days before being relegated. “So we said, it probably makes sense for us to step back from going after it again with the Challenger spot. And let’s take a look at these other games that are important to us like Overwatch,” Miller explains. “And when we sort of lifted our heads out of the hyper-competitive nature of League, I think that’s when we really started to flourish as a team.” Miller isn’t counting out a future return to League of Legends, but said he doesn’t think the 2017 Summer Split is an option for NRG. The team is closely watching developments with the Overwatch League “and how that affects our ability to do other things.” Miller said that things could change in League and “we need to see how that plays out, and if they’re welcoming us and there’s an opening there for us to get back in.”

Snack-mix strategy

While they are now absent from League of Legends, NRG has focused their attention elsewhere. “We decided that we’d love to get back into League some day, but we wanted to focus on our other games that we play, and on our streamers,” Miller says. “To just try to build an org that stood for something, that people could have a connection with.” Their Overwatch team, though in the midst of a rebuild, added superstar DPS player André “iddqd” Dahlström earlier this month, and the organization has even received overtures from both mayors and traditional sports teams to bring the org to their cities for a potential Overwatch League bid. They signed a Rocket League team that won an NA championship, and a SMITE team that are two-time world champions. They added Super Smash Bros. for Wii U player Nairoby “Nairo” Quezada. In essence, they put the time they had been spending on LoL into other esports avenues. Miller points to revenue as one of NRG’s strengths, which he partially credits to their ability to find and engage sponsors. The sponsors, in turn, value NRG’s ability to engage with their audience: both on social media and through the organization’s streamers. “I don’t think you can compare us — and this is a business answer — to any of the newer teams, and a lot of the older teams, from a revenue perspective … If you look at our engagement … our numbers are pretty good for social across the board, for a team that’s a little over a year old. But the engagement is incredible, the amount of time people interact with our brand,” Miller says. “And brands see that, and they want to be a part of it. So I think that from a business standpoint, it’s been great. It’s been a good year.” [hkes_show_google_ad]