Team Liquid co-CEO Steve ‘Liquid112’ Arhancet believes that sales of esports organizations are set to become a regular occurrence as non-endemic investors look to exit the scene despite being eager to jump in initially.
Arhancet joined Richard Lewis on the fourth episode of the Dexerto Talk Show’s second season on February 24, breaking down, amongst plenty of other topics, the reasons behind having to raise capital for Team Liquid.
In talking about ownership in esports, the pair touched on the rumors surrounding a sale of OpTic Gaming by Infinite Esports. The Team Liquid co-CEO used that example to explain to Lewis the reasons why he believes sales of stakes in organizations will become more commonplace in the near future.
Arnhancet said: “When I met Peter Guber, I asked him why do you want to invest in Team Liquid and he said ‘I’m winning in basketball and in baseball, and I want to win in esports too’ – I said you get it! So, that’s at least the long-term partnership and relationship. That alignment is critical. I think that’s why you’re seeing so many other esports teams start to fail.
“I think you’re going to see more of that [people selling their stakes],” added the Team Liquid CEO. “You’re going to see investors put capital in to invest into brand equity and winning and the monetization wasn’t there – maybe they didn’t sell sponsorships, maybe they didn’t do a media licensing deal and maybe they weren’t able to offset their investment.”
(Timestamp for mobile viewers of below video – 8:13)
He continued with his reasoning, stating: “I also think that esports is a very top-heavy business in terms of the handful of top brands garner most of the monetization within the industry in comparison to other teams.
“Like, it’s very hard for a low-tier team to get a lot of investment and go out and close a sponsorship deal that Team Liquid is – in terms of size that Team Liquid is able to close. So, I think that there is going to be other instances [of sales] while that happens.”
While any sale of OpTic Gaming would represent a massive change in the esports landscape, the organization remains under the Infinite Esports umbrella for the time being and rumors of a sale are currently unconfirmed.
Richard Lewis and Arhancet went on to discuss the success of Team Liquid in 2018 and 2019, the ins and outs of sponsorship in esports, dealing with controversies and much more.
You can catch every episode of the Dexerto Talk Show with Richard Lewis on the Dexerto YouTube channel, iTunes or Soundcloud every Sunday.