Businessman and investor, Mark Cuban claimed that owning an Esports team in the US is an awful business in a sports talkshow called Fair Game, hosted by Kristine Leahy. The self-made billionaire is a mainstay on business reality TV show, Shark Tank and is known for his investing in the tech and sports spaces. He is also the owner of an NBA team, the Dallas Mavericks.
In response to a question about why Mark would not buy a League of Legends team Mark Cuban went onto to explain that player overload was one of the key reasons why he wouldn’t invest into the space. He clarified that the changing metas of games like League of Legends, Fortnite and Overwatch put a lot of pressures onto players which made it a brutal business. He also said that the other main reason is that the economics of owning a team, not just in esports, but in sports, is made out to be much better than it actually is.
Cuban’s stance was that a lot of people who have bought into teams have realized that it is an awful business. He said that this is the reason we are seeing a lot of consolidation and teams trying to raise more money, with valuations coming down as well. Among other things Cuban also mentioned that overvaluation is a concern in the with things like the Overwatch league unable to hit the numbers which match the price tags it set when they launched.
Cuban claims that models like the Overwatch League have been unable to hit the numbers it should to justify it's valuation | Image via Blizzard
Cuban concludes by saying that there isn’t a lot of money to be made currently in the US, but markets in Asia, Korea and China are significantly more lucrative in the current scenario. Cuban’s understanding of esports and its nuances was praised by industry experts with many lauding his act of calling out bad business practices which will be bad for the industry in the long run. Mark Cuban is certainly an influential figure in the business, investment and tech circles and it seems as if he has done his due diligence when it comes to esports. His statements could have long-lasting impacts on the esports scene across the world and although it isn’t the most positive news, it could lead to major overhauls and restructures which actually might eventually benefit all industry stakeholders and help create a more stable base.