NHL announces eSport tournament. What does it mean for the league?

A participant plays the Activision Blizzard Inc.'s Call of Duty game during the Tokaigi Game Party Japan esports competition at the Makuhari Messe convention center in Chiba, Japan, on Saturday, Feb. 10, 2018. Hundreds of players are facing off in the two-day competition for more than $300,000 in prizes and the top few dozen players will get licenses to play in paid video-game competitions in the future. Photographer: Shiho Fukada/Bloomberg via Getty Images
A participant plays the Activision Blizzard Inc.'s Call of Duty game during the Tokaigi Game Party Japan esports competition at the Makuhari Messe convention center in Chiba, Japan, on Saturday, Feb. 10, 2018. Hundreds of players are facing off in the two-day competition for more than $300,000 in prizes and the top few dozen players will get licenses to play in paid video-game competitions in the future. Photographer: Shiho Fukada/Bloomberg via Getty Images /
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The NHL announces the “2018 NHL Gaming World Championship.” What does this investment in eSports mean to the success of the league?

The NHL is beginning to explore the world of eSports. The investment is coming at the right time for the league as it looks to increase revenue to catch up to other main sports in the United States. The “2018 NHL Gaming World Championship” is the first example of eSports investment. Other sports around the world have joined this platform; EA Sports titles FIFA and Madden have been heavily involved in eSports. The NHL will be hoping to reach a new demographic of fans as well as make itself more attractive to sponsors, including an upcoming television contract.

Soccer teams from around the world have fully embraced the eSports revolution. Big clubs like Paris Saint-Germain and Manchester City have invested heavily in their FIFA eSports teams. MLS is also taking note and as announced it will be forming an “eMLS Cup” as teams begin signing professional gamers.

The NHL is not at this point yet in its eSports development, but it’s a great target to aim for. Announcing the tournament is a great first step, but the league needs to aim higher for the future. Allowing for teams to sign and build their own teams opens up so many revenue options for the league. Investors could now pay and sponsor specific teams, players and events. As the events grow in popularity the TV ratings will climb. This means even more sponsorship revenue.

The NHL has three years to get its eSports platform built correctly so it will be used as a bargaining tool during the next TV contract bidding. The current deal with NBC will expire after the 2020-2021 season.

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Disney, the parent company of ABC and ESPN, is taking the steps to become favorites in the new TV contract. Recently Disney purchased a group of regional sports networks from FOX. In total there were 12 NHL teams affected by this change. ESPN was also the winning bidder for the 2016 World Cup of Hockey. They even showed coverage of the NHL trade deadline this season. ESPN has invested heavily in eSports in the past. If the NHL can successfully add it to its portfolio, it will be even more attractive to ESPN.