City-based teams are on the rise in esports as leagues such as the Overwatch League and the NBA 2K League utilize this style of organization to create unique brands. This different approach allows for the leagues to tackle many problems that other esports struggle with, however there are some drawbacks.
The biggest strength is the ability to draw in non esports fans into the league and have an immediate connection. It is much easier for someone from Dallas not involved with the games to connect with Dallas Fuel or Mavs Gaming than Counter Logic Gaming. Additionally, Overwatch and NBA 2K players receive an identity to connect with.
Licensing is also a major benefit in the Overwatch League. Since Overwatch teams are exclusive, for example the Houston Outlaws only exist within it, Blizzard can enter into more profitable and long-term exclusive licensing deals. And the intellectual property of the teams permits Blizzard with more ability to enforce these brands.
In regards to NBA 2K, by sticking with the city-based NBA teams these new organizations have a parent group to help with infrastructure and resources. Also, existing sponsorships for NBA teams can be leveraged by 2K teams for early funding.
While sponsorships with NBA teams can help 2K teams, the Overwatch League is hurt by this city-based league in regards of sponsors. The new Overwatch teams are under exclusive sponsors, which could create conflict with sponsors of the teams. The reason for this is because many teams have esport organizations running them, for instance London Spitfire is a rebranded Cloud9. Cloud9 has its own sponsors versus the London Spitfire sponsors and this can create issues with deals.
The NBA 2K League teams do gain benefits from being under their NBA counterparts, but at the same time this can cause issues. Teams are hosted in their city, but they do not host games there. All the games are played in a studio in New York, meaning players have to make multiple trips a week in order to compete, which is costly. And this system hurts teams ability to grow fanbases in their cities without games being played in their cities for locals to attend.
This is the same for the Overwatch League, but these teams do not host their players in the cities. Instead they all stay in Los Angeles to compete there.
Overall, the pros outweigh the cons. Teams are able to create an identity and fanbase easier than other esport teams, while also providing the league with exclusive licensing rights. The latter part is very important for sponsors as it can help make investments more secure.
And while there can be some issues with old sponsorships and game locations, these leagues are still very young and plan on expanding to do even greater things in the future.
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