So something one question that I've gotten asked a lot in the last week or so is, "Is there a bubble in esports?"
And I was kind of, I was expecting that you might ask that but my answers were just so good and comprehensive that we didn't get around to covering it I guess. That's called filibustering, by the way. And here's what I just want to say about that.
Number one to the market, to the community - don't worry about it. It's someone else's problem. So, who cares? I think to the extent that you care it should be because, look at the folks that are coming in and investing in the space.
These aren't people that are just throwing around cash for any business that just puts its hand up and says hey we're growing. Invest in me. These are really sophisticated people, investors, institutional investors that have had success in all sorts of industries over a really, really long period of time, including traditional sports and entertainment. They know of what they speak and it's not like one or two of these folks are coming into the space. It is a deluge of interest and the teams I don't think can even keep up. There's not enough teams that are investable for all the interest that there is in investing. So that's one thing I'd suggest. Or I'd offer. Number one.
Number two - when I think about traditional sports, there are two things, in my opinion anyway, that have driven the appreciation of traditional sports valuation really more than anything else over the last generation.
One is scarcity.
So the fact that if I want to own an NFL team, there's thirty two of them and I have one way to get it and that's to go buy one from somebody who owns one now, which creates a real seller's market, not a buyer's market. The other thing is -- so right. The other thing is in esports there's been no supply constraint until now. So first of all there's Overwatch League which is kind of a very restrictive franchise model. There's only one way in, two ways in I guess.
One is Blizzard expands and two is you buy a team from an existing owner. So that plus the fact that esports are becoming so competitive and professionalized that the days of, "I used to play. I've got an insight. I want to start a team and I'm going to compete in LCS or I'm going to compete in Overwatch." Those days have probably come and gone in some games and will probably be gone soon in others. Now there's always going to be a next game, a next whatever. And so that will never go away entirely. But I think it's changed a lot. So the supply opportunity is being really restricted. So one of the two big things that drove traditional sports valuation has never existed in esports before ever. Now it's starting to exist. To me that suggests that's an accelerant evaluation not a depressor.
The second thing is media rights.
So the NFL, for example, is a media rights behemoth, from national media deals, right? Fox, CBS, ESPN. Baseball is a media rights behemoth from local media. RSNs. Teams are getting all of this massive amount of 100% essentially margin dollar contractually guaranteed for a long period of time from Fox or Comcast or Route or or some other RSN or would-be RSN. A lot of baseball teams actually are equity partners in their local RSN, and those RSNs sprung up to support the baseball content because of the tonnage and because of the season and all sorts of other things.
Esports, at least on the team side, has not really enjoyed media rights outside of kind of single year content licensing deals. So, again, one of the two things that have probably driven an appreciation in sports valuation over the last kind of generation, never before in e-sports, now we're starting to see that might be changing. So I think that also offers real upside. And if you add to that kind of professionalization of management, acceptance from kind of the media generally, global distribution in scale, I really think that the opportunities for kind of enterprise value appreciation in esports are all ahead of us for the teams that manage themselves properly and correctly.
That was definitely one thing I wanted to make sure I got on the table.