PEA - Hope, Concern, & Question Marks

I like the idea of PEA-- I really do. To take into consideration the organizations, the players thoughts/opinions/desires, share the success across the board, and to build and operate a league from that starting place is a great idea to me. That said, I have a lot of concerns. I know it's still early and some of them will be addressed soon. I'm trying to remain hopeful. 

When PEA announced this week, my immediate reaction was "Damn, why wouldn't we included in this?", but quickly grew into, "Wait... what is this exactly, and how will it work?". I've read through the press release, as well as the interview that Jason Katz did afterwards. None if it really made me feel better about the future of PEA. I'm going to keep the faith and remain hopeful, because again, I really do like the premise... All of that said, here are some of my concerns. 

NOTE: I recorded a video-based rant covering mostly the same content here if that's your preferred content format. 

1. The timing is awful and I don't know if they really understand why

If this league was announced the same time LAST year, it would've been a home run. But to announce it now, when we already have ESL Pro League, FACEIT's ECS, Turner's ELEAGUE (in my opinion the current gold standard of how things should be done), Starladder, Dreamhack, the Valve Minors, Major Qualifiers, and Majors.... there's A LOT of CS:GO being played right now. The problem isn't just that the players are having to deal with an abundance of events, online and offline. Well, that's part of the problem. But that was the only thing Katz mentioned in his interview-- and I think he's missing the most important consideration entirely. 

The players will play in leagues-- they may gripe and hate not having an extra day or two off, but for 10 weeks, they'll trooper on through it as they always have, especially if they like the league, the competition, the prize money, and so on. (This also assumes there won't be an overlapping league/event in which they DECLINE to participate in, which would open up a whole different can of worms that I'm not going to touch on today.)

But the FANS and VIEWERSHIP-- that's where the focus needs to be. We're already seeing a bit of a lull (decline, really) in viewership for the online matches and leagues, especially in North America. The cause of said decline I'm sure will be mostly directed towards the elimination of betting/CSGO Lounge, but should also include the general over-saturation of the space right now. It's fun to watch your favorite team play... but to watch them play 2-4 maps a night, every night for a week? 

At the end of the day, we're in the entertainment business. If you're averaging 5,000-15,000 viewers, I'd bet you'll have a hard time generating over $1,000,000 to be a profitable organization, which is the next point.

2. The organizations themselves are funding everything, making up the initial $500,000 prize pot (with at least $1,000,000 for the first year, as per their press release), and covering all operating costs. So... um.... profit?

$1,000,000 is the LOWEST number required for PEA to generate a profit in 2017 (it's actually much higher than that, but we'll keep it simple for now). How are they planning to do it? I have a few ideas how, and a few concerns to along with them. 

  • Sell the broadcast rights 
  • A huge buy-in for new organizations to join 
  • Sponsors, as per the norm (can also read this as 'advertisers')

My concerns with the first item, the sale of the broadcast rights, are multiple. First, if viewership isn't great and growing, they're going to have a hard time getting huge $$ out of the organizations that would be vying for the rights. Second, Katz, the commissioner for PEA, is (was?) also the COO for Azubu, a struggling but still semi-relevant streaming platform that most people view as inferior to Twitch, the market leader. Third, they haven't figured this out yet. I'm sure (read: hopeful) they've at least had initial conversations with the broadcast groups that could be vying for the rights, but the fact that they didn't come out of the gate with a named partner tells me they haven't gone far enough to pencil in a deal.

The next point, having a huge buy-in for additional organizations would limit the ability for organizations that are the size of Selfless, Splyce, and a handful of others that are currently competing in the Pro League from having a shot at the league. This boxing out of the competition is, I believe, in alignment with the desires of some of the folks represented in the PEA today. Maybe I'm wrong. But the point is that if part of the PEA's "revenue model" (how it generates money) is a buy-in for the teams that it did NOT include in the "organic process" Katz claimed determined the initial organizations, then I think we'll see groups get prevented from participating. Guess what that can cause? Segmentation of teams... and as a result, reduced viewership. Repeat cycle. 

Third-- sponsors. I love sponsors. We all should love sponsors, because without their products, services, and money, a lot of us wouldn't be able to do the wonderful things we get to do in the world of esports. But guess what sponsors like? Money. Market share. Market awareness. Eyes and ears-- attention. And those are things that require viewership of their targeted demo (among many other key things in the traditional marketing world, which.... don't even get met started on marketing in esports today).

Okay, enough rambling; my concern on this front is that with any kind of sizable effort like this, you almost always see the announcement INCLUDE the bigger, name sponsors right out of the gate. Look at something like the Sadokist/HenryG show "Drop the bomb"-- they announced with 4 brands. So how is it that a $1,000,000 league, that's been in talks for 6 months now, hasn't brought any names to the table? I don't know, but I'm sure hoping someone over there has the answers. Which hooks well into the next point....

3. We have no answers, and in 2016, transparency is key.

I read the Jason Katz interview, and it was a very good interview if you like reading answers that don't provide any information. How will new teams be added? Who will the broadcast partner(s) be? Who are the sponsors? How will the matches be played? Is it online? On LAN? A mix? What's the team limit, assuming more will be added? What's required of those teams to help run the league?

We don't know yet, and some of that is because they don't know yet either as per Katz's own words. But one of the videos covering the PEA announcement quoted one of their members saying they will have industry leading transparency. I'm hopeful we'll see it, but I don't think we have seen it yet. Possibly unintentionally, so keep that in mind. 

4. Who will be running things, and do they have enough time? 

We've seen how things in esports often run-- and it's not pretty. But that said, when the right people are in charge, it obviously makes a huge difference, and operating a league is no easy task. So who will actually be running the league?

It couldn't be the orgs, because they wouldn't have enough time/resources, right? Hell, TSM couldn't even spend the time to win a vote to get their CS:GO team into Pro League (which they deserved to be in, no doubt). Seems like a pretty sizable effort for something that kicks off in 3 months-- so again, that word.... HOPEFUL they're on the path here already. We know there's a commissioner, but we don't know who will manage the schedules, the servers, the AC client (are there any?), the social media, and so on. 

I'd honestly love it if they announce that they were hiring a bunch of staff to help run the league itself, because I still don't think most current players realize that even if they don't go pro, there's a lot of jobs and opportunity in esports. However, if they did that, I'd be really worried about the increased operational costs involved, which goes back up to second point. 

Closing thoughts

Unlike some of my peers, I really don't think this is that close to what WESA is/was trying to do. WESA, as per my sources, WESA is meant to be a "governing body" that gets used in the pitch to future partners and sponsors. Meaning: ESL can go to Company X and say "We're governed and regulated by a body of top organizations (WESA), which is another reason to trust us with your money."

PEA isn't that. So while there are some similarities, I don't know if they're as abundant as others have made it sound. PEA definitely came off as more positive, upbeat, and potentially awesome than WESA did (which was leaked, making it even worse). I'm just genuinely concerned that we may all be told to celebrate esports history" that may end up becoming nothing more than history before we know it. 

I'm hopeful that's not the case. Ideally, PEA would become the best, most profitable league on the planet, Selfless would be invited to participate (at a small fee, if any), and we'd all live happily ever after. Until we get some more information and answers, I'm going to remain cautiously optimistic (while still concerned), and would advise all to do the same. 

 

-Ryu