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This 26-year-old CEO is helping esports grow up

Evil Geniuses CEO Nicole LaPointe Jameson on reinventing the industry

For a long time, people have predicted that playing video games competitively would become a big business, rivaling traditional sports leagues like the NBA or NFL. But it’s been a long process, with challenges and setbacks along the way. There’s an audience — lots of people tune in to watch teams play games like League of Legends or Dota 2 — but the business models and ecosystem around the industry haven’t had a ton of success.

For this week’s episode of Decoder, I spoke with Nicole LaPointe Jameson, CEO of esports company Evil Geniuses, to figure out how an esports team makes money, where the industry is headed, and where she sees growth.

This transcript has been lightly edited for clarity.

Okay. Here we go. Nicole LaPointe Jameson. You’re the CEO of Evil Geniuses. Welcome to Decoder.

Thank you for having me. Glad to be here.

So what is Evil Geniuses?

Evil Geniuses is one of North America’s oldest esports organizations. We are an esports

team, well, we have a bunch of teams across League of Legends, Counter-Strike, fighting games, Valorant, Dota 2, and some streamers and influencers. We all compete under one banner. And we lean into the Evil Genius side of our brand identity. We like being punchy, bold, and authentic voices, and create a lot of content and programs beyond just our athletics, like collegiate and education programs, data and analytics programs, and spicy engaging content to excite and inspire our people.

So you are the CEO of an esports company, you’re a new CEO, right? You’ve only been there a couple of years. Before that, you worked at PEAK6, which is an investment company. Explain how you became the CEO of Evil Geniuses? Give me a sense of that journey.

It’s a fair question to ask because it’s a little nonlinear. I had worked for the past five years at an investment firm called PEAK6 Investments, which does a lot of — I call it a mixture of private equity meets family office. And they have an investment portfolio that’s low-touch but then, they have a full-on operational acquisition investment portfolio as well. And I lived in that side of the house, looking at a variety of businesses for them, ranging from the dating industry to flood insurance to haptic technology. And at the time that EG [Evil Geniuses] and gaming came on our plate, I was looking from an investment point of view at technology, AR, VR, and gaming companies, looked at a lot of esports teams. I don’t think it’s a badly kept secret that a lot of them don’t look great on paper from an investment point of view, and EG was a diamond in the rough. So I had focused in particular with distressed-asset businesses that were ripe for technology disruption for turnaround. And EG was this tiny, 10-person company in Seattle, Washington, that had a 21-year legacy brand of competing excellently in all different titles.

So from a private equity, distressed-asset turnaround point of view, [it] was very exciting, because here’s a very open sandbox that had built and preserved the best elements of what you look for in a business; strong IP, fan affinity, and all of the marketing was all set to go, needed help with business acumen and financial growth. So I was very excited for a board seat. Joke’s on me, I was told about two weeks before the investment closed, converting to more of an acquisition, I should be rolling in to help kind of spearhead the business and really figure out the space of esports, as it had not been well figured out, especially when I had entered two years ago.

And so here I am, still here, stuck, I think, but it’s been fantastic because coming from, I hate to use “the business realm,” but entering into esports, which is very much an entertainment and passion platform, in terms of the overall industry when we had entered, was a really good melding of worlds. And I’d always loved gaming, I’ve always been a personal fan of the space. So if you had told my 10-year-old self, “Hey, you’re going to work in gaming later,” I wouldn’t have believed you, but very, very happy to have landed where I did.

So, we mostly hear the negative side of PE [private equity] firms and what they do to distressed companies, right? It doesn’t seem like the game here is, we’re going to break this thing into parts, extract value, over-leverage it. There’s a negative PE story that we hear all the time.

That is fair: not this one.

This is very much an investment story. And you were installed as the CEO to grow the brand. What was the current business of Evil Geniuses in esports? And what do you think that business should look like?

So bear with me if you’re an esports expert, but taking a step back. The esports industry’s a bit of a misnomer in that it really encompasses two bimodal — often intersecting, but frequently not — business models. One of them is traditional sports, except think of us like a university athletics department. I’m the University of Michigan. But instead of basketball, football, soccer under one brand, I have Dota, League of Legends, and Counter-Strike.

There’s that business model, which has the same models you would see in traditional sports: sponsorship, IP and media rights, direct advertising, etc. But esports, being a digital platform, also bridges entertainment, so you think of content creators, digital influencers, and all of those revenue models and revenue streams. That also exists in esports. So we’re a bit of a blended form of both of those. When I had entered EG, we were just the former. We were just the athletics model, which is great. That’s the thesis we believe in. It’s why we’re here, to be competitive, but it wasn’t profitable.

You can’t operate player salaries that look akin to pro athlete salaries. [They] are not sustained on esports-level sponsorships today. So we really focused on bringing peripheral revenue streams into the business to support what we do but that also don’t deprecate from the core product of who we are. And how that’s manifested is, of course, the entertainment side of [the] house.

We’ve also developed deep collegiate and education platforms — how to bridge the world of gaming, how to make gaming accessible to different audiences — as well as data analytics and even fantasy embedding products. So we’ve been able to pull in things using our core athletics platforms to really help self-sustain the business in the past two years to keep the esports product alive but keep the lights on at the same time.

One of the questions I have for all of these digital media and entertainment models — and obviously, I work in digital media so I think about this a lot — but one of the questions that always comes up is it seems like so rarely is the core product itself the money. It’s the universe of things around it that hopefully add up to enough money to keep the core product alive. That is very different than a traditional sports league, right? Owning the Lakers is just a lucrative proposition because the Lakers play basketball, and people buy tickets, and you’ll sell the rights, and you can just do it that way.

Exactly.

Here, and almost everywhere in digital, it seems like the core thing rarely makes the money itself. It is almost a loss-leader. Is that how you think of your model?

I wish I had a better and more shiny answer for you, but it definitely resonates. You know, we believe in the team. The team is the crown jewel. We wouldn’t have a value proposition to exist without the athletic side. But it’s not supported by the magnitude of the revenue with league revenue share like you’d find in traditional sports today. I wouldn’t be here if I didn’t believe that won’t change over time. But today, I would be a bad fiduciary to my investors if I said, “Yeah, let’s just go athletics. That will work.” Because it won’t, unfortunately.

But also on the bright side: unlike traditional sports, the beauty of esports — you saw it during COVID: pro sports leagues stopped. Entertainment and the sports space stopped. They weren’t sure what to do, and we could keep going.

We have a very sticky product by being digital and by being more flexible and how we engage, excite, and monetize the fan and consumer. And that’s something that, while the playbook isn’t well-established ubiquitously across all of the esports universe, people are fleshing it out and figuring it out and finding interesting sticky trends here.

So it’s very much an industry in formation still.

How do you think about your relationship to the game publishers? I was reading an essay by a VC named Matthew Ball. And he has this line in there, which I think is very funny — I don’t know if it’s true. I just think it’s very funny — that right now, the relationship between esports teams and the publishers is like if Spalding, the company that makes baseballs, owned the leagues, and eventually Spalding would just announce, “Well, now every game requires three baseballs in play at the same time.” Right? There’s an obvious drive for them to make money in that way. They control the games, they can change the rules, they can change how the games work. That seems like a relationship that needs to be managed very closely. How do you think about building a business with a power imbalance at that scale?

That is probably the biggest either plus to the space, or thorn in my side, depending on the day and which developer. The relationships vary from, we’re deep in the weeds of how does the competitive structure look … and we collaborate very tactically together, to me getting kicked out of boardrooms being called a rent seeker — like, they’re far and few in between with relations.

Wow.

Because you’re right, they hold a lot of power. And here’s some good examples, right? EG used to be the best team in the world for Halo. Halo is not a game that is supported anymore competitively. So unlike basketball, which won’t go away, esports titles can go away. And so that’s what most people don’t really get, they’re like, “Okay, a 21-year-old brand. Why is that interesting?” Well, that means whoever in all my predecessors were able to navigate a very IP and tech platform changing ecosystem for 21 years of our existence, that’s a hard skill. Especially, because entering an esports title is not cheap, both from labor, from straight dollars, from infrastructure. Knowing what titles are sticky, what developers have good relations. It’s almost a due diligence process in itself to know what developers are supporting the league in a way that helps brands grow. I think a very interesting today case study is Fortnite, right? Everyone and their mother knows about Fortnite. But why are esports teams pulling away from Fortnite? As Epic changes the competitive platform so frequently, it’s hard for us to be proactive.

And those feedback loops are important because at some point, if developers really care about the team side in the esports ecosystem, they have to be more collaborative. But again, similar to the whole space, it’s developing, it’s far and few in between, and a huge component of what esports teams make it or break it in the space is how they navigate the developers.

I ask every CEO who comes on the show, for their decision-making framework, and I’ve kind of waited a bit to ask you because I wanted to give people a sense of how novel the decisions you make are. There are parts of decisions you make that seem very much related to what any entertainment or sports CEO would make. There are parts that feel like what a tech CEO would have to do. And there are parts that are just totally new. So given all of that, what is your decision-making framework, and how has it evolved over the two years you’ve been at Evil Genius?

For better or for worse, as anyone in my team would tell you, I don’t come from a gaming background. I don’t even come from an entertainment or sports background. I came from finance, and before that data science. And so most of my decisions, as cliche as it probably could sound, are very, very data-driven. I can’t leave the private equity realm mentally. I’m always thinking of downside risk and managing upside potential. And that translates, especially in a world where a lot of what we do is unknown. I’m almost ashamed of a lot of the things we’ve had to do that were firsts in the industry. We were one of the first esports teams to have an HR department; we were one of the first esports teams to help build kids’ camps and summer programs.

Things that would make you laugh in this day and age generally, are still very fundamental. And so that comes from a data decision framework around risk-reward potential, level of effort, and costs, almost like an engineering arm, to ensure that there’s the “why” behind decisions. So when we have to, as we do, have to pivot, change our course, throw something out and go in the complete opposite direction, we have a diligent framework of why we did what we did, so we know how to course-correct when that has to happen 19 times a day.

What are the primary metrics you look at for decisions?

Depending on where we are, the first is probably financial. We’re a startup, and every dollar counts, every dollar relates to how we continue to survive. And especially in COVID, where while our product became extremely popular, costs also rose, and a lot of where we got our money, direct sponsorship allocations, that infrastructure fell away. There weren’t a lot of people spending on marketing and advertising in a COVID world. And so cost is the first big framework we look at. We also care a lot about the voice of our fans and our community, because we are, again, an entertainment product. So things that we do that will authentically resonate with whoever we’re trying to target is critically important. So we think of the fans and the community quite a bit.

But then also, we’re a sports team and so our humans, our players, our athletes are also the crux of our decision. So depending on the decision, do we bring in a certain partner, will our fans like it? Will our players authentically engage with the product? Those are the types of decisions we make beyond what is the money. And that means we say no to things, it means we say yes to strange things, and hopefully, those are the good decisions to set us up for the longer term. But as we call it internally, there’s a little bit of a “matrix decision,” of all the constituents we have to think of, because there’s quite a lot of frequently opposing voices. We’ve made decisions that we knew, well, this might not resonate with the fans, but we know we have to do this. So how do we navigate this situation thereof? My shareholders will think I’m crazy because this hasn’t been done before and it’s a little avant-garde, but this is the decision we have to make here. And so it’s not easy, but it’s exciting.

Give me an example of a decision that displeased one of your stakeholders that you had to navigate through.

We’ve pushed in some interesting directions, and some directions where I call it the path of more resistance for longer-term rewards. And I’m actually very blessed that I have investors that very much are aligned with the longer-term vision, even when short-term cash is problematic. However, there are times where we’ve made big bets on teams, like actually entering into a title and doing things a different way. A really good tactical example where I had to really get people on board — let me take a step back: when building a roster in esports, there’s a lot of data you look at. We recently entered a new title called Valorant. And we built a roster exactly opposite of how every other esports team ever in the world has built a roster. They usually say, “Okay, take a coach who’s been in the space for a long time. Ask the coach, who do they know that’s good, and build from there.” We said, “Screw that. Let’s look at our data. Let’s pull API data of the best-ranked players in the world. Let’s sift through empirically, look at key metrics that we know align in-game, and build a roster from there.”

And so we took a very empirical building approach, which maybe doesn’t sound insightful for sports listeners, but is very different from esports, where most of the talent pool is known, especially in North America. We doubled down when we actually found out from an empirically built roster... that roster also included both women and men. So we started one of the first mixed-gender rosters in a competitive esports scene in the world, and that rattled a lot of cages and surprised a lot of people because it wasn’t a marketing play, right? It wasn’t all “this team to do this function for this marketing purpose,” it was very much [that we] threw all the books out the window and said, “This is the best team we think that can compete based on our methodology. And here’s what they look like, and here’s who they are, and let’s support them.” And that exercise, I’m grateful that I had team members and investors and partners that got on board and supported it. But it was very iconoclastic to what had been done and really pushed the envelope on a lot of different fronts.

I’m all about the methodology underneath it. That sounds very interesting. Video games are video games. The idea that there were single-gender teams to begin with has always struck me as very odd.

Oh, this is a pain point.

And that’s part of the culture of gaming.

Yes.

There’s just a whole culture to unpack there. You came in as kind of an outsider, you had fresh perspective — why do you think that was, such that creating a team empirically that ended up mixed-gender, was shocking to people?

It’s rough, I think there are three big reasons why esports can be a little backwards, considering how much of an advantage they should have by how the games actually are played and competed on, which are generally more accessible, right, for gender, for whoever.

The first is, five years ago, if you were an esports athlete, you lived in someone’s house with all your other teammates, and you played for 12 hours a day with not much infrastructure, oversight, or sometimes not even for pay, to make it big. And that, by design, the infrastructure of underfunded esports, where you don’t have salary, you don’t have benefits, parents with kids are not going to do that job, right? Women aren’t going to live with men in a house forever; are not going to do that job. People with committed relationships are not going to do that job. People with disabilities, probably not going to do that job. The job wasn’t accessible because the infrastructure wasn’t there to support it. And so we’ve actually spent a lot of energy making sure we did a lot of provisions.

All of our athletes are full-time employees with health benefits and 401(k) match which again, hopefully, doesn’t sound insightful to people on the call, but was a first for many people in the esports industry. To make sure we could bring in the best of whatever talent and break down those barriers to reasonable things that should be accommodated.

The second is, of course, the culture. I won’t shy away: The fact that me coming in as CEO was so big due to just my identity is disappointing — it’s 2021, to be honest — but not surprising, especially if you look at the North American esports player, right? The biggest problem we face is breaking down the perception of “gamers are alt-right dudes in a basement.” It’s not. Most people play games. And if you include mobile gaming, more people play games than not. But that education, the accessibility, the optics of people like not that example, is not well articulated. And so that also breeds a negative culture by people who come in and say, “Well, like attracts like.” And so we’ve pushed a lot there to ensure we bring in many different people from many different backgrounds to support and bring true optics of who is a gamer and who’s in the gaming space.

And then, of course, you took that teams, historically, it’s a compoundment of the funding and the infrastructure and the culture. If you had teams that were run by previous players, they don’t know better. They don’t come from out of the space and go, “Oh, you know what? Google runs this way. Let’s take these components and put this in our playbook, and try this. And oh, look, Tableau is doing this. Let’s try this.” It’s a self-perpetual feedback loop of how things are, not how things ought to be. And so it was stuck without forceful disruption. So I was glad to be one of the catalysts of forceful disruption in this space.

Well, so let me ask you, you brought up this notion that if you count mobile games, everybody plays games. That’s true. But your teams don’t play “games,” right, as a whole? Like, you don’t have competitive Candy Crush teams. Or maybe you do, in the lab, I don’t know. But you have a competitive Valorant team, you have a competitive League of Legends team, it cost you a lot of money to get that slot in League of Legends, right? Millions of dollars to buy that slot. I mean, that’s a big investment against an audience that is potentially fixed against people who are interested in League of Legends. I mean, I’ve watched a League of Legends match and I’ve played this game five times and I have no idea what’s going on, right?

That’s okay.

Right. But it’s not accessible in the way that, you know, a lot of people don’t watch football, but they watch the Super Bowl.

Right. Because that’s an event. It’s a spectacle. And actually going back to the developers question, that’s actually one of the metrics we look at when we evaluate developers to work with is: who makes their broadcast, their education, and their social materials accessible to a broader audience? Because it isn’t a one-to-one relationship between games, sales, and esports viewers, and even esports viewers by titles are not the same. Our League of Legends viewers are nothing like our Counter-Strike viewers, both in geography, income level, age, gender split, etc. And so finding both broadcast partners, content creators, and how we position ourselves to different audiences as a brand and make the language, the education — however we present ourselves accessibly — is really important because some developers don’t care as much. It’s for the people, of the people — very insular.

Some developers are really pushing to make sure the game is broader. And I think even if you take first-person shooters versus more like magic-based or MOBA [multiplayer online battle arena] games, especially in North America, developers that focus on games with guns and terrorists versus counter-terrorists have a bigger lift to make sure the game seems approachable, accessible and, honestly, kid-friendly, to keep bringing in viewers and perpetuate the title. It’s a hard challenge. I don’t think anyone’s done it perfectly yet. I think there’s a lot of room to grow. Traditional sports are definitely ahead of esports here, but people are getting smarter as there is a big rift, right? The average viewer is 16 to 30, but the average capital allocator or the average CEO or director at these companies that are running this are over 50.

You said professional sports have a leg up, which is an amazing way to think about the NBA, just like a scrappy startup with a leg up. But one of the things that’s true about pro sports — the NBA, baseball, and the NFL — they tune their product to make it easy to watch, because the market for playing football is actually very small. Very, very few people will ever play football. Maybe more people will play basketball but still, the market for being a professional basketball player is still pretty small. The market for playing Fortnite is huge.

Yep.

Potentially many times bigger than the market of people who will watch League of Legends. So there’s an inherent dynamic between the people who make the games and a company like yours, where you’re trying to make something that’s great and fun to watch as an entertainment product and they’re trying to make something it’s easier to participate in. Do you think that tension is unresolvable? Because when you say Fortnite is constantly changing the game, they’re doing it to make it more interesting to play, not more interesting to watch other people play.

Right. Sometimes. I know it’s a bad answer, but some developers run their own leagues and then I think you see those tensions pretty clearly, I don’t need to call them out.

No, call them out. You’re a CEO, call them out.

Some developers have let third parties run their leagues. And two good examples ... ESL and BLAST are two league partners, and they are focused on making a top-of-line broadcast and accessible product. And so depending on how much, again, the developers give leeway for people to use their IP of the game to create an ecosystem that really supports like, “high tides raise all ships here,” it seems clear to me — seems less clear to others, maybe — but it’s something where the right constituents are focused on the right aspects of the job, because it is a very large task, making games. Being a game developer is a huge struggle, very expensive, crazy amount of labor, very hard to keep up. Esports is interesting in that it brings great visibility, gives good player conversion, boosts product reputation, but for some of these, like for example Riot or Valve, esports, even though it’s multi-hundreds-of-millions dollars for them, is still tiny compared to the game sales. It’s not really the main focus. So outsourcing to people whose focus that is, is excellent.

And so it is something we definitely have to evaluate a lot around what teams do we enter. You mentioned franchising. One thing we love about Riot and them franchising League of Legends is even though you might look at that price tag of a franchise medallion and go, “Holy crap, who would spend that money on this?” What it shows is, though, we have a voice at the table and how the league is constructed and supported. But also it’s a true legal and financial stickiness in support to make the product viable, right? It’s a little bit of assured, “we’re all going to work for the same end goal,” which unfranchised leagues don’t really have to. They have no one to report into. They don’t have a board of owners per se, who have invested into the product. So each developer is assessing this and navigating in their own way per se, but it definitely is not something to be underlooked.

So I read a report somewhere that for Evil Geniuses to buy into a League of Legends franchise costs almost $30 million. Is that true?

That’s directionally correct.

You are a very good CEO. So, okay, it’s a big number. You’re deciding to make that investment, do you think you’re going to get a 10x return on that investment just from playing the game? Or is it the ancillary universe of content creation, making celebrities, maybe you’re going to sell a Netflix show — is that the money?

In the next five years, it’s a mix between the league revenue share, so we get a cut of the work that Riot does, which is excellent. As well as exactly what you said, the ancillary, our direct sponsorships, our player appearances, giveaways, our third-party programs that we run that are supported by the core of our product, which is the team. Prize pool is not a driver for revenue. I think that’s the biggest misnomer in esports space. People love floating. One of our other teams competes for upwards of a $40 million prize pool for a singular event called the International every year in Dota. People are like, “Wow, esports teams must be so rich with that prize pool.” That mostly goes to players or back to the league. So, franchising is interesting to us, because it gives a revenue share, we get part of broadcast rights and revenue, part of league sponsorship rights and revenue, as well as then we can sell our own direct sponsorships against it too.

So here’s the next big difference with a traditional sports team. You own the Lakers — you would be great.

I wish.

Everybody, put yourself in that headspace. Okay, so you own the Lakers. You make a lot of money owning the Lakers, maybe you sell concessions, you sell tickets, you have all these ancillary things around the Lakers. Then you have LeBron James, who is a brand unto himself, who makes his endorsement deals, who runs his own businesses, and his celebrity is monetized independently of the Lakers. Can your players monetize their celebrity independently of you? When I’ve talked to other esports CEOs, Lee Trink at FaZe Clan, what have you, they’re very directly monetizing that celebrity themselves as their business.

Yeah. See, this is where the entertainment comes back in. We own those rights. We sell those rights. We manage those rights. So our players are celebrities in their own rights and realms and that helps the team. They, of course, get a cut of that, but the onus is on us to manage and support, and sell against, and brand build for them, essentially. And that’s another reason why the model is a bit more sustainable because it gives us additional maneuverability around, how do we activate with partners? What types of activations do we do? What type of sponsorships can we sell? And all the different spaces we can sell, for example, might have an esports athlete, but then if they’re very much into fitness or fashion, you can bridge other areas of similar culture more naturally than if they were off on their own or just through gaming.

So those are your deals, not their deals?

Correct.

And so I’m just assuming they’re full-time employees, they have 401(k) and health benefits. Inside of those contracts, you’re saying we’re going to own a percentage of all the deals that happen around here.

We often broker and source them ourselves too.

So if they, again, not to harp on FaZe Clan—

That’s okay.

But when Lee was on the Vergecast I harped on it, so it’s fine. But when I interviewed him for another show, he had just had a player who had gone out, made his deals, and they had wanted a cut and that was a contentious issue, right? That even if you’d gone and brokered your own deals, that company would get a cut. Is that an issue that you’ve had to deal with, with your talent?

FaZe Clan is probably a good example because in the bimodal spectrum of how the esports teams operate, they’re full-on entertainment.

Okay.

They don’t really follow the athletics model well.

Yeah. You can’t see Nicole. She’s being very careful. I’m watching the thoughts form in her brain before she says them.

They’re so good at entertainment. They haven’t nailed the sports side, though. Oh, man, Lee’s lawyer’s going to call me up tomorrow. So our employment agreements are a little different. Also, by EG being a product and the subsidiary of a large financial services private equity company, our employment agreements or legal structure is, we probably fall on the far end of the spectrum of really buttoned up, really proper, legal risk-avoidant.

When you think about the celebrities that you’re minting in your leagues, is it total opportunity; you’re going to be the most famous League of Legends player? Or is it, you’re just going to be a celebrity athlete?

I think that varies by the player, right? The good news is I have 41 player-athletes. It’s a manageable number to really know each as a human. And so there’s quite a bit of variation in their interests and their passions. Some of our athletes are like, “I don’t want any deals. Don’t put me on sponsorship ask. I just want to play.” And if they’re good enough, great. Put your money where your mouth is, and that’s fine. Some of them are like, “I really love this game. But I love making content in the fitness space.” We can support that. Some are like, “Hey, I used to be a pro” — Actually, I can give a good example; we have this one player, Ricki Ortiz, she used to be one of the best Street Fighter players in the world and now she’s a content creator. And she’s super into Vogue and fashion. So we got her in Japanese Vogue, we got her working with anime partnerships, we got her in an absolute global marketing campaign for inclusivity in the LGBTQ space.

We can navigate much more by the individual because it’s not an overwhelmingly large vehicle for us to really manipulate and support. And it’s very hands-on, tactile, just by, I think, the industry maturity. It’s a bit more junior, where every person really has a voice and matters, still, in esports. It’s not an infrastructure as layered as all the agents and managers and the posse that you find in many traditional sports.

Well, so this is something I think about a lot, especially in the creator ecosystem, which we pay a lot of attention to; it’s new, but the cultural product it’s making is maybe not new, right? It’s people making videos. At the end of the day, it’s still just people making videos, then they get monetized directly or through advertising, or some way. And so the infrastructure of Hollywood has sort of raced toward the creator economy. And so you do have lots of law firms now, and agencies, and marketing people. And the creator economy is kind of big enough to support all that. Is the esports economy big enough to support all of those additional bits of infrastructure yet? Or is that just growing slowly alongside?

You know, what’s interesting to me is, that economy exists, but ... I’m not sure if it just is the education bridge of “Hey, this ecosystem is available,” was made aware or not, but it’s not well saturated. For our players, only 30 percent are represented by agents. And by agencies that are the real ones, you know, UTA, CAA, large conglomerates. But then there’s a lot of like, “Oh, my uncle’s an agent.” There’s a lot of—

To be fair, there’s a lot of that in regular sports, too.

Okay, that makes me feel better … maybe not, actually. I can personally say, even as a team owner, more broad-facing incumbent providers in the agency, the sports infrastructure, even like sports science and wellness, please enter the space. Because that helps us grow at a mature and sustainable level. Right now there’s still some Wild West. And we’re an North American team, even though we have global competitions, but the more eastward you go, the more Wild West it becomes in that infrastructure. Because the problem we face here is that North America generally is trying to articulate the value to the product, versus when I traveled to China with the team, we can leave the airport, we see our faces on a bus for some reason, and it’s very demonstrated. People love esports, but the infrastructure and the money behind it isn’t as much. And so there’s often competing universes under one big broad bucket of esports, [which] yields very different results on the back-end infrastructure and supporting businesses.

Wait, pull that apart. What do you mean? So in China, you’re more famous, but there’s less infrastructure, and there’s less revenue, it sounds like?

Yes.

Whereas here, there’s less sort of cultural awareness and fame.

But much more revenue in America.

It’s America, so there’s more lawyers.

Correct.

As a lawyer, I can say that. There’s more lawyers and agents and potentially more revenue?

Yes.

When you say that leads to different back-end decisions, pull that apart. What kind of decisions get made differently?

It’s fascinating, right? So in some franchise leagues we have regulations we follow, and some leagues where there’s no regulation. So we can pull players from across the world, but we’re a US company. So they have to be of the legal working age, they have to have certain hours, the minimum wage requirements, versus we sometimes compete against Chinese teams; are you 12 or are you 16? I have no idea. And oh, why does your agent also look 12? And who’s paying you guys? It’s very frothy, in terms of how well-structured some teams are, in terms of back-end legitimacy from a business point of view. However, what is an interesting equalizer is that competitively, right, if we’re in a round-robin open qualifier tournament [that] takes place in Singapore and it’s us, backed by institutional investors and sports investors, versus a group of friends from the Philippines who have done nothing but played this game for 10 years, it’s hard sometimes for us to give a value proposition of why go through all the rigmarole of structure.

And when some of the athletes can still see, well, if I just live in the EU, if I live in APAC, I don’t need to pay taxes, I can just play. It’s the education component of why being an infrastructure business and being legitimately supported — for very short-term gains-focused youth, which tends to be our athletes — is harder for us to navigate and manage. Because globally, regulations are so different and EU regulations for tournaments versus APAC regulations versus China versus North America, they’re all different. And it requires us to be very quick-footed and have a lot of support to make sure we can navigate those scenes appropriately.

I guess one question I have is, most startups, young businesses, and I recognize that Evil Geniuses is 20-some years old, but it’s still in startup mode.

It’s a startup.

You’re running a startup. They don’t run toward asymmetric global competition, right? That’s not an instinct for a startup. And then, in particular with sports, sports are traditionally very local. Esports does not seem like there’s a New York City team or a Kansas City team or whatever, right? It’s inherently this de-location. What’s the word I’m looking for?

It’s not geo-affiliated at all.

See, this is why you’re in charge. So it’s not geo-affiliated to a place and then you end up chasing after a team of kids who live in a house in the Philippines. Why not try to make it geo-affiliated? Is that just a bad business idea?

I get this question a lot, especially from traditional sports people. Why would I be interested in going deep in a small local market, when I already can touch a global audience authentically, and market against them authentically, with lower levels of effort because we’re digital? If you look at EG — we tease that as a first-world problem. We just started setting up our Asia and Russia-based social media infrastructure. We grow like 8 percent month over month organically. It’s massive. The fandom globally is massive. And those [are] maybe not as valuable as a consumer from a marketing point of view as a North American viewer or an EU viewer, but the volume of people is something to really contend with. And we’re a digital product, we are accessible by everyone. Of course, EG [is a] Seattle, Pacific Northwest, esports team, which is great. We have fans here, we can do local activations, but I think COVID showed this perfectly; we can still connect with our community, even when local things are disrupted, because our community is global, and that’s a larger breadth. Just our main social channels hit over 70 million impressions a month, not through targeted, that’s all organic impressions grown over time versus — bear with me, I’m not a geography expert, I don’t know how many people are in Ohio — if I were to start an Ohio esports team.

Wow. Hard shot at Ohio from Nicole LaPointe Jameson.

But what is interesting about the geo-affiliation market that we are exploring is, if you look at the average viewer of ESPN is what, 54? And why do people become fans of sports teams that you traditionally see on traditional sports broadcasts? It’s usually family, or I was born in a location, or I live in a location, so I’m a fan of the location’s team. But because we are an entertainment product, we can create value proposition through our brand. Why do you become a fan of a brand, kind of like clothing, or a music artist, which can have broader reach? So we can do both, we can still geo-affiliate, but we can go broader. But in terms of the volume of the pie that I want to cut a slice out of, geo-affiliation is always something we look at, but it’s not going to be my priority because I have many more fans across the globe than I could just tap into only in Seattle. But we can do both authentically and well.

When you talk about those global audiences, you’re talking about impressions. Again, there are other teams that have just leaned fully into Twitch, have leaned fully into YouTube. Some of them leaned into Mixer — that didn’t turn out so great.

I’ve checked out your Twitch channel, I’ve looked at your YouTube, those aren’t spaces you’re playing in very aggressively. Was that an avenue of expansion for you?

Definitely something we’re looking at. Thanks for calling me out. We just hired some heavy hitters from both gaming and entertainment to help boost our digital marketing and digital social. We are pretty good at the native content creation, more slice of life, but more of the FaZe Clan entertainment, that’s where we’re expanding. We focus a little differently. EG historically, before I came in, was known as only really an athletics esports team. So we’re a little bit behind on the expansion to entertainment and content product. But we’ve moved into spaces where we’re either a first mover or the only mover. Really also touching around, I mentioned the education and bridging what is esports for different audiences, as well as DE&I spaces, making sure esports is accessible. We were one of the first esports teams to actually have a podcast. We were one of the first esports teams to have multilingual content creation. So we’ve taken bite-sized steps and directions we knew we could own before doing kind of the table stakes of what everyone else is doing.

Do you think that cuts against the “You’re going to be a great professional athlete at your game,” when, okay, we also need you to monetize your life, like we need you to live in this house and party all the time?

And that’s exactly why we’ve done it very carefully. Because … if you ask me, at the end of the day, my athletes are athletes, and it’s great. We have to support them, you have to build the brand, we have to keep the lights on in the business. But if they suck at the game, that’s not interesting to me at all. And so there is a balance, right? You can’t be all things to all people. And so that manifests into us signing pure content creators, that manifests in us carving out, okay, you get two production days a month, and then oh, if you missed that window, partner, you can’t use this player right now. We have to manage their balance because unlike just content creators or other esports teams that fully focus on the entertainment side, we blend both.

Let’s talk about your diversity and inclusion efforts here. It seems like you’re pushing hard in the entire space to make that a mission of your company. It seems like you have some metrics that say this is actually going to help us win more, but it is just a challenging space. You are a woman and a person of color in gaming. I’ve been around, I know that sucks. How do you manage that? How do you manage the sort of oncoming negativity that comes with being in that space and standing up for inclusion— especially in gaming. It’s hard everywhere, but this is a culture that has been fairly resistant to it?

Part of it’s personal. When I came into the space, I was nervous. I was a “triple first” in terms of esports team CEOs: race, gender, and age. And I was very nervous of what the reception would be like. And part of me was not surprised by the reception, but part of me was also very lifted by the amount of people that came out of the woodwork per se, and were like, “We’ve been here, it’s amazing to see a voice or someone that looks or can speak for us like us.” And that story became more and more frequent. There are so many people that don’t fit the perceived narrative of who a gamer is, in the gaming community.

And so part of it is personal. I’m so excited to have a platform to give a megaphone to people whose voices felt like they weren’t heard before, even though they are legitimate parties and creators and innovators in the space, but also, professionally, gaming is ubiquitous, and it should be ubiquitous. And the fact that no other organization has figured it out, of how to actually navigate that space well, is silly. Because for me, again, I go back to pick the content creator, pick the pure athlete, I always want the best athlete, but the data shows the best athletes aren’t just the ones you know and have conversations with because they are faces in the space.

If you open doors for the best of the best, they tend to come. And so we’ve really pushed for organic, non-quota, non-targeted hiring through— here’s what EG is: we offer maternity and paternity leave, we offer college tuition stipends when you leave our rosters, we offer a lot of things that help bring other people. and break down barriers that might have existed, into the fold. Just in two years, right, we are a tech and gaming company that is 52 percent female leadership and management positions. We haven’t targeted any women in hiring. We are 30 percent people of color, which is also very high for gaming. Even our athletes, if you take diversity as more — which we do — than just race, ethnicity, or religion, we have parents that can actually compete on our roster, we have people that came from low-income, third-world countries that have been able to come here and bring different types of social mobility to their life through esports.

And we like to celebrate that because, at the end of the day, these are the best athletes. So whatever we can do to get the best athletes in our house works for me as a business. And people rally behind those storylines because again, why do you follow a brand that is not geo-affiliated? It’s the storylines, and it’s the people. And when you have people with compelling stories that speak to you as a consumer, EG is the voice of the people in gaming, and no other team has taken that stance before. And it was a very authentic and easy point for me to come in ... I started at EG with eight people; we just hit 150 people that fall under that vision as well, and like to support that space, so it’s been good for us.

I’m looking forward to the soft-focus human interest package before your… Like they do at the Olympics. Let me ask you this, eight to 150 college tuition stipends, better health care, right? Those are all costs.

Yep.

You’re talking about a massive increase in costs. So now I’m going to play the role of the private equity investor and say, how are you growing revenues to justify that massive increase in costs?

Well, first of all, investor, thank you for supporting me in this endeavor.

This is good, it’s like being in a meeting with you.

Right. Second of all, these are the peripheral business arms we then use to support. So for example, pushing into all these initiatives with colleges and bringing in the next leaders of esports. We’re partnering with universities to build out their esports programming, curriculum, facilities, whatever it is. That consultation pipeline, often rivals, depending on the season or the quarter, rivals our direct sponsorships for our teams. Those are big bucks.

Really?

Those are edtech bucks. I love edtech bucks. Or, even our community partner, if you view it as, okay, a lot of esports costs go to direct marketing, but we can do good in the world, bring up brand awareness and get customer conversion or fan conversion through community partnerships and goodwill. So we’re really strategic around who we even partner with in terms of community partnerships. And so we’ve been able to look at areas that we authentically care about, and find ways that are not predatory or actually support the core of our business by bringing in revenue but also boosting our mission. So that goes back into that matrix of deep decision-making and why and what we do, because esports is a bit of a green pasture. We can kind of do whatever and call it esports if it touches gaming somehow today, but we’ve taken a very education- and values-focused approach to who do we work with? Who do we partner with, and why? And that also resonates with partners. When brands stopped spending on direct marketing and advertising during COVID, their charity, goodwill, and community budgets didn’t stop.

So we were able to activate and support brands, bringing their awareness to different spaces through what we offer in activations. And by being nimble in those areas, we’re able to show positive traction across fandom development, revenue development, even competitive results. Again, without deprecating our core product.

One of the challenges entertainment companies in particular face when they focus on diversity, and sports leagues too — and traditional sports leagues are all over the map on this when they talk about diversity and inclusion — is, when you’re trying to get everyone, you’re trying to please everyone by the nature of your product. And so if you irritate half of the country because you’re continuing to talk about diversity and inclusion, you did a podcast episode on Black Lives Matter. The NFL is not doing that, rIght? They are trying to pitch a huge tent to get money from everybody. How do you balance that, especially as you’re growing?

It’s a tough balance. And I think it is, the more internal culture-deflating conversations of, how do we pick what conversations we enter and what conversations we don’t? And not to sound overly annoyingly corporate, but it starts from our mission, vision, and values and quite literally, again, going back to my annoying data decision-making, right? Does it fit into the matrix of this is what we set out to do? Does this aid? Is it neutral or is it negative to these causes? And building a playbook of how even my team members at EG can operate, understanding, okay, what lanes do we play in and what lanes do we not? Do we have a voice and do we have a say in this conversation? Does it help us? Or is it to make us look good? Because we don’t like to do things just for the optics of it. It’s a waste of energy for me, and people can see through that shallowness.

So how do we show through action? And how do we back it up and support the things that we do and the conversations we want to enter into? That tends to be our filter. But it’s also great because we have a really good litmus test of what our players care about. Our players pick half of our charitable donations that we do every year. It’s us that decides where we support. It’s in alignment to our league partners, like what are they trying to achieve and where are goals that we can co-help together, as well as what sticks to my shareholders’ values, my investors’ values, and our corporate strategy. And that means we do elect to not participate in things, but it also means we are selective and very purposeful and thoughtful on what we do choose to participate in.

What’s something you chose not to participate in?

There were many race-related incidents in America over the past year that I think everyone is aware of in terms of legal justice and recourse for race-related incidents. And it’s hard because I have a lot of people at EG who intrinsically, deeply, deeply care and they’re like, “Well, we have a platform, let’s say something. Let’s push.” That’s a conversation that we can support privately as individuals, but as a corporate entity, what can we do that is more than just showing social media support? We didn’t see a clear pathway there, of where could more than just a dollar donation or a tweet really push the needle? So that’s something we decided to handle differently than a lot of public support that you saw other, maybe social media accounts of other sports teams do.

It’s also tough, right, because we’re global. There are a lot of incidents of okay, well, if we speak on this, do we also talk about similar happenings in the Middle East, in China, in Northern Africa? And so making sure we’re thoughtful around, okay, if we do this, what are the ripple effects? And what’s the full network of what is the message we’re trying to say? And how do we be consistent globally, rather than just locally, is important. And so that means some conversations — because we’re not ready to have them or we’re not ready to put, again, action behind the words — we stay away from, or we think longer-term; how do we support and how do we create long-term positive progress?

Let me push in on the China point. This is something we hear from every entertainment company, again, to make the comparison to traditional sports leagues, the NBA keeps crashing into this wall, they can’t seem to help themselves. You’re doing a lot of business in China, your players are on the sides of buses, I’m told. That’s a very different legal regime. It’s a very different human rights regime. How comfortable are you with how much of your business requires China?

It can be hard, personally, knowing the elephant in the room is there are many spaces in business globally that we participate in, that me as an individual might not usually be able to participate in by my race or my gender, especially, and that is hard to navigate. And so the most we can do, again, by showing that being a values-forward esports team, sticking to our guns around our mission, and showcasing competitive excellence, can hopefully push in authentic ways rather than force people to confront something they don’t want to confront, to bring positive change.

We try to do the most that we can do realistically, and we’re very big realists around what has impact and what doesn’t versus what fights do we take that stop our business from continuing. We have to be thoughtful. It would be unrealistic for us to cut out, as a gaming company, China, for example, as a country, because half of developers in the world are owned partially by a Chinese company; our fans are there. And so again, trying to be thoughtful of how we navigate what we participate in, and why, is important. And I cannot claim, I will not even pretend, we do it perfectly. We do it excellently but we definitely try every day to be thoughtful around the “why” of what we do, to bring people along with us on our mission, and not isolate fans or communities.

There’s the positive side of your mission, what you support, what you say, what you donate to. There’s also a more negative construct, right? Last year, you removed two players from the roster for their conduct. Walk me through that. What kind of decision was that for you?

Removing players off contract cycle is something we take super seriously, both for legal and financial liability, but also, it’s very disruptive to the teams, to a community. And so we take any claims of someone breaking our employment conduct or our harassment policies, very, very seriously. And we believe that people can make mistakes and recover from them, but there are certain mistakes or repeated actions that I cannot in good faith turn a blind eye from, because it also creates an internal unsafe environment. And I’m trying to protect the masses of my people at EG. And so we did have to remove some players later last year, around similar claims, it’s a process, right? We want to keep it objective, so we bring in third-party investigators to due-diligence the situation. We find documented incidences of either repeated behavior or something that breaks the code of conduct very explicitly, and then we have to make a decision based on that.

And so what pains me about the situation is some of the behavior had been prior to my time, and I hadn’t been aware of it. And it had only been brought to light through social media, in which case we quickly, quickly acted. But it was a big call to action that I had to be better, and my team, we could do better in proactive management. So what had not just resulted from that in the removal was, we do social media audits and deeper background checks with all of our hires, not just staff, but also players. We also do quarterly harassment and good communication skills training through a third-party vendor. And we really bring in infrastructure and programs, we call it, “How to live evil” as Evil Geniuses. Around both, players, how do you think of your brand on social media? How should you do code of conduct? What are resources you have to help if you ever feel uncertain, as well as even staff and management crisis and de-escalation training.

So we took this super seriously, it, again, is a cost investment that I’m lucky that I have investors to financially support, because I do believe that is needed for us to continue to do well in the long term, even if there’s a short-term financial implication. But if I create an unsafe work environment for myself or others, it defeats the whole purpose of trying to grow and expand and bring a positive outlook to the gaming industry. So [we] don’t take those things lightly at all, we take them really seriously. And it was a good wake-up call and call to action of how can we always continue to optimize and do better?

I’ve asked you a lot about places you’re increasing costs. I want to end with where you’re increasing revenue. What are your revenue lines right now and where are they growing?

We have a really great and very fast-growing direct sponsorship line. My sales team is amazing. I was able to somehow convince a bunch of people who had never worked in esports and did sales, both sell- and buy-side, and traditional sports, and consumer product goods to come join this clunky esports team and sell it, and they’ve done fantastically. And that’s our biggest revenue stream. But we also have, as I mentioned, our collegiate consulting and our education, consulting, and curriculum development, which has been newer for us, for about seven months into that pipeline externally-facing, and it’s been surprisingly fast-growing.

Our newest product — and we actually roll out with our last public component [at] the end of this quarter — is our tech and data analytics, because we use tools to make decisions internally. We realized we could white-label those tools and sell them direct. And then we also realized we could white-label even more and sell to larger partners, including smaller leagues, other teams, fantasy and gambling sites. And that has been an excellent plug-and-play for us, that we didn’t realize that would be as lucrative as an entire business line as it has been, and so we’re going deeper into that area. And then, of course, the regular marketing, advertising, ad sales, but that’s tiny. Merchandise, everyone always talks about, oh, fashion and apparel, that’s slim margins there. We kind of just keep that for the fan excitement. Managed costs.

Everyone thinks Supreme is the business, and it’s not the business.

People always give me a lot of shit for that too, like, “Your merch sucks.” And I’m like, “I’m sorry, I don’t care.”

That’s amazing. Which one of those is growing the fastest?

You know, from a total volume point of view it’s probably direct sponsorships. The collegiate is interesting because education budgets or university budgets, they follow a different fiscal year. It tends to be May to June and May to June versus Jan to Jan. And COVID has reshuffled quite a bit of traditional sports or athletics or club or intramural budgets into things like esports programming. And so very recently, our pipeline in terms of potential has quadrupled, just in the past two months this year. Hasn’t signed much yet from this newfound growth, but I think end of this year, we’ll have a really good sense of, our collegiate and education proposals might be the ticket to better support. And then, of course, we have our evergreen league revenue share from our league partners.

Last question. What’s next for Evil Geniuses? What should people be looking for?

I think we’re going to continue to lift trophies obviously. It’s an exciting year for us as live events, we’re hoping, will come back by the end of this year, and we’ll have some very nice big activations, coupling our tournaments. But also, I think we’re trying to get smarter around how do we continue to build out data-driven decision-making around esports athletics? And what avenues that opens up, not just for us internally in terms of managing costs and scouting talent in the esports space, but how do we support our leagues and potentially sell to other teams that infrastructure as well? So that agency roster scouting play, I think, is an untapped area we might want to tap into.

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