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XLIVE Interview Series - Ari Segal - Immortals LA Valient.jpg

XLIVE Interview Series - Ari Segal, Immortals/LA Valiant

This week on the XLIVE Interview Series we sat down with Ari Segal, President of Immortals/LA Valiant.

We spoke about a number of things from his work with the NHL, how he transitioned into the esports space, LA Valiant’s partnership with Starz network, and where he sees esports leagues in the next 5-10 years.  Read the full interview below!

Previously you worked with in the NHL with the Ducks and Coyotes. What was it that drew you to esports and Immortals and what similarities have you been able to draw from both experiences?

Certainly anyone who enters esports is drawn to the momentum and growth of the industry. By any measure –  players/participation, viewership, revenue, social reach and engagement – esports is already established, growing rapidly, and poised for sustained growth in the years ahead.  For me, joining Immortals was driven by a few factors:  (1) the macro industry trends as I indicated previously; (2) Immortals’ unique position within the industry, and the opportunity I believed that unique position and the company’s resources created for Immortals to outperform in a growth market; (3) strategic alignment and common vision with Noah Whinston (CEO/Founder) and our Board of Directors; and most importantly, (4) the people.  Noah, our Board, and our staff were simply people I was excited to work with.  I believed I offered a complementary set of skills and perspective that would be accretive to the voices, opinions, and experience set already in the room, and I also felt the assembled individuals and strategic partners connected to Immortals (Steve Cohen/AEG; Peter Levin/Lionsgate; Steve Kaplan; Michael and Gregory Milken) would help mentor and develop me as a (somewhat…) young executive.

In terms of similarities, my view is they dramatically outweigh the differences.  We’ve surveyed fans and compared notes with other organizations, and there are 3 core reasons people follow esports.  We call them “hype, mastery, and community.”  Hype is that feeling you get when you see an amazing play, particularly when you share that feeling with others.  Mastery is the sense that you’re watching something or someone truly special, and their skills inspire you either to improve and practice or simply to shake your head in wonder.  Community underscores everything – it’s the infrastructure that really enabled social human evolution; according to at least some sociologists, it was human beings’ adoption of multi-person agriculture practices that galvanized early civilization.  We have both a biological and practical need to be together.  Sports bring us together.  Our job as sports executives is to be enablers of that togetherness.  That’s just as true in esports as it is in traditional sports.

Clash Royale [Immortals LLC]

Clash Royale

Immortals came into the space in a very different matter than most organizations prior, largely working with key investors and bring in a super team of talent. Can you share with us a little bit about your different partners, their reasons for wanting to get in the space and what everyone is looking to get out of it?

I wouldn’t want to speak too much for our individual partners, and certainly each investor in any company or enterprise has his or her own unique set of objectives. However, here’s what I think is special about our group, and what all of our strategic investors share:

  1. Long term, truly strategic investment horizon. As a management team, its invaluable to have a Board and lead investors who are committed to doing the right thing for the long term health of the business and industry every single time.  We are never, ever put in a position to optimize for the short term at the expense of the long term.  AEG, Lionsgate, the Milken Family, and Steve Kaplan are interested in building lasting, sustained value in this ecosystem for generations.
  2. All for one, one for all mentality. We talk about this a lot, and I think this may really be our secret sauce.  While no one or no company owns 100% of Immortals, all of us in management and at the Board level function as if we do own 100%.  Practically, that means each of our strategic investors integrate us into their respective portfolios as if we were a wholly owned subsidiary – we therefore have essentially unlimited access to people, resources, contacts and relationships, and execution capability.  One example of how this works was the VIP Cocktail Reception hosted by Lionsgate on the eve of the Milken Global Conference.  Mr. Milken graciously invited us to host an event and to market it alongside other pre-conference events; Lionsgate planned, financed, and executed the event, in collaboration with our team; AEG helped us source and host several key C-level executives at major brands.  And, at the event, all of us wore LA Valiant lapel pins.  Peter Levin (our Chairman), Daniel Englehardt, Ryan Linderman, and James Wing from Lionsgate are like family to us, and everyone who attended that event could feel how genuinely they support the LA Valiant and Immortals.
  3. Willingness to roll up their sleeves and dive in. I’ve said this publicly before, so I’m not breaking any news:  I’ve never experienced the engagement level of our Board.  They’re available and accessible 24/7, and 100% plugged in to the day-to-day operations of the business.  The consistency of their engagement allows us to be highly nimble and flexible, as we spend almost no time on perfunctory catch-up/surface content; instead, everyone has a deep knowledge of the business and we can quickly dive deep into the nuances and material issues that require thoughtful analysis and conversation.

Overwatch league has required all its participants to undergo a new name and branding. Now that we are well into stage 3 of OWL, what are your general thoughts on this and how has it helped grow the Immortals brand or have you seen a segment of just Immortal fans and just Valiant fans?

At first, we resisted this a bit, for all of the obvious reasons:  we felt it could divide our fan base; it was new and non-traditional in esports; etc.  However, once we actually started to analyze the impact and go through the exercise of a cost/benefit, we came around very quickly and actually found it efficient and sensible.  Our partners, AEG, offer a compelling case study in how this model can actually be really effective.  AEG has built a phenomenal culture and has a sterling reputation globally.  AEG recruits amazing people, trains them exceptionally well, and indoctrinates them into a certain way of doing business – the AEG way of doing business.  That involves over-delivering for partners and customers; maintaining best-in-class facilities; operating events at the highest levels possible; innovating; and giving back.  Those values and operating principles make up AEG’s institutional DNA, something that all of AEG’s people, facilities, and assets reflect and embody.  At the same time, AEG owns and operates the LA Kings (NHL) and LA Galaxy (MLS).  Both teams are infused with AEG’s institutional DNA, and AEG leverages that DNA to drive value for Kings and Galaxy fans, players, partners, and other stakeholders.  But, at the same time, Galaxy fans are not necessarily Kings fans and Kings fans are not necessarily Galaxy fans – there is some overlap, but not complete overlap.  Different branding allows AEG team executives to take all of the best parts of their collective organization and package the right mix of things (people, voice, look and feel, etc.) to deliver almost a customized version of itself for the fans and stakeholders of that particular team.  It’s still AEG, but it’s the version of AEG best suited to an NHL audience in LA, or the version of AEG best suited to an MLS team in LA, or the version of AEG best suited to a music festival in the desert or a bike tour across California or a real estate development and stadium district in any of five continents.  AEG has deployed this strategy successfully (globally) for decades.  We’ve spent a ton of time with senior AEG executives and believe that we can learn a lot by executing a similar strategy in our business.  And, we have those AEG executives as partners to help guide and educate us along the way.

Valiant team photo [Los Angeles Valiant]

Valiant Team Photo

Earlier in the OWL season LA Valiant announced a non-typical and non-endemic sponsor with Starz’s network original series, Ash vs Evil Dead. How did this partnership come about, and what are some of your goals in bring Ash vs. Evil Dead into the esports space?

This was a really fun one, and the first time a content property became a kit sponsor of a major sporting brand.  From my perspective, there were two key things that drove this partnership:  (1) a desire to innovate; and (2) a belief in audience cross-pollination.  With respect to innovation, it wasn’t so much about being first to market with a content property-based kit sponsor (though certainly that was cool); rather, it was about trying to differentiate and elevate what it meant to enter into a partnership in OWL.  The core assets in this partnership were all about experiences – live, “money can’t buy,” unique experiences for fans.  It wasn’t necessarily about pushing a particular product or marketing a particular offer; instead, it was about trying to create a common currency and experience set among potentially two different audiences or fan groups, and facilitating a merging of those two groups.  (This is the audience cross-pollination I referenced earlier.)  So, for example, we brought the cast of Ash vs. Evil Dead to Blizzard Arena, and allowed Valiant fans to watch a Friday night match with the cast, and then participate in a post-match autograph signing and photo session.  Access to the cast encouraged Ash fans to come out to Blizzard Arena and experience OWL and the LA Valiant.  At the same time, our players have attended screenings of Ash (e.g., the season premier), and we’ve had sweepstakes and contests that allowed Valiant fans to interact outside the context of OWL with our players at these screenings.  This encouraged Valiant fans to experience Ash.

So often in esports, or around esports, we feel folks try to put things in finite boxes – this is, this isn’t.  Our goal in bringing Ash into esports was to say rather than focus on limiting what we are or what we can be, let’s extend the touchpoints we have with our fans further outside the game and competition, and make being a fan of Valiant and member of the Valiant community about engaging in fun content and experiences even if those things have nothing to do with Overwatch – and the same thing for fans of Ash.

Over the past few months we have seen many brands enter the esports space, whether through team partnership or through sponsoring a league or tournament. What do you feel needs to change in the esports landscape to have more mainstream brands and organizations enter the space?

The change is already underway.  Many brands are either in, diving in now, or waiting for the right moment to get in.  To the extent that there are still some hurdles to clear, we prefer to look inward and think about what we can control rather than to give in to some sense that macro changes are necessary to facilitate our growth.  For me personally, partners (and season ticket holders) should be treated almost like investors in the team.  I mean, to some degree, they are investors.  Think about it – when a Mountain Dew or a K-Swiss or a Microsoft puts its brand alongside Immortals or the LA Valiant, we become custodians and protectors of those brands.  We have a duty to not simply fulfill whatever our contractual obligations might be, but to conduct ourselves and operate in a way that elevates every single player, customer, counter-party, or other stakeholder’s perception of our partners’ brands.  By the way, this is the right thing to do, but it also makes sound business sense:  the most efficient way to acquire a customer is through a referral; customer acquisition cost is effectively $0, and someone has put their personal relationship capital on the line with someone they like or trust or do business with to vouch for your company.  That’s the best sales lead imaginable.  This is how AEG has built its global partnerships business – by consistently overdelivering in every way for partners, engaging in fewer, meaningful long term deals (so that they can devote the necessary resources to service partner accounts properly, to their own internal standards), and by being introduced to new partners by current partners.

In my opinion, too much focus, both in partnerships and ticketing, is allocated to new business at the expense of servicing existing business.  For every $1 spent to acquire a new customer, $5 or $10 should be spent to show an existing customer how appreciative you are for their trust, commitment, and business.  We’re fortunate to be building a stable of endemic and non-endemic partners.  If we service these accounts the way we need to, I’m confident that Immortals and the LA Valiant will have a thriving sponsorship business.  (And once we have home games, we’ll implement the same strategies and take the same approach in building lasting relationships with season ticket holders – building relationships with and getting to know season ticket holders in San Diego (Gulls) and Arizona (Coyotes), and reshaping the business to be responsive to their feedback was among my favorite things about my prior jobs – I still interact regularly with members of The Colony in San Diego!)

Soon, LA Valiant will be hosting its OWL matches. Can you share with us a little bit about some of the strategies you have in place to grow the community and brand for when you will be hosting your own games? Do you have a venue yet?

In terms of venue, we’ll be playing home matches at LA Live.  Initially, Microsoft Theater will be our home venue, but an exciting aspect of LA Live it how it affords us some venue flexibility.  We can, for example, stage a match in The Novo, which has significantly less capacity than Microsoft Theater, and make it super exclusive, driving demand even for matches on non-optimal days.  Alternatively, as we grow our fan base, we can level up and host matches at STAPLES Center, the home to iconic brands and teams like the LA Kings and LA Lakers.  Forecasting where the sports and entertainment industry might be heading in the next few decades, my personal view is that venue diversity and flexibility will become a critical tool teams can use to deliver diverse and context-appropriate experiences to fans.

Team Valiant with the Stanley Cup [Los Angeles Valiant]

Team Valiant with the Stanley Cup

My answer to this question could honestly be its own interview – I’m passionate about it!  Without going into too much detail, I guess I’d say this:  anyone who thinks you can flip a switch and build a fan base has probably never sold a ticket in his or her life.  Do teams from time to time catch lightning in a bottle?  Absolutely.  Often, by the way, what appears to be lightning in a bottle is really the result of very sophisticated strategic planning and execution by a world class management team (the Vegas Golden Knights and Seattle Sounders are two recent, great examples).  In any case, we’re very intentionally building relationships with people and communities now that we believe will ultimately be portable into a ticket-buying fan base.  We’re thinking right now about full season ticket packages, mini plans, group tickets, and single game buyers.  Ask anyone who has ever been responsible for a ticket sales budget – you’d like to figure out how to reach your targets based on season tickets and group sales and not be reliant on single game buyers.

John Wooden once said something that I find can be applied to almost everything:  “the trouble with new books is they keep you from reading the old ones.”  The truth is doing the right thing is really always good business.  Our “Be Valiant” campaign is a manifestation of that, I think.  It’s true that “Be Valiant” is all about identifying, celebrating, and embracing underserved and underrepresented groups and communities in gaming, and talking directly to those groups by hosting and programming custom-tailored events.  The communities we’re working with currently through “Be Valiant” include kids and families (our “Community Block Party”), women and girls (our “Girls in Gaming Summit), fan artists (our “Valiant Fan Art Showcase”), and members of the LQBTQA community (“LA Valiant Pride”).  These are great events, generating tremendous traction, and having a real impact.  At the same time, we believe that by embracing these communities and being the team and brand of choice for these communities, our future home games and other live events will be sought after gathering spaces and viable entertainment options for these communities.

Earlier this month you announced Immortals’ mobile decision. What was the draw to make that decision and is it all competitive mobile titles or just a select few? Do you also feel that mobile is the next big step for esports to make?

Mobile gaming is a participatory phenomenon unlike almost anything the world has ever seen. ~90% of the developed world has a mobile phone or device, and therefore basically the entire world now carries the equivalent of a basketball court with 9 other players, an 18-hole golf course with a foursome ready to tee off, a perfectly Zamboni’d sheet of ice, etc.  In other words, the entire world can play any time, any place, anywhere.  This low access bar has a really exciting democratizing function, and so, among other exciting elements of mobile gaming, we’re particularly interested in the significantly more equitable male/female split among mobile gamers.

We’re currently in Arena of Valor and Clash Royale, but certainly evaluating the landscape.  AoV and Clash are complementary in the sense that we see AoV as a participatory phenomenon and Clash as a content-driven phenomenon.  Folks are playing AoV and consuming Clash content at just alarming rates.  And, we have deep institutional relationships with the game publishers of both of these games.  We’re excited to be partnering with those publishers (Tencent and Supercell) to help build the esports ecosystems for these amazing games in North America.

Lastly, where do you hope to see esports and league systems, either franchising or otherwise in the next 5-10 years?

Is it a cop out to say I hope we let the community sort it out?  There’s such pressure to make “esports” one thing, but that’s just so inaccurate, such an oversimplification.  We talk about the NFL or NHL or MLS and compare those things to “esports,” and everyone that’s part of this community realizes how ridiculous that is.  The fans of CS:GO are not necessarily the fans of Clash Royale; they are likely different ages, from different countries, playing games on different devices, consuming different types of content, following a different competitive scene, etc.  They’re lumped together for one reason:  because both are digitally native sports.  Anyone who follows more than one traditional sports should realize how absurd it is to lump two sports together purely and exclusively because both are non-digitally native.  Do we think of UFC and baseball and cricket and tennis and football and soccer as all one thing?  Of course not.

In terms of league structure, personally, I love that traditional sports have diverse structures that differ among various sports.  For example, take the NHL, EPL, and PGA Tour.  The NHL is a closed system – the only way in is to acquire an existing team, or for the league to expand.  The same 31 teams play in the NHL every year.  In the EPL, there’s a promotion and relegation system.  Teams can earn their way into the EPL, or essentially forfeit their status and position through poor performance.  In other words, there’s fluidity in the system.  Finally, in golf, there’s essentially an open system.  Anyone can, in theory, qualify for the US Open or get into “Q-School,” and earn his or her way onto the PGA or LPGA tour.  There’s not even any franchise value as the “franchises” are individuals who have no residual value as competitors after they retire.  Three completely different models, all successful.  I hope to see that same structural diversity in esports.

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