how esports can save colleges

Several months prior, I published an article concerning esports and the Olympic Games, following participation in a discussion panel regarding the possibility of collaboration between esports and the International Olympic Committee due to the circumstances created by the coronavirus pandemic. Following thorough analysis and investigation, my primary finding was that the Olympic Games could benefit significantly more from incorporating esports than esports would from Olympic inclusion.

During my research for the article on the Olympics, I was taken aback by certain data I discovered relating to viewership figures for international, professional, and university-level sports. My observations indicated that, despite being a less established model than traditional sports, esports achieved comparable viewership numbers, with its audience experiencing substantial growth. This led me to contemplate how long it would take for organizations that could potentially gain the most from this trend to recognize it.

This brings us to the increasing interest in esports from colleges and universities: Currently, over 170 varsity gaming programs exist within NCAA Division I institutions, and the number of esports clubs is even greater. Despite this growing investment by these institutions, numerous facets of the potential for generating value – and even income – within the collegiate esports environment remain poorly understood and underestimated.

College in the 21st Century

The contemporary college experience differs considerably from that of 50 years ago. The rate of change in the world beyond academic institutions is continually increasing, frequently challenging colleges to adapt. Developments in technology, student preferences, the evolving economic landscape and job market, and shifts in societal values have positioned colleges and universities with diminished relevance in many respects.

A similar trend is observable in college athletics: External factors have diminished what was once a dominant source of collegiate pride, cultural influence, student recruitment, alumni participation, and, in certain instances, financial income.

I examined the viewership numbers for the most prominent NCAA competitions, specifically the Football Bowl Subdivision Bowl Championship and the NCAA Men’s Division I Basketball Tournament.

Consider the average viewership of the major bowl games both before and after the implementation of the championship system in 2015. The image above illustrates the viewership trends for various significant bowl games, along with an overall average. While occasional increases occur, the most favorable interpretation of the data suggests the viewership numbers have remained stable—and when analyzing the trend lines for both periods, the following result is observed:

Overall, the trend appears to be generally declining.

Now, let’s examine similar viewership trends for the NCAA Final Four—the early and late semi-final games, and ultimately the championship game.

The patterns are quite comparable. While collegiate sports continue to attract a substantial audience, two issues are cause for concern. First, the audience is not expanding; in fact, it seems to be slightly shrinking. Second, the audience is becoming older, making collegiate sports less appealing to younger generations. Although an older audience remains a valuable source of alumni contributions and supplementary revenue, it doesn’t align well with another key target group: prospective college students.

Despite these trends, data indicates that institutions with highly-regarded academic programs benefit from what is known as the “Flutie effect,” named after Doug Flutie, a Boston College quarterback whose impressive performance on the football field was credited with increasing BC’s application numbers. A Forbes article detailing a Harvard Business School study explores this phenomenon in greater depth.

While much of this data is from a few years ago, when college sports may have been more prominent, the underlying principle remains the same: Having a successful program in an activity that students enjoy is advantageous for the institutions that support and promote it. However, what happens when student interest in those activities diminishes? One potential solution is to explore engagement with activities that today’s students find appealing.

For comparison, consider that FBS football reaches a maximum of 35 million viewers and the NCAA Final Four peaks at 28 million. Riot Games’ Mid-Season Invitational event for League of Legends, however, attracted a total viewership of 60 million people. The Intel Extreme Masters tournament in Katowice followed with 46 million viewers. While precise demographic information is not easily accessible, it is reasonable to assume that the latter two events appeal to a younger demographic than the former two.

It’s important to note a few qualifications, as these are not perfectly equivalent comparisons: These esports events are spread over several days and include numerous matches—similar to March Madness—and the content is consumed differently. A significant portion of the NCAA’s content is broadcast on television, some of which is on paid, premium channels. Esports events are streamed live on Twitch and YouTube for free.

However, it’s crucial to recognize that esports audiences are expanding at a rate of 15%-16% annually and have a global reach, meaning its total potential market is considerably larger. The NCAA events are unlikely to attract significant audiences outside of North America.

COVID-19

The ongoing pandemic has presented significant challenges for traditional colleges and universities, largely due to students being unable to participate in the on-campus experience that is central to higher education. The benefits of attending college often include building professional connections, forming friendships, and gaining new experiences – aspects that are considerably diminished when learning remotely from home. Furthermore, conventional college athletics have been largely suspended, impacting institutional spirit, promotional opportunities, and financial income. The NCAA basketball tournament, a major event, was cancelled in March 2020, and its return, along with the resumption of other sports, remains uncertain.

Conversely, esports are experiencing growth during this period, primarily because of their capacity to facilitate remote competition and viewership. Esports events can effectively separate participants, including players, spectators, and officials, enabling the safe production and enjoyment of content.

Esports and college

Surprisingly, esports may be a more suitable environment than professional competition. While a detailed explanation is beyond the scope of this discussion, I have previously published a separate article outlining why the conventional professional sports framework isn't well-suited for esports. That article examines issues of intellectual property, league ownership within esports, and the revenue streams for all involved parties. A key challenge lies in the fact that, in traditional professional sports, the teams control the league and can prioritize the collective interests of all teams. Conversely, in esports, the video game publisher typically owns or regulates the league, resulting in a different dynamic regarding revenue distribution that isn't present in professional sports.

Interestingly, collegiate athletics faces a similar issue and has developed a method to address it. Student-athletes receive scholarships, while the educational institutions, their athletic conferences, and the NCAA all share in the revenue generated and then distributed through networks like ESPN and Fox Sports.

This structure provides a more effective model for esports. It's improbable that an organization possessing the intellectual property rights to a sport like football would dictate the marketing strategies, revenue shares, and distribution methods to a team such as the Dallas Cowboys. However, this type of negotiation is commonplace in college athletics. In reality, to ensure everyone benefits, it’s essential to establish an agreement where the schools receive income (analogous to a team), the conference earns revenue (similar to a league), and the NCAA profits as well (comparable to the publisher). If this system falters at any point, the entire process is disrupted, and no one benefits financially.

As I discussed in my article concerning the Olympics, the International Olympic Committee (IOC) is accustomed to complete control over aspects like broadcasting rights, event selection, and athlete eligibility. This level of authority would be unlikely to continue if esports were incorporated into the Olympics. The game publisher would undoubtedly exert significant influence over the presentation, broadcasting, judging, and other facets of the competition. The IOC is not accustomed to such a dynamic, but it is a typical scenario in college athletics.

College enrollment numbers are declining, and this trend began before the COVID-19 pandemic. Even prior to the pandemic, colleges were working to adapt to changing student perspectives and a reevaluation of the college experience. Forbes reported in 2019 that college enrollments had decreased by two million students over the preceding decade. Coupled with initial data regarding the impact of COVID-19 on colleges, enrollment in 2020 could potentially fall between 5% and 20%.

The outlook

The situation facing institutions of higher education is challenging. Financial resources have significantly decreased, with even well-established universities such as Harvard University experiencing substantial losses. Prior to the pandemic, student enrollment was already declining, leading to a critical juncture where colleges and universities must evolve to ensure their continued existence.

Fortunately, I contend that competitive gaming, or esports, presents a potential avenue for revitalization. Numerous colleges are now investing in esports initiatives, with 115 distinct programs currently providing financial aid through esports scholarships, and the growth of esports clubs is occurring at an even more rapid pace. While this will undoubtedly assist in student recruitment, generating income from esports can be quite complex.

It is essential that colleges and universities seek guidance from experienced professionals to develop a sustainable system that appropriately rewards all involved parties, including the institutions themselves. Furthermore, universities must act decisively and embrace a framework that is still under development. While the coronavirus pandemic is likely to persist, I anticipate that many colleges will not. The optimal time for action is presently.