Epic Games Asking $25 Million for Fortnite World Cup Sponsorships, a New Industry Record
Chris Pursell (Cynopsis Media) has reported that Epic Games is seeking “up to $25 million for partnerships for Fortnite World Cup, obviously a new record for the (e-sports) industry”; title sponsorships and “regular spots within the event” are among the opportunities available to brands. The Fortnite World Cup, which will have players competing for their share of a $100 million prize pool, will begin in late ’19; qualifying tournaments, open to the public (i.e. you do not need to be a professional gamer) are scheduled to start in early ‘19. Back in June, it was estimated that 125 million people worldwide play the battle royale game.
Howie Long-Short: Some are comparing the cost of a Fortnite sponsorship to a 30 second Super Bowl LII spot ($5 million), but a better comparison would be the $30 million that Formula One asks for a circuit sponsorship; F1 claims to have 500 million fans worldwide. Of course, just because Formula One is asking for $30 million, doesn’t mean it’s getting it (though F1 did recently sign a $100 million deal with Interregional Sports Group); in fact, the racing circuit grew sponsorship dollars less last year (+$11 million) than any time in the past decade; reporting just $273 million in sponsorship revenue.
Back in early August, Liberty Media reported rising costs (+$27 million) and declining revenues (-$31 million to $585 million) caused F1 operating income to decline a staggering -69% (to just $14 million) in Q2 ‘18. The company intends on reporting Q3 financials on November 8th. FWONK shares will open at $33.86 on Monday 10.22.18.
Riot Games is owned by Tencent (TCEHY). Company shares are down -22.5% (to $35.72) since China’s Ministry of Education recommended a restriction on the number of new video games, proposed a limit internet usage and said it would explore an age-appropriate rating system for players, back in late August; the Ministry blames video games and internet usage for the increase in reported cases of myopia amongst minors. Operating amidst heightened regulatory risk in Q2 ‘18, TCEHY reported a decrease in profits for the first time in 10+ years. The company will report Q3 earnings on November 14th.
Fan Marino: Elon Musk created a stir on Twitter (take a drink) Friday, by posting a screenshot of a MarketWatch story appearing to indicate he had purchased and subsequently deleted Fortnite (a move that would prevent others from playing). While Musk’s use of Photoshop was good enough to could convince readers that the story was true, inclusion of the quote “I had to save these kids from eternal virginity” gave away the prank (though it made me chuckle). It’s unclear if the joke violated newly issued guidelines (set by the Tesla board) for Musk’s social media use.
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