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G2 Esports Brings On Billionaire Joseph Tsai As An Owner And Plans To Take Over New York

Christina Settimi
G2 Esports Brings On Billionaire Joseph Tsai As An Owner And Plans To Take Over New York

Image Credit: pxhere

G2 Esports announced today that billionaire Joseph Tsai, an Alibaba cofounder and the owner of the Brooklyn Nets, had made a $10 million investment in the company to become a minority owner. G2 also said it would open a New York office shortly after the new year.

G2 is one of the most recognizable e-sports organizations in the world, in part because of its popular CEO and co-owner, Carlos “Ocelote” Rodriguez, who founded the company after a successful competitive career in Riot’s League of Legends. Besides having 43 athletes signed to play in games including Fortnite, CS:GO, PUBG and Rocket League, Rodriguez owns the reigning champion and six-time title-winning franchise in Riot’s LOL European Championship. Last month, the team lost to China-based FunPlus Phoenix at the LOL Worlds tournament, played in Paris in front of a crowd of 15,000 and watched by 4 million worldwide.

In February, G2 raised $17.3 million from New York City-based investment groups including Everblue Management, Parkwood Corp. and Seal Rock Partners to expand its content and grow internationally. Forbes recently valued the company at $165 million, a 57% increase from last year, making it the No. 9 e-sports company in the world. Of the $22 million in revenue it generated this year, half came from sponsorships, including multiyear deals with longtime partner Red Bull and Domino’s. But as noted by one industry insider who requested anonymity, the location of G2’s headquarters in Berlin has limited its ability to attract the big sponsorships offered to companies with U.S.-based operations.

Not for much longer. Jens Hilgers, one of G2’s founding owners and Rodriguez’s mentor, told Forbes that the focus out of the New York office will be to increase the company’s talent pool and increase its commercial activities with U.S.-based brands.

“New York is an underleveraged and under-represented market in e-sports, which is odd because it in particular is where so many impactful subcultures have been born in the U.S.,” he said. “This is an opportunity for G2 to capitalize on playing to the East Coast.”

Currently, only two top-tier e-sports organizations have a presence in New York City, and they are owned by two infamously mismanaged groups: Counter Logic Gaming, which is owned by Madison Square Garden and has an LCS franchise, and Andbox, a newcomer that is owned by New York Mets principal owner Sterling Equities and owns the NY Excelsior of the Overwatch League and the NY Subliners of the upcoming Call of Duty League. G2 has nearly twice the followers on Twitter, Instagram and YouTube of the two companies combined.

“New York screams G2,” Rodriguez says, with a hint of disregard for the distinction between the company and himself, the Spanish-born Forbes 30 Under 30 alum, married to a French woman and living in Germany, with a recently self-taught but expert command of English.

Tsai’s ownership should also help G2 expand its reach in China. The company recently established social media channels there and is now looking to grow its audience. The Taiwanese-born Tsai, the vice chairman of the Chinese e-commerce giant Alibaba and its second-largest shareholder after fellow cofounder Jack Ma, can provide guidance on how to read the culture and set a tone that is right for that market.

Tsai’s net worth is estimated by Forbes at $10.8 billion, making him the eighth-richest sports team owner in the world and the second wealthiest in the NBA, after Steve Ballmer. With this investment, he follows fellow billionaire sports team owners Robert Kraft and Stan Kroenke of the NFL and Mark Cuban, Dan Gilbert and Michael Jordan of the NBA into the world of e-sports, where global revenue will reach $1.1 billion this year, up 27% from 2018. North America accounts for 40% of that pie, followed by China at 20%.

Tsai, a former Yale College lacrosse player, made his first foray into sports ownership in 2007 when he bought the rights to an expansion National Lacrosse League team that would become the San Diego Seals. He is also part of the ownership group of Major League Soccer’s Los Angeles FC, most recently valued by Forbes at $475 million, and he acquired the WNBA’s New York Liberty from the New York Knicks’ ownership group in January.

Tsai’s investment in G2 is significantly smaller than his record $3.3 billion acquisition of the Brooklyn Nets but meaningful enough to allow him to test the e-sports market, and how well the asset fits in his sports holding portfolio. Cross-promotional events between the Nets and G2 figure to come into the picture soon.

It also stands to reason, based on his control of the other sports properties, that Tsai will want to expand his stake in G2 at some point. The founders contend that they are in G2 for the long haul but like the idea.

The first order of business for G2, though, says the 29-year-old Rodriguez, is “world domination.”

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