Lori Burgess, the chief operating officer at the company that that owns the Houston Outlaws franchise of Activision Blizzard’s Overwatch videogame league (OWL), will be the first to admit she is a “terrible” video game player.
Burgess, whose 20-plus years in publishing has included work for magazines and publishers such as The Hollywood Reporter, Conde Naste, Elle (owned by Chronicle parent Hearst Corp.), Mademoiselle and Seventeen, joined Beasley Broadcast Group in 2017 and was tasked with broadening the publicly traded radio-station owner’s digital presence. The Naples, Fla.-based company owns 61 radio stations and generated $241.4 million in revenue in 2021.
With expertise in analyzing trends within the 13- to 34-year-old demographic, Burgess pushed for more video-streaming opportunities, and the company responded by creating an electronic-sports division. In late 2019, the division acquired the Outlaws, whose players are among the world’s best at Overwatch, a first-person shooting videogame.
Burgess was promoted to the newly created position of Beasley Esports’ COO in early 2020, and the unit has since expanded with the acquisition of Team AXLE, which competes in Psyonix’s North American Rocket League Championship Series, which pits drivers of virtual rocket-powered cars that play soccer matches against each other.
Based in The Woodlands, Beasley Esports employs about 36 people, including its teams’ full-time coaches and players. Since 2020, the Outlaws, which has seven players, improved from No. 17 to No. 3 in the 20-team Overwatch League, whose 39-match season ran from May to November.
The Outlaws, which has about 2.4 million followers on platforms such as Twitch, Twitter, Instagram and YouTube, and have drawn as many as 375,000 viewers across social-media platforms such as YouTube and Twitch for matches, also ranked No. 2 ranking in merchandise sales and No. 2 in viewership.
Q: How did you go from fashion publishing to running electronic sports teams?
A: I knew nothing about esports, but I always loved the younger market. You think about somebody from 12 to 30 and all the rites of passage as they’re becoming good at something. Growing up is so cool. The idea of working with those born after 1980 — Gen Y and Gen Z — was a great opportunity. It’s fascinating to watch this younger generation develop their own sense of communication.
I was brought into Beasley as a consultant, and one of the goals was to identify company assets that weren’t fully explored. We needed to start diversifying entertainment experiences for next-generation consumers, so we started looking at other types of industries. For Gen Y and Gen Z, esports was really an opportunity to get our foot in the door with the younger generation.
Q: What are your revenue streams?
A: Contrary to what everyone thinks, the No. 1 area is ad sales and our ability to sell local sponsorships. Our largest sponsor for both teams is H-E-B, and we’ve also got Wingstop. In addition to that, the Overwatch League sells national sponsorships. Ticket sales [to on-site events] are secondary drivers. Then there’s merchandise sales. Last but not least is revenue sharing.
All of the OWL teams receive a portion of the revenue generated from league-wide sponsorship revenues generated and/or media rights from the broadcasts on YouTube. The Overwatch League is working on creating more revenue opportunities to help teams increase our revenue as the teams strive to achieve profitability.
Q: How much of a challenge is it for you to reach your audience?
A: Right now, statistics say the No. 1 method of entertainment for Gen Y and Gen Z is videogaming. It’s not television, film or music personalities. It’s video gamers and streamers. Brands are starting to wake up and court the younger consumer.
Q: How much advertising revenue do you generate?
A: We generate a little over $1 million in ad sales. It’s one of the more difficult challenges. When we call on a potential sponsor, we have to educate them. We do have revenue coming in from the league. So this year, we’ll be close to a break-even scenario. Our total team-generated revenue this past year was closer to $1.4 million —coming from sponsorship sales, OWL prize monies, Battle for Texas Event ticket sales, merchandise sales and content revenue from our YouTube, Twitter and Twitch channels.
Q: Are you working with other Houston sports teams?
A: We’re really trying to integrate ourselves into the greater Houston sports community. We’ve had a couple discussions with the Rockets. We did a really cool promo when the city was trying to win a World Cup bid. We haven’t met with the Astros, but we have met with the Dynamo and Dash. The challenge is that, when our players are in season, they’re practicing six days a week and can’t break training, and over 75 percent of the players are Korean, because it’s such a specialized and sophisticated game. So it doesn’t allow for as much cross-pollination as you’d expect.
Q: Are there any challenges particular to being an esports team in Houston?
A: Given the sports tradition in Houston, we had to have a winning team. So we’ve got one of the biggest fan bases in esports. Houston, San Antonio and Austin fans are massive, and when we did an opening event in San Antonio, we had 1,600 people show up.
Q: Where do all these fans come from?
A: Esports is huge in Texas. There are more kids playing esports at the high school level in Texas than any other state. [Esports platform] Vanta has solidified partnerships with the Texas University Interscholastic League, the largest inter-school organization of its kind in the world, which provides extracurricular academic, athletic and recreational activities to schools statewide in Texas. Esports in Texas is very much a fixture in literally thousands of schools across the state now, which is a larger footprint than any other state in the U.S.
Q: How many players are on the Outlaws?
A: Last season, we had seven, and for 2023 we’ll have six. They train in our offices in The Woodlands. During the season, they’ll train from 10:30 in the morning until 10:00 at night.
The best players in the world are coming from South Korea, and they’re all bilingual. The minimum player salary for Overwatch is close to $55,000 a year, and we’ve got players making well over $200,000.
Q: How are they compensated, do they get endorsements like other pro athletes?
A: We compensate the players with salaries, a percentage of prize monies and we do everything possible to handle as many of the player needs as possible so they are able to live and breathe Overwatch. We arrange to have food delivered to the players for two meals a day. We also handle all arrangements for the housing and cover the bulk of those costs, as well. We also handle all arrangements and costs associated with acquiring their visas and travel.
Q: What challenges come with managing a team of 18-22-year-old gamers away from their South Korea home?
A: We feel enormous responsibility for our players. These are young adults, freshly out of high-school that have spent many years of their lives training for this elite level opportunity. We fill the void as parents, coaches and mentors while they are with us.
Since owning the team, we have encountered the challenges of having a mixed team of Western and Eastern players. Our first two seasons of ownership in 2020 and 2021 were teams comprised of mixed rosters, and we determined that that was not ideal, given the language and cultural barriers that exist. With this game largely revolving around the coordination of the players communicating extremely well with one another to make split-second decisions, we did not feel that was the best structure.
In 2022 we upped our game, but it came with new challenges as our six-person roster was five Koreans and one American. All were outstanding players but the language barrier made it challenging at times for the team to coordinate on strategy and tactics, especially in-game. Last year was wild in that our head coach spoke English and Korean, and our assistant coach was very conversant as well. We ended up hiring a player operations manager to serve as a mental health coach, mentor and ”older brother” to our players and to speak in Korean with the players and English with us so that we could mitigate challenges together.
Q: How long do players tend to stay with an Overwatch team?
A: We’re an organization that doesn’t believe in multiyear contracts, given what it takes to maintain your status. But we take care of everything for them – all they do is play, play, play. You can’t do that as an NFL or NHL player because your body couldn’t handle it. This is a completely different sport.
We have one returning player, and we’re bringing back a player we had two years ago. There are always younger people coming in. This sport is very young – most players are between 18 and 22, and it’s hard to maintain their position with the younger generation playing videogames from when they were 3 or 4 years old. Our first year, we inherited a team that had players going on their third year, and they get cushy. There’s a tension in bringing in enough talent to be good enough to win big. What’s the point of having a team if it’s mediocre?
Q: How will last October’s release of Overwatch 2 change the team and the league?
A: The entire league’s rosters turned upside down. It took a long time for Overwatch 2 to come out, and we really did get a different game. It went from being a six-person game to a five-person game, so the game-mapping and strategies change. That’s what’s going to make it very exciting for the fan base.
