Guild Esports plc (LON:GILD) is the topic of conversation when Zeus Capital’s Technology Analyst Bob Liao caught up with DirectorsTalk for an exclusive interview.
Q1: Guild Esports, the esports team and brand backed by David Beckham, IPO’d earlier in October on the LSE market. Bob, can you give us a feel for the size and the potential of the esports market?
A1: Esports seems to be the market phenomena that we’ve never heard of. Esports is already hugely popular and, at least, rivals traditional sports in terms of dealership, tournament winnings and followers so esports is projected to have more US viewers than major league baseball, national basketball league and the national hockey league in the United States. The prize money for some of these esports tournaments, they exceed the prize money of many of the top physical sports such as golf, tennis, and cycling.
So, really the popularity and interest is very very high and you see, particularly amongst the younger generation, that leading esports teams have many more followers than the top physical sports out there.
It’s a real phenomenon which Guild very much plans to take advantage of.
Q2: Where are all these viewers or followers coming from? Is it US-based or is it here in the UK too?
A2: They’re all around the world but mostly in Europe and the US for the Europe and US team and then for the Asian teams, they have followers coming out of that region.
The objective is for the company to become a global team but based in the UK.
Q3: Can you give us an overview of the company’s plans for the medium term?
A3: The company plans on becoming the leading esports brand in the UK with David Beckham as the face of the team. They plan to pioneer the UK Premier League academy model into esports and hopes to attract some leading sponsors, build a loyal fanbase and establish a premium line of merchandise.
So, within 12 months of IPO, the company plans to generate about £5 million of sponsorship revenue, £1 million of merchandise revenue and over £0.5 million of media revenue so it’s got ambitious plans that it only plans to build on over the second and third years as well.
Q4: I saw that Guild Esports had already announced a large sponsorship deal, can you give us an update of its operations there?
A4: So, on 20th October, the company announced a £3.6 million three-year sponsorship deal with a European fintech company. The agreement enables the company to promote its brand and logo through placement of the company’s team jerseys, through the streaming of gameplay that they will do and through other marketing initiatives.
We think the demographic profile of esports fans should readily attract more sponsors and advertisers. The average esports fan is aged 32, 46% of them college educated and they’ve got very high income, high above the median in the United States.
So, in terms of operations, they have already signed the world’s best players so they’ve signed the world’s second best Xbox FIFA player, they’ve signed a Rocket League champion and also a world championship manager and coach for Rocket League as well. Now, with the funding from the IPO, the company plans to continue building out these teams, particularly for Fortnite which is, of course, very popular and well-known amongst many listeners and they’re also planning to build out a counter-strike team as well.
The company appears to be off to a very strong start.
