The University of Utah turned heads in 2017 when it announced it would offer esports scholarships. That move was just the beginning. Two years later, the U is committed to being a pioneer in the field and moving its esports program—which finished runner-up in Overwatch at the 2019 National Esports Championships in Houston—to the athletics department, thus making it an official athletics team.
While collegiate sports are vital to any college's brand, it might be surprising that esports—online video game competitions for spectators—are now being considered for varsity status. Collegiate esports have seasons and playoffs, just like basketball; regular season matches are played online, which means there is no need for teams to travel. Teams do travel later in the season, when there are higher-stakes tournaments—complete with live spectators and commentators—which are streamed on Twitch.
In 2017, when the U approved the club lacrosse team for Division I status, then-athletics director Chris Hill said in a news release the main factors for the decision were the "potential impact on our other teams, financial self-sustainability, compliance with Title IX and popularity in our community." As esports teams begin lobbying for varsity status, that same criteria applies.
One of the challenges facing esports, according to the U's esports director, A.J. Dimick, is that the overall organization of each school's program is unique because many such programs started with student grassroots movements. Those origins then defined how a program was treated and funded. Some are housed in an academics department, with a focus on creating tools around esports and offering majors related to video-game production. Others, like at Wisconsin's Marquette University, are housed in athletics departments, with a focus on creating winning teams that generate revenue for the school.
Meanwhile, the esports industry is booming. According to a 2019 report by game analytics provider Newzoo, revenue for 2019 is expected to reach $1.1 billion, and the estimated value in 2022 will be near $1.8 billion. "[Esports] is on its way ... it's just a matter of time before this mainstreams itself," Dimick says. The challenge in bringing collegiate esports to a national level is unifying school programs in how they organize and compete. "We need our peers to do the same things that we are doing," Dimick says.
There's also tremendous potential for college esports to succeed on a national level if they can capitalize on school brands and geographic rivalries. According to Dimick, the two main reasons people engage with sporting events are the competitive spectacle of the event and tribalism, where fan groups form around teams.
"Professional esports have emerged organically without [tribalism] being prevalent," Dimick says, while college esports has a much better chance at using rivalries to develop a fanbase, because there is already a strong sense of tribalism sown into collegiate sports.
In order to become part of the athletics department, however, a revenue model for collegiate esports needs to be established.
Currently, all funding for Utah esports programs comes from the university, Dimick says, which doesn't match up with how a proposed Division I team needs to be funded.
For example, the U's lacrosse team secured a $15.6 million endowment that didn't use any state or university funds prior to its promotion. "Nowadays, adding sports at the college level almost always requires an endowment," Hill said in the 2017 announcement.
Utah esports are funded in a completely different way from athletics, so for the team to transition to the athletics department, a different funding model needs to be put in place. The U's esports team includes 34 athletes on scholarship, seven coaches and four highly competitive teams that travel to play in postseason events—so it's not cheap. Dimick adds that costs for facility coordination, marketing, event services and compliance in order to maintain competitive integrity also require funding. Dimick says the school's esports program doesn't take in money through ways a traditional team would, such as donations from boosters.
The primary obstacle to creating a revenue model is the absence of an organizational standard in esports, which could provide easier access to revenue streams such as media rights. "If we can organize ... I think that dramatically heightens the potential of what we can do together rather than apart," Dimick says.