LaLiga nets esports deal as Spain’s football league heads Mena’s way

Reuters/Susana Vera

• LaLiga’s venture with Dubai-based Galaxy Racer targets young market
• Deal to create projects for lifestyle and music as well as football
• Global esports market forecast to reach $1.87 billion in 2025

Spain’s main football league, LaLiga, has signed a 15-year deal with Galaxy Racer, one of the world’s largest largest esports, gaming and lifestyle organisations, that they estimate will generate more than $3.16 billion.

The home of Barcelona and Real Madrid say they expect the tie-up with the Dubai-based company to transform the league’s presence in the Middle East and North Africa (Mena).

It also gives them broadcast and media rights in Mena and Indian subcontinent markets, which should boost viewership of LaLiga matches in the 29 countries.

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Maite Ventura, LaLiga’s managing director for Mena, said the deal with Galaxy Racer is vital as there are 1.3 billion people under the age of 30 in her region and India combined.

“It [Mena] is one of the main territories in our international strategy,” she told AGBI. 

“It’s a very young population and we need to be targeting [them]. We need to be close to our youngest fans.

“It’s not only football projects. We will be creating projects across lifestyle and music. We want to be commercially present in every area our fans love. For example, if our fans engage in crypto or NFTs it’s something we would like to study.”

The venture, which has each party holding a 50 percent stake, comes as Qatar hosts the first Fifa World Cup to be held in the Arab world, with more than five billion people projected to watch the tournament.

Fifa said last month it has earned $7.5 billion in the four years of commercial deals tied to the 2022 tournament, which is $1 billion more than for the 2018 World Cup in Russia.

The digital arena also has vast commercial potential. The overall market cap for fan coins – a type of cryptocurrency that offers membership benefits – jumped to $401 million on the opening weekend of the World Cup, from $256 million about 10 days earlier, according to data from CoinGecko. It has since fallen back below $300 million.

Average daily trading volumes for tokens linked to sports teams like Barcelona or Brazil have risen to around $300 million in November, from $32 million the month before, according to Kaiko, a Paris-based crypto data firm.

“I believe that touching the hearts of youth and empowering them to experience the unifying force of football is key to our success,” Oscar Mayo, LaLiga executive director, said at a press conference in Dubai on Thursday.

“Today football has an incredibly old audience,” Paul Roy, Galaxy Racer founder and chairman, said. 

“The audience that watches is over 35 years old. We are looking at the new generation. The main target audience is Gen Z and millennials, and we know that they don’t look at billboards, they don’t watch TV, and they don’t listen to radio ads. 

“What we know is that they are consuming content from outlets that are digital, which includes games, YouTube and [other] platforms.

“So, the projects we are planning revolve around gaming, content creators, YouTubers, esports and the creation of content around web shows and series that are digitally native.” 

In 2022, the global esports market was valued at just over $1.38 billion and the revenue was forecast to grow to as much as $1.87 billion in 2025, according to Statista.

Roy added: “If you want to capture an audience of young kids, you want to post around football. There is lot of commercialisation that’s going to happen beyond the sale of TV rights.

“If we do our job right in the next 12 months, and we create that high awareness in the region, then the commercialisation opportunity that we have next year – whether it’s the broadcast rights or the sponsorship package we were selling at X price, is going to sale at X times a certain number.

“What we are going to do is to become a case study for leagues around the world who want to tap into the Gen Z audience.” 

Meanwhile, LaLiga and Galaxy are also working on a new consumer product line that is “going to be a massive surprise to everybody”, says Roy, and unlike the usual “memorabilia” collections.

“Look at what [Michael] Jordan did to Nike – this is what we are looking to do with LaLiga,” he explained. “Today the Air Jordan brand lives beyond Michael Jordan and Nike. That’s the direction and thinking.”

Football’s new moves off the pitch could also help drive up team valuations and investment, Roy says.

“You have to compete completely off-field too,” he said. “Middle Eastern investors are incredibly strong. The evaluation for a team acquisition is an across the board type of evaluation from every single aspect.

“Football teams now are as expensive as NFL and NBA teams, in the billions of dollars, and I do believe the valuations are going to grow based on these other aspects.”

Ventura said LaLiga’s international expansion has been showing positive returns. “Since 2017 we are very focused on making all the clubs grow, not only in this region but also internationally,” she said.

“Everything we do is related to make all the clubs bigger and stronger. We have seen the results since we kicked off our international strategy.

“We are really happy because we have increased our audience, grown our commercial sponsorships, the value of the TV rights, the value of our presence – so definitely we are going the right way.”

LaLiga, which has its regional headquarters in Dubai, has 11 representatives across the region, including in Qatar and Saudi Arabia. However, Ventura said the league has no current plans to open an office in the other Gulf states. 

“I think there is a bright future because football is the number one sport in the region,” she said. 

“But I also think the whole region has a bright future in terms of sports. It’s not only the World Cup in Qatar – it’s Formula One, NBA and a lot of international events taking place here.

“Being the first World Cup taking place in an Arab country, you can feel the pride not only in Qatar but also in the UAE, Egypt, Morocco and all over.”