Why LA-Based Esports Outfit NRG is Partnering With Madison Square Garden

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Why LA-Based Esports Outfit NRG is Partnering With Madison Square Garden

After a nearly-unprecedented boom during the pandemic, esports is weathering a downturn.

FaZe Clan, the Los Angeles-based gaming and hype squad once thought to be an industry leader, has been warned of a stock delisting and could be facing bankruptcy. 100 Thieves, an esports organization based in Culver City, laid off 30 people in January. And Playa Vista-based esports team owner Team SoloMid (which recently terminated a $210 million, decade-long naming rights deal with now-defunct exchange FTX) announced this month it’d pause competition in several esports, despite claiming it’s profitable.

The main problem that esports organizations face is that, even if they have millions of fans worldwide, it’s difficult to translate that interest into tangible cash. It takes a hefty chunk of change to launch an esports outfit, and taking on debt without a stable revenue stream as some local companies have done, is a dangerous tightrope to walk.

But NRG, a Los Angeles-based esports team owner founded in 2016 by basketball legend Shaquille O’Neal and CEO Andy Miller, aims to turn that tide and hopes a deal with a legacy sports name will help. NRG recently announced it would buy some assets of CounterLogic Gaming, an esports outfit previously owned by Madison Square Garden Sports Corp.

The newly-combined outfit will be led by NRG, which also competes in several esports including “Apex Legends,” “Rocket League” and Activision Blizzard’s “Overwatch.”

The real reason NRG bought CounterLogic was for its spot in Riot Games’ “League of Legends” Championship Series tournament, Miller told dot.LA. NRG’s team already played in another popular Riot esport, “Valorant,” but was eager to snatch up another team because Riot’s content is hot right now, and that gives NRG a chance to stand out and gain new fans.

Miller said esports has “incredible engagement,” that is “rarely seen” in professional sports, especially among younger fans. He noted that NRG’s business model consists of both playing pro esports but also creating content – and said that its gaming lifestyle content garnered around 2 billion global views last year.

“[When] we had the opportunity to do that for League of Legends, we jumped at it because League’s gotten somewhat antiseptic… the teams are kind of similar, and there’s a lot of legacy brands and we wanted to bring in something new and fresh, and bring in some new fans who’ve never even opened a game up before.”

Miller clarified that NRG now owns “everything associated with ‘League of Legends’” under CLG that Madison Square Garden Sports once owned, including their team coaches, analysts, academy team, scouts and facility in Culver City. “It will be part of the NRG brand,” Miller said.

When asked about the current tumult in the esports industry, Miller said, “It's a tough space because it's a new space.” That said, at seven years old NRG has mostly aged out of startup status. Still, Miller noted, “There's no shortage of people who are interested in our content. It just keeps growing [and] it's evergreen; If you started playing games when you were eight, you're still watching and playing games when you’re 25.”

So the thesis that there’s a strong audience ready to be mined for their spending power and views “is holding,” Miller said. “What hasn't held is what's the revenue model, a lot of the investment dollars came in, because they thought it was going to be like traditional sports, and it's not.”

Miller did acknowledge that overall it’s a “tough economic time and [there’s] lower CPMs and a cutback in marketing dollars… esports boards have had a tough time.” He also noted that “Then you can throw some gasoline on the fire with the ill-fated FaZe IPO, which was a really bad idea from the beginning, and I don’t think there was one person knowledgeable about the gaming space or about FaZe that thought that was going to work.”

In addition to its focus on winning esports championships, Miller said NRG’s eager to continue growing its content side of the business, Full Squad Gaming. It’s basically “a casual gaming brand that’s like Barstool [Sports] for gamers,” Miller said. He characterized the brand he and O’Neal have built as having the image of being “the world’s biggest kid.”

While NRG isn’t profitable, Miller said he’s still seen interest from sponsors and advertisers eager to tap into its social gaming community and reach its core audience – men aged 15 to 35. Since 2016, NRG has raised $40 million, Miller confirmed.

MSG Sports couldn’t immediately be reached for comment. President and chief operating officer David Hopkinson said in a statement, “NRG is a leading professional gaming and entertainment company with championship teams and innovative content. This transaction has brought together premier esports teams with a track record of success and allows MSG Sports to remain a significant investor in the esports industry.”

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🤠Musk Picks Texas and 🔥Tinder AI Picks Your Profile Pictures
Image Source: Tinder

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Tinder is altering dating profile creation with its new AI-powered Photo Selector feature, designed to help users choose their most appealing dating profile pictures. This innovative tool employs facial recognition technology to curate a set of up to 10 photos from the user's device, streamlining the often time-consuming process of profile setup. To use the feature, users simply take a selfie within the Tinder app and grant access to their camera roll. The AI then analyzes the photos based on factors like lighting and composition, drawing from Tinder's research on what makes an effective profile picture.

The selection process occurs entirely on the user's device, ensuring privacy and data security. Tinder doesn't collect or store any biometric data or photos beyond those chosen for the profile, and the facial recognition data is deleted once the user exits the feature. This new tool addresses a common pain point for users, as Tinder's research shows that young singles typically spend about 25 to 33 minutes selecting a profile picture. By automating this process, Tinder aims to reduce profile creation time and allow users to focus more on making meaningful connections.

In wholly unrelated news, Elon Musk has announced plans to relocate the headquarters of X (formerly Twitter) and SpaceX from California to Texas. SpaceX will move from Hawthorne to Starbase, while X will shift from San Francisco to Austin. Musk cited concerns about aggressive drug users near X's current headquarters and a new California law regarding gender identity notification in schools as reasons for the move. This decision follows Musk's previous relocation of Tesla's headquarters to Texas in 2021.

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  • Penguin Random House agreed to acquire comic book publisher Boom! Studios from backers like Walt Disney Co. - learn more

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Top LA Accelerators that Entrepreneurs Should Know About

Los Angeles, has a thriving startup ecosystem with numerous accelerators, incubators, and programs designed to support and nurture new businesses. These programs provide a range of services, including funding, mentorship, workspace, networking opportunities, and strategic guidance to help entrepreneurs develop their ideas and scale their companies.


Techstars Los Angeles

Techstars is a global outfit with a chapter in Los Angeles that opened in 2017. It prioritizes local companies but will fund some firms based outside of LA.

Location: Culver City

Type of Funding: Pre-seed, early stage

Focus: Industry Agnostic

Notable Past Companies: StokedPlastic, Zeno Power


Grid110

Grid110 offers no-cost, no-equity programs for entrepreneurs in Los Angeles, including a 12-week Residency accelerator for early-stage startups, an Idea to Launch Bootcamp for pre-launch entrepreneurs, and specialized programs like the PledgeLA Founders Fund and Friends & Family program, all aimed at providing essential skills, resources, and support to help founders develop and grow their businesses.

Location: DTLA

Type of Funding: Seed, early stage

Focus: Industry Agnostic

Notable Past Companies: Casetify, Flavors From Afar


Idealab

Idealab is a renowned startup studio and incubator based in Pasadena, California. Founded in 1996 by entrepreneur Bill Gross, Idealab has a long history of nurturing innovative technology companies, with over 150 startups launched and 45 successful IPOs and acquisitions, including notable successes like Coinbase and Tenor.

Location: Pasadena

Type of Funding: Stage agnostic

Focus: Industry Agnostic, AI/Robotics, Consumer, Clean Energy

Notable Past Companies: Lumin, Coinbase, Tenor


Plug In South LA

Plug In South LA is a tech accelerator program focused on supporting and empowering Black and Latinx entrepreneurs in the Los Angeles area. The 12-week intensive program provides early-stage founders with mentorship, workshops, strategic guidance, potential pilot partnerships, grant funding, and networking opportunities to help them scale their businesses and secure investment.

Location: Los Angeles

Type of Funding: Pre-seed, seed

Focus: Industry Agnostic, Connection to South LA and related communities

Notable Past Companies: ChargerHelp, Peadbo


Cedars-Sinai Accelerator

The Cedars-Sinai Accelerator is a three-month program based in Los Angeles that provides healthcare startups with $100,000 in funding, mentorship from over 300 leading clinicians and executives, and access to Cedars-Sinai's clinical expertise and resources. The program aims to transform healthcare quality, efficiency, and care delivery by helping entrepreneurs bring their innovative technology products to market, offering participants dedicated office space, exposure to a broad network of healthcare entrepreneurs and investors, and the opportunity to pitch their companies at a Demo Day.

Location: West Hollywood

Type of Funding: Seed, early stage, convertible note

Focus: Healthcare, Device, Life Sciences

Notable Past Companies: Regard, Hawthorne Effect


MedTech Innovator

MedTech Innovator is the world's largest accelerator for medical technology companies, based in Los Angeles, offering a four-month program that provides selected startups with unparalleled access to industry leaders, investors, and resources without taking equity. The accelerator culminates in showcase events and competitions where participating companies can win substantial non-dilutive funding, with the program having a strong track record of helping startups secure FDA approvals and significant follow-on funding.

Location: Westwood

Type of Funding: Seed, early stage

Focus: Health Care, Health Diagnostics, Medical Device

Notable Past Companies: Zeto, Genetesis


KidsX

The KidsX Accelerator in Los Angeles is a 10-week program that supports early-stage digital health companies focused on pediatric care, providing mentorship, resources, and access to a network of children's hospitals to help startups validate product-market fit and scale their solutions. The accelerator uses a reverse pitch model, where participating hospitals identify focus areas and work closely with selected startups to develop and pilot digital health solutions that address specific pediatric needs.

Location: East Hollywood

Type of Funding: Pre-seed, seed, early stage

Focus: Pediatric Health Care Innovation

Notable Past Companies: Smileyscope, Zocalo Health


Disney Accelerator

Disney Accelerator is a startup accelerator that provides early-stage companies in the consumer media, entertainment and technology sectors with mentorship, guidance, and investment from Disney executives. The program, now in its 10th year, aims to foster collaborations and partnerships between innovative technology companies and The Walt Disney Company to help them accelerate their growth and bring new experiences to Disney audiences.

Location: Burbank

Type of Funding: Growth stage

Focus: Technology and entertainment

Notable Past Companies: Epic Games, BRIT + CO, CAMP


Techstars Space Accelerator

Techstars Space Accelerator is a startup accelerator program focused on advancing the next generation of space technology companies. The three-month mentorship-driven program brings together founders from across the globe to work on big ideas in aerospace, including rapid launch services, precision-based imaging, operating systems for complex robotics, in-space servicing, and thermal protection.

Location: Los Angeles

Type of Funding: Growth stage

Focus: Aerospace

Notable Past Companies: Pixxel, Morpheus Space



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🚁 One Step Closer to Air Taxis in LA
Image Source: Joby Aviation

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Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.


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