Owners Of Traditional Sports Franchises Buying Esport Franchises To Capture Disgruntled Millennials

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During his recent interview with Tobias, Will Hershey, Co-Founder and CEO at Roundhill Investments discussed why Owners Of Traditional Sports Franchises Are Buying Esport Franchises To Capture Disgruntled Millennials. Here’s an excerpt from the interview:

Will Hershey:
Esports is really global and it’s easy to play. That’s the same reason that for me personally, when I look at the traditional sports landscape, I’m bullish on soccer, on football, because anyone can get together and play it. Basketball you need a hoop, but similarly. I look at some of the other sports and there’re warning signs. The NFL’s got head injuries. The NHL is very regional. Major League Baseball, the average fan is 60. That’s pretty much accurate. I think it’s 57. The reason why you’re seeing so much investment into this space and a lot of it is coming actually from traditional sports owners who are investing into teams or investing into some of the game publishers, is because they view it as a hedge against their traditional sports assets.

Will Hershey:
Esports fans are young, they’re affluent, because they’re able to afford games. But longer term, I view kind of advancements in hardware and technology as really being the driving force here. You’re now at a point where you can play AAA high end games on an iPhone five or six, and really what that’s done is introduced an entirely new part of the world who can’t afford a $2,000 gaming PC or $500 Xbox to the world of gaming. For me that’s what really gets me excited longer term.

Tobias Carlisle:
So how does NERD invest into this stuff. Does it track an index, or is it active? How do you decide whether you want to add something, size it up? How does NERD actually make the investments?

Will Hershey:
Sure. So we’re an index based product. Really when we’re looking at a theme like esports or any other kind of thematic equity product for that matter, it’s not always so straight forward in terms of which companies are really getting you that exposure. For us, our job, we view as being that and providing as close we can to giving people beta exposure to this theme. There’s no quote unquote benchmark. We believe we’re trying to create that benchmark. The way we go about it, I think is pretty unique. So the first step really that we’re doing is screening public filings for keywords. So AKA presentations, press releases, annual reports, for keywords like esports, game streaming, digital entertainment. That’s really defining our universe.

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