76ers owners expand esports empire with Clutch Gaming purchase

(Bloomberg) — The owners of the Philadelphia 76ers and New Jersey Devils are buying a majority stake in Clutch Gaming, a professional video-game team owned by the Houston Rockets.

The deal values Clutch Gaming, which owns one of the coveted slots in Riot Games Inc.’s domestic League of Legends circuit, at more than $30 million, according to two people familiar with the terms. 76ers owners Harris Blitzer Sports & Entertainment will merge Clutch with Dignitas, a gaming franchise acquired in 2016, and create a new umbrella esports organization with the Rockets as a minority partner, according to a statement Thursday.

The deal marks the first time that a franchise in the North American League of Legends Championship Series has changed hands. The 10-team league, which took its current form in 2017, was part of a wave of esports ventures modeled after traditional sports enterprises like the NFL or NBA — with salary caps, revenue sharing and permanent franchises.

The Rockets originally committed to paying $13 million for the franchise in 2017. Dignitas applied but wasn’t chosen. The sale, including both the slot and the entire Clutch Gaming organization, highlights the growth in League of Legends’ franchise values in the past two years. ESPN first reported on the sale in April.

Starting in January, the team will compete in League of Legends under the Dignitas name and uniform, Harris Blitzer said in a statement. Michael Prindiville, Dignitas’s chief executive officer, will be CEO of the combined venture.

Harris Blitzer was created by Josh Harris, co-founder of Apollo Global Management LLC, and David Blitzer, an executive with Blackstone Group LP. The company owns a number of sports and entertainment properties, including the 76ers, Devils, the Prudential Center and English soccer club Crystal Palace. Harris and Blitzer were among the first traditional sports owners to dive into esports when they purchased Dignitas in 2016.