Six years ago, the Madison Square Garden Company, a group that includes James Dolan, the owner of the New York Knicks and the New York Rangers, announced a triumphant entrance into sports’ next frontier: a professional video game league.
The New York investors spent more than $10 million to purchase a majority stake in Counter Logic Gaming, an e-sports team, and said that professional video gaming “now stands on the verge of enormous change, which we believe has the potential to generate significant growth.”
Instead, that growth has stagnated. As e-sports revenue fell below expectations and investors became skeptical of the industry, Madison Square Garden’s owners last year tried to find a way out of the business by selling their marquee team.
After years of fanfare, e-sports in the United States are giving way to economic realities. Unable to turn a profit, team owners are cutting costs by laying off employees and ending contracts with star players. In some cases, they are selling their teams and sometimes at a loss, offering a blunt reality check to people who believed e-sports could be the next big thing in entertainment.