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Knicks Gaming Claims 2K League Title, League to Expand for Sophomore Season
The NBA 2K League completed its inaugural season on Saturday with the 8th seed Knicks Gaming defeating the 6th seed HEAT Check Gaming 2-0 (69-66, 74-71). More than 68,000 concurrent viewers (at peak) tuned in for the finals. The league’s sophomore season will see the addition of 4 new teams (21 total) as the Los Angeles Lakers, Minnesota Timberwolves, Brooklyn Nets and Atlanta Hawks have committed to fielding gaming franchises; just 9 NBA clubs remain without a 2K affiliate. L.A., Minnesota, Brooklyn and Atlanta will pay the same $750,000 expansion fee (covers 3 seasons) that the founding franchises did, though they will bear the costs associated with the creation of their gaming team’s brand; the league covered that expense for the first 17 franchises. While the NBA 2K League’s competition committee has yet to decide the number of players that each existing franchise will get to protect, there will be an expansion draft on September 28th; there will also be another tryout, combine and ultimately a rookie draft to fill out team rosters.
Howie Long-Short: Since July 13, the league has averaged 10,500 concurrent viewers per broadcast. While that figure represents significant growth from the league’s debut in May, several owners have indicated they were disappointed that viewership/engagement figures led to underwhelming league sponsorship/partnership sales during the debut season.
Shares of 2K publisher Take-Two Interactive Software (TTWO) hit an all-time high ($134.63) following posting of company’s Q1 earnings report in early August. The stock rose +9% on news that “better than expected recurrent consumer spending on Grand Theft Auto Online and NBA 2K18 (perhaps boosted by the league’s presence), as well as robust ongoing demand for Grand Theft Auto V” drove net bookings +11.5% YoY (to $288.3 million) and net income +19 YoY (to $71.7 million). Don’t expect sales to come to a halt anytime soon either, the company is releasing the much-hyped Red Dead Redemption 2 in October. Samantha Greenberg of Margate Capital Management recently called the company’s content pipeline “the largest in company history.” Shares are +22% YTD, opening at $134.01 later this morning.
Fan Marino: Take Two Interactive reported that it sold more than 20 million copies of NBA 2K18, a record for the +/- 20 old gaming franchise (debuted in ’99); the company’s highest-selling sports title of all-time. The 2019 edition of the game (NBA 2K19) will be released on September 11th.
Knicks Gaming finished 14th in the regular season standings. The team only qualified for the postseason because it won The Ticket tournament (winner became auto-qualifier) as the 15th seed.