Arlington to construct Esports Stadium

The home of the making is a risky bet on the fast-growing world of competitive video games.

Arlington, a city in Texas, is going to construct a $10-million, state-of-the-art stadium exclusively for eSports. This should be the first of its kind initiative where tax money is used to develop an e-Sports venue. The council of the city, home of Dallas Cowboys and Texas Rangers, seems to be betting big on the growth of eSports.

The stadium will offer facilities to follow Overwatch or Fortnite matches on live-streaming apps and to witness contestants in tricked-out easy chairs compete on big screens.

The global revenue from sports – through sponsorships, merchandise and tickets, game-publisher fees, media rights and advertising – is projected to touch $906 million this year. That has prompted the city rulers to take the plunge.

Arlington Mayor Jeff Williams said: “The revenue is growing so quickly, and the sport is growing so quickly, that we want to be there at the table and starting that revenue generation as soon as possible.”

The venue, slated to open later this year, will accommodate 2,000 fans. It will also include shops, team training areas, a broadcast studio and a VIP room. The city said its investment will be repaid with event proceeds, arena-naming rights and lease payments on the building.

Economists have repeatedly warned cities about the folly of supporting sports venues.

“Every dollar that Arlington spends on this esports arena is a dollar it can’t devote to education or roads or public safety,” said Michael Farren, an economist at George Mason University’s Mercatus Center in Arlington, Virginia.

For the investment to pay off, fans will need to come from outside Arlington, said Andrew Zimbalist, an economics professor at Smith College in Northampton, Massachusetts. If most attendees already live in the area, it simply “reshuffles” spending from other entertainment venues, such as movie theatres or bowling alleys.

“It perplexes me that this is something that’s happening at all,” Zimbalist said.

Gamemaker Activision Blizzard Inc. has opened arenas in Taipei and Burbank, California. Allied Esports, a joint venture of Chinese gaming companies, has venues in Santa Ana, California, and Las Vegas and an internet cafe in Beijing with gaming stations and space for 200 spectators. The University of California-Irvine opened an arena in 2016.

Arlington voters have twice approved stadium funding for Major League Baseball’s Rangers. In 1991, they OK’d the sale of $135 million in bonds to build what’s now called Globe Life Park. And in 2016, they approved as much as $500 million for a $1 billion ballpark, yet to be built, with a retractable roof.

The city’s pride, however, is AT&T Stadium, also known as Jerry World after the Cowboys’s billionaire owner. In 2004, voters passed new sales, hotel and car-rental taxes to put $325 million towards the $1.2 billion, 80,000-seat stadium.

Source: bloomberg.com