Today, Twitch announced via press release that they signed a deal with Team SoloMid and Cloud9 to be both organization's exclusive representatives for sponsorship sales. This agreement is in addition to the one already in place for Twitch to be the exclusive streaming platform for TSM and Cloud9.
“Twitch’s goal is to continually expand growth and revenue opportunities for our content creators, the true drivers of community creation,” said Kevin Lin, COO of Twitch via the release. “Our partnership with TSM and Cloud9 is long-standing and has helped pro players thrive in a growing live media ecosystem. This expanded partnership will also improve the overall health of the esports industry by providing more opportunities for players through long-term support in a more sustainable ecosystem.”
Providing more opportunities for players and organizations to earn money outside of tournament play is vital to the continued stability and growth of esports. At this stage, Twitch is far better equipped to sell these organizations to brands than the teams themselves. The release also implies that Twitch will be selling "their combined audience," further increasing the value to brands, something that would be much harder for the two teams to coordinate on their own.
This news is as intriguing for what it doesn't say as for what it does. There is no information as to how this will affect sales of either team outside of the purview of Twitch. It is unknown if Riot or ELEAGUE, for example, will be able to sell these organizations to brands when it comes to their own competitive coverage.
The situation is potentially further complicated by the fact tournaments often broadcast via Twitch's streaming platform. Will these tournament organizers be asked to give Twitch a cut whenever they sell a sponsorship that involves TSM and Cloud9? The answer to this question could end up having a much bigger impact on the esports landscape than the announcement itself.
We've reached out to Twitch for further comment and will update the story if we receive further information.
Updated 11/18/2016 at 9:24am PST: Twitch has responded with further clarification as to the nature of the sponsorships stating that the sponsorships "the sponsorships are of the teams themselves, so it is more than just the content on Twitch (e.g. brands on players' jerseys)". We are still awaiting clarification as to how this will affect organizers from selling content that includes TSM and Cloud9, but this could prove to be a game-changer for the handling of esports sponsorships