Research On The Valuation Of The Professional E-sports Club

With the high-speed development of the industry of e-sports in China,the value identification on it in the fields of public sports increases.The modes of the industry of e-sports is becoming more and more diverse,professional,and popular.As a result,its ecological and social values have been successively enhanced.As the basic units as well the powerful promoters of e-sports games,e-sports clubs have become professional and commercialized.Their potentiality causes the attention of each big manufacturers in such a way that becomes the hot targets that capital pursue.With the influx of money,the valuation of professional e-sports clubs has come to be an important subject.Since,the professional competitions of League of Legends in China are the most symbolic figures of China’s e-sports industry,their units,namely,the Chinese professional clubs of League of Legends are the objects of this research.The concepts of e-sports and professional e-sports club,and the developments of e-sports clubs will be firstly introduced.Also,the characters of e-sports club’s businesses and their profit modes will be evaluated.After the discussions on the traditional ways of business valuation and the analysis on the suitability of these ways toward e-sports clubs,Asset-Based Approach and Income Approach as the evaluative methods for the valuation of professional football(soccer)clubs.Then,based on the characters of e-sports industry,the assets that affect the value of e-sports clubs will be estimated;and the e-sports’ special life cycle will be reviewed.In the part of case study,the object will be TES Gaming club.By grasping the income status of the whole league industry in the past year and combining with the performance of this e-sports club,its free cash flow of the future years is reasonably predicted.After determining the income period of this evaluation and the applicable discount rate,the enterprise value of this e-sports club is obtained.From the perspective of verification,the case shows that the Income Approach can be used to evaluate the value of professional e-sports clubs,and such evaluations are feasible and reasonable.