Tag Archives: 2017

Jeff Bezos 2017 Letter To Shareholders
April 22, 2018 6:01 pm|Comments (0)


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U.S. tax liabilities for crypto currencies in 2017 seen at $25 billion, to pressure bitcoin: Fundstrat
April 5, 2018 6:02 pm|Comments (0)

NEW YORK (Reuters) – Soaring crypto-currency prices last year are estimated to result in U.S. tax liabilities of $ 25 billion, adding further selling pressure to these assets in the short term, according to a research note by Fundstrat Global Advisers on Thursday.

A bitcoin logo is seen at a facility of the Youth and Sports Ministry in Caracas, Venezuela February 23, 2018. REUTERS/Marco Bello

This could mean a massive outflow from crypto currencies to the dollar by April 15, the deadline for filing taxes this year, the firm said.

“We believe selling pressures (in crypto) have been amplified by capital gains tax-related selling this year,” said Thomas Lee, Fundstrat’s co-founder and head of research. Lee was formerly J.P. Morgan’s chief equity strategist from 2007 to 2014.

Still, Fundstrat believes the outlook for bitcoin should improve after the April 15 tax deadline. It reiterated its mid-year target of $ 20,000 and year-end forecast of $ 25,000.

Bitcoin in 2018 has lost more than 50 percent of its value, with other crypto currencies such as ether and ripple also hurt by intense regulatory scrutiny around the world.

Bitcoin last traded down nearly 2 percent at $ 6,673.53 on the Bitstamp platform. In December last year, bitcoin hit a record just shy of $ 20,000.

Virtual currencies led by bitcoin grew $ 590 billion in 2017 in terms of market value, compared with an $ 11 billion increase in 2016, Fundstrat said, estimating that 30 percent of crypto holders are in the United States.

The $ 25-billion tax liability accounts for 20 percent of the expected total tax payments for capital gains of around $ 168 billion in 2017, the research firm said. The projected tax liability is based on taxable gains for crypto of $ 92 billion, it added.

Fundstrat also said crypto exchanges posted record profit in November and December and are expected to have huge tax liabilities, which should add to further selling in crypto-currencies. Many of the exchanges have net income exceeding $ 1 billion in 2017 and keep their working capital in bitcoin and ether, the research firm added.

To meet these tax liabilities, exchanges need to sell bitcoin and ether.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum


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Tracking Warren Buffett's Berkshire Hathaway Portfolio – Q4 2017 Update
February 15, 2018 6:07 pm|Comments (0)

This article is part of a series that provides an ongoing analysis of the changes made to Berkshire Hathaway’s US stock portfolio on a quarterly basis. It is based on Warren Buffett’s regulatory 13F Form filed on 02/14/2018. Please visit our Tracking 10 Years Of Berkshire Hathaway’s Investment Portfolio article series for an idea on how his holdings have progressed over the years and our previous update for the moves in Q3 2017.

During Q4 2017, Berkshire Hathaway’s (BRK.A, BRK.B) US long stock portfolio value increased ~8%, from $ 178B to $ 191B. The top five positions account for ~62% of the portfolio: Apple Inc. (NASDAQ:AAPL), Wells Fargo (NYSE:WFC), Kraft Heinz Co. (NASDAQ:KHC), Bank of America (NYSE:BAC), and Coca-Cola (NYSE:KO). There are 45 individual stock positions, many of which are minutely small compared to the overall size of the portfolio.

Warren Buffett’s writings (pdfs here) are a treasure trove of information and are a very good source for anyone starting out on individual investing.

New Stakes

Teva Pharmaceuticals (NYSE:TEVA): TEVA is a very small 0.19% of the portfolio stake established this quarter at prices between $ 11.20 and $ 19.33, and the stock currently trades at $ 19.33.

Stake Disposals


Stake Increases

Apple Inc.: AAPL is now the largest 13F portfolio stake at 14.63%. It was established in Q1 2016 at prices between $ 93 and $ 110, and increased by ~55% the following quarter at prices between $ 90 and $ 112. Q4 2016 saw another ~275% increase at prices between $ 106 and $ 118, and that was followed with a stake doubling in January 2017 at prices between $ 116 and $ 122. There was another ~23% increase this quarter at prices between $ 154 and $ 176. The stock currently trades at $ 167.

US Bancorp (NYSE:USB): The 2.44% USB stake has been in the portfolio since 2006. The original position was tripled during the 2007-2009 time frame. It was then kept relatively steady till Q2 2013, when ~17M shares were purchased at prices between $ 32 and $ 36. The last significant activity was a ~5% increase in Q1 2015 at prices between $ 41 and $ 45. Berkshire’s cost basis on USB is ~$ 32, and the stock is now at $ 55.31. There was a marginal increase this quarter.

Bank of New York Mellon Corp. (NYSE:BK): BK is a 1.71% of the 13F portfolio stake. The bulk of the original position was purchased in Q2 2012 at prices between $ 19.50 and $ 25. The stake was increased by 30% in Q2 2013 at prices between $ 26.50 and $ 30.50. The five quarters through Q3 2015 had seen an about-turn, as there was a combined ~20% reduction at prices between $ 36 and $ 45. Q1 2017 saw a ~50% increase at prices between $ 43.50 and $ 49, and that was followed with another similar increase the following quarter at prices between $ 46 and $ 51. There was a ~20% further increase this quarter at prices between $ 51 and $ 55. The stock currently trades at $ 55.98.

Monsanto Company (NYSE:MON): The 0.71% MON position was established in Q4 2016 at prices between $ 98 and $ 106, and the stock currently trades at $ 120. In September 2016, Bayer AG (OTCPK:BAYRY) agreed to acquire Monsanto in a $ 128 per share cash deal. The last two quarters have seen a combined ~46% stake increase at prices between $ 115 and $ 122.

Stake Decreases

Wells Fargo & Co.: WFC is Buffett’s second-largest stake at 14.54% of the US long portfolio. In recent activity, around 9M shares were sold in Q2 2017 at around $ 53 per share to bring the ownership stake below the 10% threshold. The stock currently trades at $ 59.55. Berkshire’s cost basis is at ~$ 25.50. The last two quarters have seen marginal trimming.

American Airlines (NASDAQ:AAL): AAL stake was first purchased in Q3 2016. The position is now at 1.25% of the portfolio. The original purchase was at prices between $ 28 and $ 39 and doubled in Q4 2016 at prices between $ 36.50 and $ 50. The stock is now at $ 51.07. There was a ~2% trimming this quarter.

Note: Berkshire controls 9.6% of AAL.

General Motors (NYSE:GM): GM is a ~1% of the 13F portfolio position that was first purchased in Q1 2012 at prices between $ 21 and $ 30. The stake was increased by 60% in Q2 2013 at prices between $ 27.50 and $ 35. There was a ~20% increase in Q3 2014 at prices between $ 32 and $ 38, and a similar increase in Q3 2015 at prices between $ 27 and $ 33.50. Q2 2017 saw another 20% increase at prices between $ 32.50 and $ 35.50. There was an about-turn this quarter: a ~17% selling at prices between $ 40.50 and $ 46.50. The stock currently trades at $ 41.81.

International Business Machines (NYSE:IBM): The original IBM position was purchased in Q3 2011 at prices between $ 158 and $ 185. As of Q4 2016, the share count had gone up by almost 40% through periodic purchases. There was an about-turn in Q1 2017: a ~21% selling at prices between $ 166 and $ 182, and that was followed with another ~16% reduction in early May at prices between $ 150 and $ 160. Last quarter saw another one-third reduction at prices between $ 140 and $ 156. The remaining position was almost sold out this quarter at prices between $ 145 and $ 162. The stock currently trades at ~$ 155.

Note: Berkshire’s cost basis on IBM was ~$ 170 per share.

Sanofi (NYSE:SNY): The minutely small 0.09% of the portfolio stake in SNY saw marginal trimming this quarter.

Note: Per the annual report, Berkshire has a $ 1.7B position in Sanofi – so in addition to the ADRs listed in the 13F report, Berkshire also owns Sanofi securities listed in Euronext Paris.

Kept Steady

Kraft Heinz Co.: KHC is currently the third-largest 13F stock position at 13.24% of the portfolio. Kraft Heinz started trading in July 2015, with Berkshire owning just over 325M shares (~27% of the business). The stake came about as a result of two transactions with 3G Capital as partner: a ~$ 4B net investment in 2013 for half of Heinz, and a ~$ 5B investment for the acquisition of Kraft Foods Group earlier this year. Berkshire’s cost basis on KHC is below $ 30 per share, compared to the current price of $ 71.92.

Bank of America: Berkshire established this large (top-five) 10.48% of the portfolio position through the exercise of Bank of America warrants. The warrants had a strike price of $ 7.14, compared to the current price of $ 32. The cost to exercise was $ 5B, and it was funded using the $ 5B in 6% preferred stock they held.

Note: Berkshire’s ownership stake in Bank of America is ~6.5%.

American Express (NYSE:AXP) and Coca-Cola: These two very large stakes were kept steady during the last ~4 years. Buffett has said these positions will be held “permanently”. Berkshire’s cost basis on AXP and KO are at around $ 8.49 and $ 3.25 respectively, and the ownership stakes are at ~17.5% and ~9.4% respectively.

Phillips 66 (NYSE:PSX): PSX is a fairly large 4.27% of the portfolio stake. It is a long-term position. As of Q4 2014, the stake was very small at ~0.5% of the portfolio (~6.5M shares). Q1 2015 saw a ~14% increase at prices between $ 59 and $ 80. The following quarter saw an additional ~300% increase at prices between $ 76.50 and $ 82, and that was followed with a stake doubling in Q3 2015 at prices between $ 70.50 and $ 84.50. Q2 2016 saw another ~23% increase in the high $ 70s price range. The stock currently trades at $ 93.33. Berkshire’s cost basis is $ 78.31.

Note 1: Earlier this week, it was disclosed that Phillips 66 agreed to repurchase 35M shares from Berkshire at $ 93.725 per share. Berkshire indicated the transaction’s sole purpose was to eliminate additional regulatory requirements that come with ownership stake above 10%.

Note 2: Berkshire avoided disclosing PSX stake in the original Q2 2015 13F by making use of the “Section 13(f) Confidential Treatment Requests”. An amendment filed on 9/4/2015 disclosed the huge stake build-up. Berkshire controlled ~16% of PSX at the time.

Moody’s Inc. (NYSE:MCO): MCO is a 1.90% of the US long portfolio stake. It is a very long-term position, and Buffett’s cost basis is $ 10.05. The stock currently trades at ~$ 164. Berkshire controls 11.5% of the business.

Southwest Airlines (NYSE:LUV): LUV is a 1.63% portfolio stake purchased in Q4 2016 at prices between $ 38.50 and $ 51 and increased by ~10% in the following quarter at prices between $ 49.50 and $ 59. The stock is now at $ 57.73.

Note: Berkshire owns ~7.9% of LUV.

Delta Air Lines (NYSE:DAL): DAL was a very small 0.19% position in Q3 2016. The stake saw a whopping ~850% increase in Q4 2016 at prices between $ 39 and $ 52. The stock currently trades at $ 52.20, and the stake is now at 1.56% of the portfolio. There was a ~12% trimming during H1 2017.

Note: Berkshire controls ~7.3% of DAL.

Charter Communications (NASDAQ:CHTR): CHTR is a 1.49% of the US long portfolio position. It was established in Q2 2014 at prices between $ 118 and $ 158 and more than doubled the following quarter at prices between $ 151 and $ 164. Q4 2014 saw a further ~25% increase at prices between $ 140 and $ 170. In Q2 2015, the position was again increased by ~42% at prices between $ 168 and $ 193, and that was followed with another ~21% increase the following quarter at prices between $ 167 and $ 195. Q2 2016 saw a ~10% trimming at prices between $ 198 and $ 233. The stock currently trades at $ 359, compared to Berkshire’s cost basis of around $ 160. There was a ~10% trimming last quarter.

Note: Berkshire controls ~3.4% of CHTR.

Goldman Sachs (NYSE:GS): GS is a 1.46% of the US long portfolio stake established in Q4 2013. Berkshire Hathaway received $ 5B worth of warrants to buy GS stock during the financial crisis (October 2008) at a strike price of $ 115 (43.5M shares) that was to expire October 1, 2013. Buffett exercised the right before expiry to start this long position. Q3 2015 saw a ~13% reduction at prices between $ 172 and $ 213. It currently trades at ~$ 263.

DaVita Inc. (NYSE:DVA): DVA is a 1.29% of the US long portfolio position that was aggressively built up over several quarters: the original stake was doubled in Q1 2012, increased by over 50% in Q2 2012, 24% in Q4 2012, and an additional 16% in Q1 2013. There has been marginal buying since. The bulk of the stake build-up happened at prices between $ 30 and $ 49. The stock currently trades at $ 74.75, compared to Berkshire’s overall cost basis of $ 45.33.

Note 1: Berkshire’s ownership stake in DVA crossed the 20% ownership threshold last quarter as a result of buybacks at DaVita.

Note 2: In May 2013, Berkshire’s Ted Weschler signed an accord with DVA, limiting open market purchases to 25% of the company.

United Continental Holdings (NYSE:UAL): A minutely small 0.18% UAL position as of Q3 2016 saw a huge ~540% increase in Q4 2016 at prices between $ 52.50 and $ 76. It currently goes for $ 65.68. The stake is at ~1% of the portfolio.

Note: Berkshire controls ~9.3% of UAL.

Liberty SiriusXM Group (LSXMA, LSXMK): The tracking stock was acquired as a result of Liberty Media’s recapitalization in April 2016. Shareholders received 1 share of Liberty SiriusXM Group, 0.25 share of Liberty Media Group, and 0.1 share of Liberty Braves Group for each share held. Berkshire held 30M shares of Liberty Media, for which he received the same amount of Liberty SiriusXM Group shares. There was a ~40% stake increase in Q2 2017 at a cost basis of ~$ 40 per share. The stock is now at $ 41.77.

Note: LSXMA/LSXMK is trading at a significant NAV discount to the parent Sirius Holdings’ (NASDAQ:SIRI) valuation. For investors attempting to follow Buffett, LSXMA/LSXMK is a good option to consider for further research.

USG Corporation (NYSE:USG): USG is a very long-term holding, and there was a significant 21.39M share stake increase in Q4 2013 due to conversion of notes at $ 11.40 per share – Berkshire acquired the convertible notes during the financial crisis (2/2009), and USG opted to redeem them on 12/16/2013. Q2 2014 saw a ~12% stake increase at prices between $ 30 and $ 33. The stock currently trades at $ 33.88. Buffett controls around 27% of the business, and his cost basis is ~$ 19.

Verisign Inc. (NASDAQ:VRSN): VRSN was first purchased in Q4 2012 at prices between $ 34 and $ 49.50. The position was more than doubled in Q1 2013 at prices between $ 38 and $ 48. The following quarter saw a one-third increase at prices between $ 44 and $ 49. Q1 and Q2 2014 also saw a combined ~17% increase at prices between $ 47 and $ 63. The stock currently trades at $ 114, and the position is at 0.78% of the portfolio (~10% of the business).

Liberty Global PLC (LBTYA, LBTYK): The position was established in Q4 2013 at prices between $ 37.50 and $ 44.50 (adjusted for the 03/2014 stock split) and increased significantly in the following two quarters at prices between $ 38.50 and $ 46. The three quarters through Q1 2016 had also seen a combined ~30% increase at prices between $ 30 and $ 50. Q2 2016 saw a ~17% further increase at prices between $ 27 and $ 39. The stock is now at $ 34.92, and the stake is at 0.51% of the 13F portfolio.

Note: Berkshire controls 7.9% of Liberty Global.

Sirius XM Holdings: The 0.39% SIRI stake was purchased in Q4 2016 at prices between $ 4.08 and $ 4.61. Q2 2017 saw selling: a ~20% reduction at prices between $ 4.70 and $ 5.50. The stock is currently at $ 6.09.

Synchrony Financial (NYSE:SYF): SYF is a 0.42% of the portfolio position purchased in Q2 2017 at prices between $ 26.50 and $ 34.50 and increased by ~20% last quarter at prices between $ 28.50 and $ 31.25. The stock is now at $ 36.70.

Note: Synchrony is the private-label credit card business spin-off from GE that started trading in August 2014 at ~$ 23 per share. It has seen recent super-investor interest – Baupost Group has a ~10% portfolio stake.

Axalta Coating Systems (NYSE:AXTA): AXTA is a small 0.39% of the portfolio stake established in Q2 2015 at prices between $ 28 and $ 36 and increased by ~16% the following quarter at prices between $ 24.50 and $ 33.50. The stock currently trades at $ 30.84. Berkshire owns ~9.8% of the business.

Restaurant Brands International (NYSE:QSR): QSR is a 0.27% of the 13F portfolio position established in Q4 2014 at prices between $ 35 and $ 42. The stock currently trades well above that range at $ 57.71. It started trading in December 2014 following a merger/rename transaction between Tim Hortons and Burger King Worldwide.

Note: Berkshire’s stake in the business is ~4.2%.

Store Capital (NYSE:STOR): The 0.25% STOR stake was established in Q2 2017 in a private placement transaction at $ 20.25 per share. The stock is now at $ 23.41.

Costco Wholesale (NASDAQ:COST), Graham Holdings (NYSE:GHC), Johnson & Johnson (NYSE:JNJ), Liberty LiLAC Group (LILA, LILAK), Mondelez International (NASDAQ:MDLZ), M&T Bank (NYSE:MTB), MasterCard Inc. (NYSE:MA), Procter & Gamble (NYSE:PG), Torchmark Corporation (NYSE:TMK), United Parcel Service (NYSE:UPS), Verisk Analytics (NASDAQ:VRSK), Verizon Communications (NYSE:VZ), Visa Inc. (NYSE:V), and Wal-Mart Stores (NYSE:WMT): These are very small positions (less than ~0.5% of the portfolio each) kept steady this quarter.

Note: Since November 2015, Warren Buffett is known to own ~8% of Seritage Growth Properties (NYSE:SRG) at a cost basis of $ 36.50 in his personal portfolio. It currently trades at $ 38.96. SRG is a REIT spin-off from Sears Holdings (NASDAQ:SHLD) that started trading in July 2015.

The spreadsheet below highlights changes to Berkshire Hathaway’s US stock holdings in Q4 2017:

Warren Buffett - Berkshire Hathaway - Q4 2017 13F Report

Disclosure: I am/we are long BAC, GM.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.


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China's Leshi Internet flags $1.8 billion loss for 2017, citing LeEco cash crunch
January 31, 2018 6:10 am|Comments (0)

HONG KONG (Reuters) – Chinese video-streaming firm Leshi Internet Information & Technology said it expects a net loss of 11.6 billion yuan ($ 1.83 billion) for 2017, citing a cash crunch at embattled technology conglomerate LeEco that hurt its revenues.

Leshi had reported a profit of 554.8 million yuan in 2016.

It was once the main listed unit of LeEco which was founded by Jia Yueting. Last year, property developer Sunac China became Leshi’s second-largest shareholder and Jia subsequently resigned as chairman and CEO from the company but remains its largest shareholder.

Leshi is trying to recover debt owed by Jia. It said last week it is seeking equity stakes in the car businesses of Jia for debt owed by him and his companies amounting to as much as 7.5 billion yuan ($ 1.17 billion).

Leshi flagged the expected loss for 2017 in a statement to the Shenzhen stock exchange on Tuesday evening.

The announcement sent Leshi’s shares plunging by the daily limit of 10 percent on Wednesday, the sixth consecutive day they have tumbled the maximum allowed since resuming trading a week ago following a 9-month suspension.

(This version of the story corrects fifth paragraph to show announcement was made to Shenzhen stock exchange, not Hong Kong stock exchange)

Reporting by Sijia Jiang; Editing by Anne Marie Roantree and Muralikumar Anantharaman


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The Most-read WIRED Culture Stories of 2017
December 31, 2017 6:00 pm|Comments (0)

Earlier this year, WIRED published a story that asked a question that seemed to encapsulate internet culture in 2017: What does ‘covfefe’ mean? The nonsense term was tweeted out by President Donald Trump, and the internet went into a fit trying to define it. As WIRED culture writer Angela Watercutter wrote, “Nearly every great meme starts with an obscure word, hashtag, or image that is then granted humor based on what the internet does with it. ‘On fleek,’ ‘Damn, Daniel,’ Kermit sipping tea—all of these things have meanings given to them by people online. In fact, creating and spreading new language is one of social media’s greatest skill sets.”

The mystery was never solved, and soon we turned our attention to other great questions, like is mindful meditation BS? Can one really make a living as a D&D Dungeon Master? Or, my personal favorite, just who is Poppy?

Childish Gambino. Atlanta. Lando Calrissian. Inside the Weird, Industry-Altering World of Donald Glover

Childish Gambino. Atlanta. Lando Calrissian. Glover has just about every performance space covered, and all his projects intersect in strange ways.

—Allison Samuels, January 19, 2017

PewDiePie’s Fall Shows the Limits of ‘LOL JK’

The prominent YouTuber’s casual racism and attacks on the media have made him an idol in the eyes of the so-called alt-right.

—Emma Grey Ellis, February 16, 2017

Pepsi’s New Kendall Jenner Ad Was So Bad It Actually United the Internet

The online response to the soda company’s now-pulled marketing video was surprisingly refreshing.

—Angela Watercutter, April 5, 2017

Extremists’ Meme Armies Are Turning Into Militias

On the far-right, political memes have evolved from mere trolling to something that looks a lot more like military propaganda.

—Emma Grey Ellis, April 20, 2017

George R. R. Martin Doesn’t Need to Finish Writing the Game of Thrones Books

George R. R. Martin owes you nothing.

—Emily Dreyfuss, May 5, 2017

The guys behind the Supreme Saint streetwear shopping bot.

Ysa Pérez

Supreme, and the Botmakers Who Rule the Obsessive World of Streetwear

In the fanatical world of limited-release streetwear, milliseconds matter—and the shopping bots reign supreme.

—Lauren Schwartzberg, May 25, 2017

What Does ‘Covfefe’ Mean? The Internet Will Define That For You.

Early one morning President Trump tweeted a fake word. Social media’s reaction is a prime example of how language travels online.

—Angela Watercutter, May 31, 2017

Welcome to Poppy’s World

Pop singer? YouTube star? Cult Leader? Whoever she is, Poppy is here to take over the internet.

—Lexi Pandell, June 3, 2017

It Was Inevitable, Really: Netflix Is Turning Into HBO

Now that it’s canceling shows, the streaming service is acting more like a network than ever.

—Angela Watercutter, June 13, 2017

Is Mindfulness Meditation BS?

Is mindfulness meditation a capitalist tool or a path to enlightenment? Yes.

—Robert Wright, August 12, 2017

Alec Baldwin’s Trump Impression Is a Technical Marvel

The actor’s impersonation isn’t just funny, it’s very technically proficient.

—Angela Watercutter, August 22, 2017

The ‘Distracted Boyfriend’ Meme Photographer Explains All

Antonio Guillem didn’t mean to go viral. In fact, he only just found out what a meme is.

—Brian Barrett, August 28, 2017

Dan Winters

The Replicant: Inside the Dark Future of Blade Runner 2049

What a sequel 35 years in the making can tell us about the state of sci-fi and America’s appetite for dystopia.

—Brian Raftery, September 19, 2017

Steven Soderbergh’s New App, Mosaic, Will Change How You Watch TV

His latest project is a monumental effort designed to keep you glued to your phone.

—Angela Watercutter, November 11, 2017

Meet a Professional Dungeons & Dragons Dungeon Master from New York City

Timm Woods is one of several DMs-for-hire out there, but this isn’t his hobby or a side gig; it’s a living, and a pretty good one at that,

—Brian Raftery, November 19, 2017

‘Star Wars: The Last Jedi’ Is a Near-Perfect Reinvention of the Franchise

Rian Johnson’s movie is the springiest, smartest, most assured installment in years.

—Brian Raftery, December 12, 2017

‘Star Wars: The Last Jedi’ Will Be Too Inclusive for Some People. Good.

Don’t like diversity in your Star Wars movies? Don’t see The Last Jedi.

—Angela Watercutter, December 15, 2017


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Gadget Lab Podcast: Our Favorite Gadgets From 2017
December 16, 2017 12:45 am|Comments (0)


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Riot Games Esports Co-Head Talks ‘League of Legends’ 2017 World Championship
October 21, 2017 12:00 am|Comments (0)

The world’s top competitive video gamers are facing off in China over the next few weeks for the League of Legends 2017 World Championship, one of the premier tournaments in the fast-growing world of esports.

Hosted by Riot Games, the company that makes the popular League of Legends (LoL) online game, the tournament’s early rounds turned in a fair amount of excitement and upsets, though last year’s champion is still standing. The Korean professional esports team SK Telecom T1 remains a favorite in a field that also features teams like Samsung Galaxy (sponsored by the South Korean electronics giant) and the North American team Cloud 9.

If none of those names ring a bell, then the rapid ascension of esports has likely passed you by. Competitive gaming’s popularity around the world has exploded in recent years, and the esports industry is now expected to generate more than $ 1.5 billion in annual revenue by 2020, according to one estimate.

Meanwhile, major professional sports teams like the New York Yankees and Cleveland Cavaliers are throwing money at esports, while tech giants like Amazon and Google compete to lure gaming fans to stream live gameplay and competitions on their digital video platforms, Twitch and YouTube, respectively. Last year, Riot Games (which is owned by Chinese tech giant Tencent) signed a reported $ 300 million streaming rights deal with Walt Disney’s BAMTech, and this year’s LoL world championship tournament is available for streaming around the world on Twitch and YouTube.

The influx of media rights deals has also opened the door for a range of high-profile corporate sponsors, with Riot Games landing sponsorships in recent years from the likes of Acer Gaming, Coca-Cola, T-Mobile, and Mercedes-Benz.

This week Fortune caught up with Jarred Kennedy, the co-head of esports at Riot Games, to discuss the world championship (the finals will take place Nov. 4 at the Bird’s Nest National Stadium in Beijing) as well as the overall growth of the esports industry and Riot’s plans, much like rival Activision Blizzard, to remodel its own esports league after major professional sports leagues like the NFL and NBA.

The following conversation has been edited and condensed for clarity.

Fortune: What are some of the big storylines fans will be following heading into the quarterfinals of the LoL World Championships this weekend?

Kennedy: Where to begin? We’ve got some great teams that have made it through. Lots of regions are still alive. You’ve got your defending champions, SK Telecom T1, where they always are, which is contending. But, you’ve got teams that are potentially going to give them a run for their money. I think if [Chinese team] Royal Never Give Up and SK Telecom T1 wind up meeting in the semifinals in Shanghai that could be incredible. Honestly, any of the match-ups with the teams we have right now are going to be really fun to watch, because they’ve all proven themselves to get to this stage. And, the competition just keeps getting better and better the deeper we get into the tournament. That’s one of the reasons that worlds is so compelling.

How has the media rights aspect of the esports business expanded in recent years for Riot?

I think what you’re seeing is the maturation of our sport. With esports, I wouldn’t say it’s entered the mainstream, but it is increasingly an option that marketers look to. And, that’s great for us, because what we’re trying to do is build up the overall ecosystem, and having those increases in revenue coming in on that side allows us to invest in the professional players, the teams, and it allows these players to make a career out of this in a really meaningful way.

That leads into the bigger question of the esports industry’s overall growth trajectory. What are the areas of business that you think are most ripe for increasing revenue in the industry?

There are lots of different pools of revenue. Big ones would include media rights, which not unlike the NFL, NBA, or the Premier League, media rights are a large driver. For some games, including ours, there’s in-game content, and that’s something that’s unique to esports, as opposed to stick-and-ball or traditional sports, where there’s an opportunity for teams to participate in some of the in-game revenue streams. I think those are probably the biggest ones, but we’re always on the lookout for new ways to engage with fans of our sport.

You used to work at Sony Pictures Television. Would it benefit esports to make that leap to being more of a presence on traditional TV networks?

We don’t feel the need to go to TV as a point of validation. We’ve found that a lot of our fans of this sport are online, they tend to consume digitally, and thus the BAMTech deal and some other things we’ve done—negotiations with Twitch, YouTube, etc.—is just to serve them where they are. But, we’re not looking to be on NBC at 8 p.m. on a Saturday broadcasting to all of America, because we don’t think that’s where our fans want to watch, and we think it would probably be casting too wide of a net.

Why model Riot Games’ North American League of Legends Championship Series league after major professional sports leagues with revenue-sharing and a players association?

We’ve always looked at professional sports, not because we want to model exactly what other sports do, but even when you’re attempting to innovate, sometimes there are things that already exist in the world that work really well and work for a reason, and we shouldn’t be afraid to use some of that. Our goal is to have sophisticated owners of teams that can operate at a high level, know how to build businesses, know how to build sports, and who aren’t going to be working against each other, but are going to be collaborating in the best interests of fans around the world.

Going back to your point about esports not yet being in the mainstream, what needs to happen to put esports on the same level as one of the major professional sports leagues?

It takes time to get to the scale of where major sports are today, and I don’t think we have any illusions that we’re going to be able to do that overnight. We do have the advantage of being a digital property that tends to grow faster and can grow more virally. Friends tend to bring their friends into the sport, we found. We’re looking to build the best ecosystem for our fans that we can and we hope that by doing that it will thrive and grow, and over time we’ll have a chance to be as big as some of the major sports that exist today. But our primary goal is delivering value to fans day in and day out. And, if we can do that, then the rest will take care of itself.


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ComplianceMate Returns to National Restaurant Association Show in 2017…
August 18, 2017 3:05 am|Comments (0)

CM Systems, LLC known for its industry-leading ComplianceMate temperature-tracking and food safety technology, will return to the 2017 National Restaurant Association (NRA) Show from May 20-23, 2017…

(PRWeb May 20, 2017)

Read the full story at http://www.prweb.com/releases/2017/05/prweb14355746.htm

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ComplianceMate Returns to National Restaurant Association Show in 2017…
August 17, 2017 12:35 am|Comments (0)

CM Systems, LLC known for its industry-leading ComplianceMate temperature-tracking and food safety technology, will return to the 2017 National Restaurant Association (NRA) Show from May 20-23, 2017…

(PRWeb May 20, 2017)

Read the full story at http://www.prweb.com/releases/2017/05/prweb14355746.htm


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United States Cloud Computing Stack Layers Market Present Scenario and Growth Prospects 2017
July 30, 2017 10:20 pm|Comments (0)

“United States Cloud Computing Stack Layers Market Professional Survey Report 2017” Purchase This Report by calling ResearchnReports.com at …


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