As the 2022 Winter X Games begin in Aspen, news of the action sports juggernaut’s sale begs intriguing questions about its future when considering its past.
It’s June in Austin, Texas and Kanye West is about to take the stage.
As the sun sets and the temperature dips beneath 90, Virgil Abloh eyes the modified Yeezus stage set in a pair of Golden Goose sneakers, making sure the mountain is perfectly placed in the aftermath of a memorable Mac Miller set.
No, this is not Austin City Limits or South by Southwest. Rather, this is the Summer X Games Festival held at Austin’s then-new Circuit of the Americas race track.
In 2014, the extreme sports spectacular relocated its summer event to Austin, Texas in what seemed like a perfect play. Moving the X Games to an emerging city with a rich history of embracing the alternative and celebrating live music, the repackaged X Games Festival was positioned as a multi-day event that showcased the biggest names in skateboarding, BMX, entertainment, and beyond.
However, the run of this relocation was short-lived.
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Austin, a city with much of its charm arising from its centralized layout, had built its Formula 1 track miles away from downtown proper near its international airport. While a 40-minute commute to a live event is nothing new in major metropolitan cities like Los Angeles or New York, it’s an eternity for the capital of Texas and a barrier to entry for many.
Just the same, a packed outdoor event set on a race track in the early months of summer was far hotter than some could handle. Even with 160,000 fans in attendance that June in Austin, one had to wonder: would the bulk of the fans return the next year for Nyjah Huston, or were they simply there for Kanye?
In only a few years, the Summer X Games switched cities to the cooler climate of Minneapolis, proving yet another unexpected pivot for the continuously evolving event predicated on the wild, bold and unexpected.
The Rise of X
Over the course of its rich history, the X Games have changed states.
Both literally and metaphorically.
Since originating in 1995, the extreme sporting showcase has hosted a summer component annually — the Winter X Games began two years later — first in Rhode Island and Vermont before venturing up and down the coast of California, into the mountains of Aspen, and even overseas in Sydney and Shanghai.
The international appeal of sports like skateboarding, surfing, and snowboarding increased the reach and frequency of the X Games in the ’00s and ’10s. COVID-19 put up a damper on things in 2020 and ’21, but activities look to pick back up with the 2022 Winter X Games, which begin Friday in Aspen with coverage on ESPN and ABC. Right on its heels, the Summer X Games are currently scheduled to go down in Japan this April.
Both events run effectively parallel to the Olympic Games, which have increasingly come to embrace extreme sports in their winter and summer forms.
The X Games itself were the brainchild of management at ESPN, first ideated in 1993 as an international event devoted to action sports. By 1995 it was off the ground, hosting everything from skateboarding to bungy jumping with advertising backers such as Nike, Advil, Taco Bell, and Mountain Dew on board.
Between an attendance of 198,000 spectators and a slew of spending sponsors, ESPN quickly decided to make the X Games an annual event, opting in relatively short order to add Winter X to the equation as well.
Heading into the new millennium, year-over-year attendance continued to increase. By 2001, ESPN was leaning into lifestyle and convergence culture by hosting the Action Sports and Music Awards in Los Angeles while also partnering with The Mills Corporation for a licensing agreement to build X Games Skateparks across the country.
Throughout the 2000s, the X Games spread their reach into film, theme parks, and video games. Growth in attendance and events in new markets continued, with the 2009 summer event seeing 112,000 fans in attendance and TV viewership of almost 44 million across ABC and ESPN networks.
Over the course of the 2010s, the X Games came to consider growth on emerging social media platforms and YouTube views as their most important metrics while famously changing locations for their summer celebration. While this was clearly where the eyeballs were going, some wondered if the event was losing its luster.
In January 2021, reports surfaced that ESPN owner Disney was shopping around the X Games franchise. According to The Information and Forbes, two scenarios pointed to Mickey Mouse either selling the broadcast rights to the X Games while continuing to handle production or selling the IP attached to the event.
“The Olympics has historically provided a boost to X Games’ digital audience,” Michelle Bruton wrote for Forbes in 2021. “With the Beijing 2022 Games set for next January, a potential buyer for the franchise may keep that in mind. “
Early estimates suggested a deal worth $100 million for the broadcast rights, while the IP sale was said to net around $50 million.
By the end of 2021, the much-anticipated X Games sale was yet to go down, with media-savvy investor Sahil Bloom making waves by announcing the idea of forming a DAO to purchase the extreme sports spectacular.
While Web3 taking over the legacy ESPN event was exciting, a new suitor quickly came in.
2022 & Beyond
As alluded by Forbes’ Bruton in 2021, the traction tied to the 2022 Winter Olympics timed out perfectly with the eventual acquisition of the X Games.
In news first broken by Sportico, an investment group led by The Najafi Companies (TNC) and MSP Sports Capital signed a letter of intent to purchase the X Games in January of 2022.
Both firms are founded by Jahm Najafi, vice-chair of the Phoenix Suns, sharing a common interest in the business of sports. TNC specifically brings a background of media, tech, and e-commerce experience, all boding well for the event that’s since touched the worlds of film, apparel, video games, and more.
While adjacent revenue streams have always been in play for the X Games, it’s with the streaming rights that revenue is likely most concerned in this sale.
With ESPN and other cable giants taking a hit amidst the mass migration to streaming services, experts expect the X Games to live larger on YouTube and social platforms in regard to viewership via a younger demographic, somewhat similarly to the NBA.
How this year’s Winter X Games performs on streaming and social may not be the best indicator given that the deal won’t be done by the start date. Moreover, the importance assigned to February’s 2022 Winter Olympics in Beijing will likely see big names such as Chloe Kim and Shaun White sitting out of Aspen X Games activities.
Still, the extreme sports spectacular has the ability to penetrate new platforms in new ways. Famously, ESPN introduced drone coverage to the event in 2015. With TNC and MSP acquiring the X Games in a world of Oculus and metaversal immersion, the options are endless for how fans can consume both winter and summer events.
Just the same, the X Games are less tied to the ‘when’ component. Unlike playoff games or tournaments tied to major team sports, the X Games loses little cache when re-aired or repurposed. The fluidity of the X Games makes it more malleable than its peers, but also less of a must-watch in the moment event.
At this time, the 2022 Summer X Games are set to take place in Chiba, Japan in April. Coming off the heels of skateboarding’s Olympic debut in 2021 in Tokyo, one has to wonder just what kind of spike we’re in for — or not — at the Summer X Games.
From a cultural perspective, it’s tough to assess just how popular skateboarding is since its rampant rise in the US at the turn of the millennium. Understandably, the X Games played a major part in the sport’s mainstream crossover. However, a universally visible figurehead like Tony Hawk in that same era raised the tide for all ships aligned with extreme sports at that time.
One could argue that the category as a whole does not have that same kind of elite-tier box office star.
Perhaps the new owners of the X Games will follow the F1 formula of creating engagement and interest through a Netflix series, selling the storylines and personalities of extreme athletes to create a connection with a mass audience rather just relying on their inordinate level of talent and guts.
Regardless, it appears the X Games are finally entering their post-ESPN era. What’s next will almost undoubtedly be digital, but just how dynamically they extend their appeal outside the world of sports remains to be seen.
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