Pacers Gaming Has Got Next

Kelly Krauskopf should be wringing her hands. But instead, she’s teaching me to shoot a basketball in a video game. Just months away from launching one of the most drastically different pro sports franchises of all time, she has found a precious hour to take an Xbox break. In her defense, this is part of marketing the new Pacers Gaming enterprise that she’s in charge of, but given her workload, she could have delegated the crash course on NBA 2K18, the video game her new team will play competitively starting in May. Even weirder, the 56-year-old executive is into this. She mutters “go, go, go” under her breath when my player gets the ball, and blurts out “Hit X! Hit X!” when I should shoot. My avatar nonsensically leaps around instead. When Krauskopf gets the controller, though, her player, K-Deuce, makes crisp passes and cuts to the hoop. “That was my new turbo layup,” she brags after scoring. “And I got a foul, too.” K-Deuce can play—and likes to talk smack.

She jokes around with her 27-year-old operations director, Cody Parrent. He recently taught her a crossover 360 layup in the game. There doesn’t seem to be a generational gap between these two. They sort of selected each other to work with on Pacers Gaming—technically Krauskopf hired him, but as an NBA 2K expert, Parrent had his pick of bosses in the new league.

Their May–December dynamic is one of the reasons you’ll want to pay attention to the Pacers Gaming draft this month, even if watching esports sounds less appealing than taking an ice bath every night.

In just a couple of months, the new Pacers team will tip off under Krauskopf’s watch. The franchise—esports, or video gaming—is unlike anything ever attempted in pro sports. Literally no one in the world has done what she is about to do. She still doesn’t have a team in place, right now, two months from the first jump ball. And when she and Parrent finally get a team, it’s likely to be a bunch of 20-something gamers in the spotlight for the first time, a far cry from the gold-standard Fever athletes Krauskopf is used to managing.

Krauskopf built the Fever into the model WNBA franchise from its very beginning in 1999. Now she’s attempting the same with Pacers Gaming, so she knows exactly what has to be done. There are sponsorships to line up, a training facility to build out, a team handbook to write, video-game equipment to test, a social media manager to hire, marketing materials to create, team housing to arrange, a draft to oversee.

She’s got all of this under control, and she knows it. Not only is she a pro, she’s good under pressure. She was in Hawaii in January when the false missile alert was sent, and calmly returned to her condo and began assessing the situation: We have to get water. We have to get fire. What if we lose power? “I don’t flip out in a crisis,” she says. “I get really calm, really methodical.”

Still, while she certainly isn’t in crisis mode at Bankers Life, neither is this a false alarm. It’s the Pacers’ leap into a very real future of somewhat
artificial basketball.

The new Pacers franchise will be built around the talents of six NBA 2K gamers. More than 50,000 passed an initial league-wide competition in January. Only 102 players will be drafted.

While you were bingeing Orange Is the New Black and obsessing over the 2016 election, video gaming became a legit spectator sport. People watch other people play video games on an expert level. Did you ever cheer on your buddy playing Super Mario Bros. as he rescued the princess? Now that dynamic plays out on a much bigger scale, worldwide, online and occasionally in arenas, and there’s money in it. Billions. Game streaming has a bigger audience than Netflix, Hulu, HBO, and ESPN—combined. These days, if an organization wants to reach a younger demo—necessary for survival—it has to do it at least partly through esports.

The most popular video games involve strategy or shooting, but they are still called esports. And the players are accepted as athletes, but I submit for consideration the term ethletes, just to avoid arguing over the obvious—that gaming does not require Serena Williams’s physical gifts.

There are a few esports leagues and a bazillion tournaments, but the industry is pretty fragmented. So far, it has been run mostly by the game publishers.
A few independent leagues have cropped up. But the organization is starting to become mainstream. Colleges have scholarship ethletes now. The sports world speculates that gaming will enter the Olympics in 2024 as a medal-winning sport.

Pro sports leagues are rushing to get into gaming, but none have made the investment—or the splash—that the NBA has with the NBA 2K League, a sibling to the NBA and WNBA. The game NBA 2K has sold more than 70 million copies and has about 1.6 million users every day. In China alone, there are 34 million registered users. Some NBA, NFL, and NHL owners have been investing in esports for a while (Mark Cuban, who owns the Dallas Mavericks, anted up for an esports betting outfit a few years ago, for instance), but the NBA 2K League is the first to bring the expertise and business model of traditional pro sports to the gaming world. The first season will run May through August. The NBA invited all 30 franchises to create a team, and 17 of them said yes to the inaugural stint. More are expected to join next year.

Indy’s team is called Pacers Gaming. Not Indiana Pacers Gaming. None of the 17 teams retain their geographic location. The whole point of the league, besides attracting a younger audience, is to increase the NBA’s global footprint.

Why do the Pacers need an audience overseas? Money. Growth. For all major American sports, the biggest expansion potential is international, and gaming is a fairly cheap way to export a brand. The Pacers already have a fan base in China, the Philippines, the United Kingdom, and elsewhere. That turns into dollars for Pacers Sports & Entertainment and, in turn, Indianapolis when a group books Bankers Life as the venue for its international event. PS&E president Rick Fuson has heard of a young man outside of London who has tattoos of Reggie Miller and George McGinnis. “There’s going to be a young man or young woman who today is a gamer in China, India, Indiana, California,” Fuson says, “who’s going to be the CEO of some international or national company, who will hopefully remember that when they were starting out, there was some positive thing they knew about Indiana. You may think it’s a reach, but it happens all the time.”

For now, the NBA 2K League franchises are focused on the draft. Each team will choose six players from a pool of 102, who qualified by winning 50 games in January (more than 50,000 players made the cut), then impressed scouts over a 40-game combine in February.

Players can be men or women and live anywhere in the world, but they will move to the city that drafts them. They will practice at their home facility—the Pacers have built out a sweet training room and lounge area in Bankers Life for the Gaming team. On weekends, all of the teams will travel to a location-
neutral studio and play games, which will be streamed online. As of press time, the streaming partner had yet to be determined, but there are options. The biggest existing platform is Amazon’s Twitch, but ESPN has streamed esports, and Facebook Watch recently launched as a streaming platform.

The teams will sit in special gaming chairs in front of monitors and play a version of NBA 2K developed for the league. Games are comprised of four six-minute quarters. Two opponents might sit across from one another, within trash-talking earshot. Revenue will come from sponsorships and commercials.

Is it starting to make sense?

It might not matter. If you’re reading this magazine, you’re not the league’s demo. Which is probably fine with you—you might wish you hadn’t lived to see esports happen, like self-driving cars and Bitcoin. But if anyone can make you care about watching animated digital basketball on your iPhone, it’s the Pacers’ front-office powerhouse, Kelly Krauskopf.

2K Games developed a special version of its basketball video game for the NBA’s new league.

Krauskopf grew up in Corpus Christi, Texas, and learned to love basketball from her older brother. In the seventh grade, her school’s basketball coach didn’t think she would make the team. So Krauskopf practiced every day, and come fall, she started a lifelong pattern of proving people wrong. When the NCAA incorporated women’s sports in 1982, Krauskopf was a senior team captain on scholarship for Texas A&M’s women’s basketball team. But there was no glamour in the game. “We’d buy our own travel bags at JCPenney,” she says.

Professionally, Krauskopf discovered that she’s the type to charge headlong into a challenge when she became Texas A&M’s assistant athletic director. In one of her first jobs, she was in charge of women’s sports, which meant nearly free rein to do whatever she wanted. “The athletic director actually told us that,” she says. “He was like, ‘I don’t really care what you do. Just don’t bother me.’” No one expected her to sell tickets—hardly anyone charged admission for women’s sports in the 1980s—so of course, before long, she busted up that old rule. One day, the athletic director at the University of Texas called to say 13 busloads of fans were coming to the women’s game against A&M; UT’s team was an exception with a rabid fan base. The AD asked how much tickets cost. Krauskopf made up a number: $10. Eventually she worked her way into sports marketing, where she crossed paths with Val Ackerman, who became the first president of the WNBA. Ackerman chose Krauskopf as her director of basketball operations.

After a few years, Krauskopf was ready to lead a WNBA franchise. Miami, Portland, and Seattle topped her list—all attractive places to live. But colleagues said that Indiana had the best ownership. She had never been to Indiana but took the job of Fever chief operating officer anyway before the team had a name, logo, or colors, and Donnie Walsh mentored her. After two years, Krauskopf made her first big move: drafting an injured Tamika Catchings in 2001. Two teams passed on the Tennessee star because she wouldn’t be ready to play for another year. But Krauskopf saw a franchise player—with the character to match her abilities.

The Fever became a model organization, making eight consecutive playoffs and upsetting the powerhouse Minnesota Lynx for a championship in 2012. Catchings, like Reggie Miller, played her entire career in an Indiana jersey. The team sits in the middle of the WNBA for attendance, but has the reputation of an elite operation under a well-known, likable, and wise executive. As a member of USA Basketball, Krauskopf helped select the Olympic women’s basketball team that won the gold medal in 2004, 2008, and 2012—the year in which she was promoted to Fever president. Despite middling ticket sales (“Year 20 in the WNBA is just as tough as Year One,” she says), Krauskopf is known as a marketing whiz. Early on in the WNBA, the New York Liberty decided to stage a promotional game outdoors in the city—getting back to the game’s roots, and all. Krauskopf made sure the Fever was part of the event as the Liberty’s opponent. But she didn’t stop there. She had an outdoor practice court built on the top level of the Bankers Life parking garage and invited fans to watch the Fever train.

A few years ago, Krauskopf started hearing about esports and researching it on her own. New things excite her. She doesn’t bemoan esports as an erosion of the game she loves. “I can get bored. If you stop learning, you’re through. I’m naturally inquisitive,” she says. In esports, she saw tremendous business potential as well as her other passion, providing opportunities for girls. “The impact on women and girls is the most powerful part of the job,” says Krauskopf, who has sat on the boards of the Women’s Fund of Central Indiana, the Patachou Foundation, and the United Way. “I am a firm believer that opportunities for girls start with ‘seeing it’—once a girl sees a female leader in a nontraditional role, she starts believing that this can be an opportunity for her, too.” A game controller is gender-neutral.

Krauskopf sought the input of colleagues who had gotten involved in esports, like Wizards team owner Ted Leonsis. She watched the topic closely in trade publications. It became clear that “the toothpaste was not going back in the tube,” she says. When Fuson announced the creation of Pacers Gaming last year—“the next generation of basketball fans are playing 2K,” he says—Krauskopf immediately said she wanted to run it, and Fuson immediately said yes. K-Deuce was born.

Few people know the 2K community as well as Cody Parrent, operations director for Pacers Gaming.

For all of Krauskopf’s curiosity about this new type of basketball, for her and the Pacers, the whole point is to win. That part of the sport hasn’t changed. She’s motivated not just by the challenge of shaping the world’s first pro esports league, but also by earning the first fake confetti shower in August as the NBA 2K League champion.

Krauskopf is off to a good start. Parrent is her Tamika. When he came to interview, Parrent was auditioning her and the Pacers as much as the other way around. As the co-creator of NBA2KLab, a data-analytics company, he is one of the game’s few experts. Still, Krauskopf impressed him. “She knew, first of all, what League of Legends even was, what World of Warcraft was, what some of the big tournament names were,” Parrent says. “She had done her research, and she was so enthusiastic to be involved that I was shocked. From a mentor standpoint, couldn’t ask for better. She knows how to set up a franchise.”

Parrent was ready to come home to Indiana, where he grew up in Evansville as a Pacers fan and got an MBA from the University of Southern Indiana. He had been living in Los Angeles running NBA2KLab, which offers subscribers secrets to mastering the game. Parrent and his business partners figured out how to maximize “attributes,” or available skills. That’s the simple way of putting it. In reality, it’s an incredibly deep dive into the back end of the game. For instance, he and his partners learned when to release the ball on each of the thousands of possible jump shots, down to the millisecond. Every serious NBA 2K player knows Cody Parrent.

More important, he knows them. “Very well,” actually, he says. “There are people who have left full-time jobs and who are putting college on hold to try out for this league.” He’ll draft the Pacers Gaming squad this month, looking for players with excellent “stick skills,” competitive fire, and—well, stuff you probably won’t understand, like a high percentage of “green releases.”

Parrent is a big reason why Krauskopf isn’t fretting over the launch of the league (she calls him her “reverse intern”), and vice versa. They know there’s a lot to figure out in a short time, much of which has to be decided by the league before they can move forward, but also believe they’re the best people to do it. “This is what we do, build sports franchises,” says Krauskopf. “The NBA does it better than anyone in the world.”

Their biggest challenge will be whipping the team into merely competitive shape, if not championship caliber, once the players settle here and start training. First, the players will have to get used to treating this like a job, showing up in the morning for physical conditioning (yes, like a real athlete) in order to balance out hours of screen time. They will need media training. They will have to learn aspects of traditional basketball that they haven’t needed to rule NBA 2K.

It helps that Parrent knows many of the NBA 2K players personally and can factor character and professionalism into his draft picks. But it’s hard to say whether those attributes will trump marketability and stick skills in the league’s first year. It’s also a question mark how the fans will respond to the league. Will they remain loyal to their favorite players from NBA 2K tournaments online, or will the league’s social media might reshuffle the pecking order? Will the best-skilled players have star power or prove to be too average for endorsements? Will games attract enough of an audience across multiple time zones to satisfy sponsors?

Not even Parrent has those answers.

With billions at stake, game streaming isn’t the future of professional sports—it’s the present.

You might think that no matter how great Krauskopf, Parrent, and the Pacers organization are, their esports effort is doomed because NBA 2K isn’t real basketball. Not the way Hoosiers think of basketball. For one, the entertainment factor is nothing like attending an NBA game. There’s no such thing as a bad call—the game itself calls the fouls, and it’s the final word. There will be human heroics and errors, but it’s nearly impossible to appreciate the stick skills that create them unless you play the game. You might find yourself soul-searching about why it matters that a machine is involved in sports, an 11th player, AI, on the court at all times. It won’t let the players improvise up to their physical limits. They run into the boundaries of technology first.

But NBA 2K is basketball enough for the generations who have grown up with esports, its target demo. And it might be enough to entertain older people who play basketball in real life, too, just as it has captured Krauskopf’s affection. It’s not for casual basketball viewers because there is simultaneously too much and not enough happening on court to entertain them: too much in the sense that there are a lot of unfamiliar video-game symbols on screen, and not enough because the players move slightly unnaturally and their personalities aren’t developed. For example, when Krauskopf and I played NBA 2K18—the commercial version of the game—during one of our interviews, she marveled over the accuracy of fake Lance Stephenson’s body language. “This is basketball,” she says earnestly. Maybe. But Lance Stephenson will never blow in LeBron’s ear in NBA 2K.

Still, when you strip away most of the theatrics of the NBA, you’re left with perhaps a very pure form of basketball. There are crisp, creative passes. Athletic rebounds. Smart decisions. Thrilling 3-pointers and sweet spin moves. And dunks, of course. And even though the game could technically allow a player to double-backflip into a dunk, it doesn’t. It respects basketball.

So does the Pacers Gaming team. What more could good Hoosiers want?