Several Sports Brands Rethinking Interest In OWL

It seemed to be a good week for Activision Blizzard with an ESPN report from esports insider Jacob Wolf stating that several big brands had committed to the Overwatch League. After this publication revealed that the New England Patriots owner Robert Kraft had verbally agreed to purchase a franchise in the league, speculation has been rife about which names are going to follow. ESPN revealed that Sterling Equities, the company behind the New York Mets, as well as endemic esports organisations Immortals and NRG have agreed huge deals to secure desirable geographical locations in the United States. The report states that Kraft Sports Group has been guaranteed the Boston territory, Sterling Equities will own New York, Immortals will pay $20 million to secure Los Angeles and NRG will secure San Francisco for the same buy-in. The report also stated that Seoul and Shanghai had also been secured but revealed no further details.

For many the report will validate that the league, despite being an unproven concept, is going to be able to command these huge buy-ins from sports organisations. Many endemic esports organisations have already withdrawn Overwatch League teams due to a lack of communication about the leagues plans and the high price of franchise slots. It is worth noting that the two endemic esports organisations named above are funded by large venture capital companies and already have existing sports personalities associated with them. The timing of Riot Games announcement that franchise slots in their already stable LCS league will sell for $10 million also has many comparing the two potential investments, with Blizzard’s proposition coming a poor second.

Following the ESPN report this publication was contacted by several sources who have been involved with negotiations for the league to inform us that there is skepticism among sports organisations too. Several large sports brands have told Activision Blizzard they are not willing to commit to such high buy-ins unless they can clarify what the return of investment will actually be. This uncertainty was compounded by a muddy Morgan-Stanley report that makes comparisons between OWL and decades old sports properties as well as proposals from the developer such as 25% of any future franchise sales price going to them.

In addition to this there comes a new development that has irritated those looking to purchase territories. Activision Blizzard have openly communicated to these brands their intention to run a similar league for their Call of Duty series. While still in the very early stages of planning the launch date could be as soon as six months after the Overwatch League becomes active. However, brands have been told that just because they control a territory for Overwatch does not guarantee them the same territory for a Call of Duty team should they choose to acquire one. With the prospect of having to buy in again for a separate endeavor many feel that the prospect of paying so much money for what would simply be the rights to an Overwatch team represents an incredibly poor return.

“Imagine the situation” one source told us. “You secure the city you want, create the brand, enter the Overwatch league and then all the Call of Duty fans in that area support a competitor because we didn’t want to pay millions more just to have that right. We’re not alone in thinking that is an awful deal. A deal of this size with a developer should be a mutually beneficial partnership.”

Further yet several have doubts about the way Activision Blizzard has handled sponsors for the league. One sizeable sponsor who has already done a handful of deals within esports was reputedly driven away after the size of the sponsorship kept being increased over a series of meetings. “The sponsor said that for the money Blizzard were asking they could have bought into the NFL” a source informed us “and Blizzard told them that this league will be bigger than the NFL. At that point they pulled out.”

All of these issues cast doubts about whether or not the league is going to be able to start in 2017 as had been proposed at the start of the year. The pre-season of Overwatch Contenders has already taken place with the first full season due to start in August. It seems that there might be a few more kinks to iron out before a start date for the main event can be announced