Activision Blizzard Suspends Multimillion-dollar Franchising Fees To Overwatch And Call Of Duty League Teams Amid COVID-19

Activision Blizzard Suspends Multimillion-dollar Franchising Fees To Overwatch And Call Of Duty League Teams Amid COVID-19
Credit: Overwatch League

Just when the Overwatch League started its homestand format and Call of Duty League begun, the world was shut down. From travel restrictions, city lockdowns, to social distancing and mandatory mask, 2020 has been unpleasant. With events on hold, the eSports divisions of all titles are specifically affected.

Reports have surfaced that the video game giant Activision Blizzard is taking steps to ensure stability to its franchise teams. The California-based company is supposedly offering financial relief to its OWL and CDL teams for this year. Economic analysts are expecting this move to start some normality to the leagues.

According to news, the multimillion-dollar franchising fee due this year will be deferred due to the ongoing crisis. The two FPS tournaments have to settle for the online format to keep the games going, instead of the eSports-first homestand matches.

Though both Activision Blizzard and the participating teams have provided limited information regarding this financial relief, Philadelphia Fusion president Tucker Roberts weighed in on the situation. “It’s a tough year for everybody,” he states while adding the league organizers made sure that support is available for the team owners.

The ambitious original plan was to hold matches at each team’s homestands. Much like how the NBA or NFL operates, the orgs will gather revenue from tickets, concessions, merch, sponsorships, and other sales-driven income. This structure would allow OWL and CDL teams to endorse their teams in their local markets while collecting event-specific revenue.

In July, financial advisors started voicing their opinions on how the World of Warcraft-developers can handle this unfortunate turn of events. One analyst suggests that delaying the franchise payment would go a long way for team owners and eSports teams. Much like any other business in these trying times, a cash burn can easily be consumed by these organizations. Though the live events are on halt, most players and coaches are still roofed under the same houses, utility expenses, food, and all other basic needs. A small consideration by Activision Blizzard would help these financiers a ton.

These franchising fees are a massive chunk of owners’ operating costs each year as it goes towards the initial buy-in for their flagship teams. It was reported back in the inaugural season of the Overwatch League that it costs $20 million to own a team. However, neither Blizzard nor did any of the organizations confirmed this dollar amount. For season two expansion teams, there were no reports on the initial agreed-upon cost. For Call of Duty League, the buy-in was set at a whopping $25 million each team.