Activision Blizzard is officially announcing the sale of the first seven Overwatch League city-based team franchises, with New England Patriots owner Robert Kraft and New York Mets COO Jeff Wilpon among those buying into the new esports league.
Activision Blizzard had been seeking a $20 million franchise fee from Overwatch League team owners, with no revenue sharing until after 2021, ESPN has reported. (The company declined to discuss financial terms.) Blizzard Entertainment released the “Overwatch” multiplayer shooter title in May 2016, and it’s already attracted more than 30 million players, according to the company.
The Overwatch League, currently set to launch its first season before the end of 2017, is the first city-based pro esports league, with initial teams in the U.S. as well as China and Korea. Activision Blizzard expects to announce more teams for the league before the beginning of the first season, with the long-term goal of teams in the world’s 28 largest media markets.
“It’s the first league — ever — that’s global,” said Pete Vlastelica, CEO of Activision Blizzard’s Major League Gaming eSports division. “You’re going to have Shanghai playing San Francisco. Traditional sports leagues would love to have that.”
The first group of Overwatch League team owners are:
- Boston: Robert Kraft, chairman and CEO of the Kraft Group and the New England Patriots (Boston)
- New York: Jeff Wilpon, co-founder and partner of Sterling.VC and COO of the New York Mets
- Los Angeles: Noah Whinston, CEO of Immortals
- Miami-Orlando: Ben Spoont, CEO and co-founder of Misfits Gaming
- San Francisco: Andy Miller, chairman and founder of NRG Esports
- Shanghai: Chinese internet conglomerate NetEase
- Seoul: Kevin Chou, co-founder of mobile games studio Kabam
Kraft said he had been exploring the esports market for several years and has been “waiting for the right opportunity to enter.”
“The incredible global success of ‘Overwatch’ since its launch, coupled with the league’s meticulous focus on a structure and strategy that clearly represents the future of esports made this the obvious entry point for the Kraft Group,” Kraft said in a statement.
The “Overwatch” game narrative revolves around a diverse group of international heroes fighting for “an optimistic vision of the future, and the Overwatch League is an extension of that spirit” with its global reach, said Mike Morhaime, CEO and co-founder of Blizzard Entertainment.
However, out of the gate, the first Overwatch League (overwatchleague.com) regular-season matches will be played at an arena in the Los Angeles area. That’s because the team owners will need time to “develop their local venues for formal home and away play in future seasons,” according to Activision Blizzard. League games will be played each Thursday, Friday and Saturday.
Activision Blizzard has yet to provide details on the player-selection process for Overwatch League, which will feature six-on-six team play. Vlastelica said league will give pro gamers an opportunity to earn salaries and benefits, instead of depending solely on prize-pool payouts and sponsorship deals for income.
“This structure creates a lot of stability for the player community,” Vlastelica said. “The opportunity is to really build careers more along the lines of traditional sports.”
The company has not sealed TV or streaming distribution deals for Overwatch League at this point. But Vlastelica, formerly EVP of digital at Fox Sports before he joined MLG last fall, said there’s high demand from both traditional broadcasters and cable networks, as well as internet video players. “TV could certainly play a role in our distribution mix,” he said. “But esports has advantages in not being encumbered by the traditional pay-TV ecosystem.”
Activision Blizzard said it will give an equal share to each team owner of all league-wide net revenue generated through broadcast rights deals, advertising sales, and ticketing.
Overwatch League team owners will retain all local revenues generated through their home territory and venue up to a set amount each year; above that threshold, a percentage is split with the league’s shared revenue pool. In addition, teams will have a license to operate and monetize up to five amateur events in their home territory each year. Plus, 50% of the revenue from the sale of league-affiliated merchandise will be shared among all teams.
Nate Nanzer is the commissioner for Overwatch League, and was one of the key execs at Blizzard who developed Overwatch. He’s based at Blizzard Entertainment’s HQ in Irvine, Calif.
“Overwatch” was the fastest game title to top 30 million users in the history of Blizzard, whose other franchises include “World of Warcraft,” “Hearthstone,” “StarCraft” and “Heroes of the Storm.”
Pictured above: Overwatch World Cup held at BlizzCon 2016 in Anaheim, Calif., in November 2016