According to a report by independent journalist and former ESPN writer, Jacob Wolf, the teams of the Overwatch and Call of Duty Leagues owe Activision Blizzard up to $420 million in deferred payments.
The Overwatch League has been a critical project for Blizzard since the game's inception. In contrast to other esports organizations, the League was designed with a traditional sport's ownership system in mind, with privately-owned teams associated with specific cities like the formerly Kraft family-owned Boston Uprising or the Houston Outlaws, who are owned by the Beasley Media Group. Activision Blizzard has also attempted to replicate the system with a Call of Duty League.
New franchises entering the Overwatch League faced buy-in costs north of $20 million in addition to yearly fees for participation, but Activision Blizzard suspended these payments with the onset of Covid-19, with repayment expected in fall 2022. According to Wolf's sources, Overwatch and Call of Duty League franchises still owe the company millions of dollars each in these unpaid dues, totaling between $390 and $420 million across both leagues.
Activision Blizzard isn't exactly in the strongest position to collect. The high cost of entry has made it difficult for the company to secure investors in franchise expansions, and it also seems to be struggling to hold on to current owners. Robert Kraft, owner of the New England Patriots, seems to have been persuaded by Bobby Kotick himself to invest in the Boston Uprising as a founding owner of the League. The Kraft family has since shifted much of the ownership burden to the Oxygen Esports group.
Activision Blizzard has also struggled with retaining advertising sponsors since the eruption of its workplace harassment scandal, with companies like Coca-Cola and State Farm pulling their support late last year. Ahead of the launch of its fifth season this spring, the League was scrambling to secure sponsors. Additionally, the tepid response to Call of Duty Vanguard and Overwatch 2 (Overwatch 1.25?)'s first public look leaves me doubtful that Activision Blizzard will be able to revive the boom times of the circa-2018 Overwatch League any time soon. It may behoove Activision Blizzard to continue to accommodate franchise owners if it wants to hold the leagues together through this rough patch.
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