Stan and Josh Kroenke have acquired the startup Overwatch League’s second L.A. franchise, and esports team Cloud9 has agreed to buy the league’s first London franchise. The new deals bring the league’s total confirmed charter membership to nine. The transactions expand the league to Europe for the first time, and brings a second team to the esports hotbed of Southern California. Terms of these deals are not known, but Activision Blizzard has been hoping to get $20M for each spot. “This means we now have representation in Europe, North America and Asia,” said Pete Vlastelica, President and CEO of Major League Gaming, the Activision Blizzard division that operates the league. “For us, the headline is this is the first truly global league in sports history. As well as the intrigue of having two teams in Los Angeles, we’re pretty proud of the announcement."
LIKELY ADDITIONS: The Kroenkes, who own the L.A. Rams, Denver Nuggets, Colorado Avalanche and Arsenal FC, were considered among the most likely figures in traditional sports to buy into Overwatch since Stan Kroenke met with Activision Blizzard CEO Bobby Kotick at last year’s BlizzCon convention. They have created KSE Esports to house the property, and will have to build a team from scratch. “Building communities around the best competitive experiences in the world is incredibly rewarding, and the Overwatch League offers the chance to create something special,” Josh Kroenke said. Cloud9 is in a far different spot. Founded in 2012, the organization is profitable, founder and CEO Jack Etienne said, and fields teams in Overwatch and nine other games. In March, Cloud9 took on outside investment from FunPlus Ventures, an investment arm of the Chinese videogame maker, along with a diverse group of backers including Dodgers co-owner Todd Boehly, Warriors co-Owner Chamath Palihapitiya, and Pro Football HOFer Joe Montana.
PAYMENT PLAN: To pay for the Overwatch franchise fee, Etienne said he expects to raise a new round from his existing backers and to pursue new partners. L.A.-based Cloud9 always wanted the London franchise, Etienne said, and was able to convince Activision Blizzard it has a fan base in the U.K. and experience operating there through European leagues and tournaments. “For me, it was just a fantastic opportunity to give London the team it deserves,” Etienne said. “This is a fan base we’ve got a long history with." Overwatch League play is scheduled to start by the end of 2017. Eventually, it hopes to sell 28 permanent franchises. ESPN has reported that Team EnVyUs has secured financing from Hersh Family Investments and will acquire the Austin-Dallas franchise, but that has not been independently confirmed.
