Activision Blizzard is "struggling to sign franchises" to its yet-to-launch "Overwatch" league because the "asking price is too high," according to industry sources cited by Jacob Wolf of ESPN.com. Sources said that video game publisher is asking for a $20M franchise fee, with prices "escalating from there in larger markets" such as N.Y. and L.A. However, following the $20M buy-in, teams are "not guaranteed revenue sharing" until after '21 and only if Blizzard "meets certain criteria that sources did not disclose."Additionally, sources said that if a team "sells its spot to another party," the league would receive 25% of the proceeds. Sources added that while the price remains the "sticking point" for many, the "Overwatch" game itself and Activision Blizzard league are "still desirable to teams." Meanwhile, a source said that Patriots Owner Robert Kraft has a "handshake deal" for an franchise in the esports league, and the deal "includes a most favored nation agreement that allows the Kraft Group to buy in at the most favorable price given to another organization." Wolf noted several organizations recently have "pulled back from fielding 'Overwatch' teams in other leagues" (ESPN.com, 5/10).
PRICE POINT TOO HIGH? ESPORTS OBSERVER's Ferguson Mitchell writes the "Overwatch" league is "definitely one of the hottest topics in esports this year," and the "hype is reaching a fever pitch." A recent report from Morgan Stanley projects Activision Blizzard "should net" around $100M in annual revenue from the league, and that figure could grow to $720M "if the league really takes off." But for comparison, a franchise fee in Riot Games' "League of Legends" Championship Series, which is the "most popular esports league in the world," cost just $1.8M in December. Spots in the Take Two’s upcoming NBA 2K League are "selling for $750,000, and guarantee a three-year commitment." A franchise fee of $20M or higher is "absolutely unprecedented, and it’s no wonder that experienced esports minds are pulling out, given Overwatch‘s completely unproven status." The "exclusion of endemic esports teams" could "very well threaten the league’s very existence" (ESPORTSOBSERVER.com, 5/11).
