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Volume 26 No. 85

Esports

OverActive Media, the investment group behind the Toronto Defiant expansion team in Overwatch League, has acquired Splyce, the New York-based esports team previously backed in part by Delaware North. The deal now puts both the Defiant and Splyce’s new spot in Riot Games’ League of Legends European Championships under control of OverActive, making it one of just five companies to own permanent spots in both the OWL and LoL. Splyce and OverActive were already close business partners. OverActive led a $2.6M investment round in Splyce when it was still known as the Ledger Group, joining fellow investors First Serve Partners, Metta World Peace, Roman Harper and agent David Meltzer. Also, Splyce was on board with the Defiant as a 10% owner of the OWL franchise and operator of the team. The deal means Delaware North, which did have a large minority stake in Splyce, has exited its position in esports. Splyce Founder & CEO Marty Strenczewilk will remain on as Dir of Team Operations, overseeing the management of players, coaches and competitions for every team in the OverActive portfolio. Meanwhile, OverActive will continue to build out its nascent commercial organization. “We really aspire to build the Maple Leaf Sports and the Madison Square Garden of esports,” said OverActive President Chris Overholt. “We have a business model of exactly that."

COINCIDENTAL TIMING: The deal was finalized the day Splyce surprisingly was awarded one of the new permanent spots in the EU LoL circuit, but the acquisition was not tied to that process, Overholt said. “We actually already had a plan in place to acquire Splyce and make them part of the family. And the other opportunity kind of showed up in the process." Nevertheless, the EU franchise spot from Riot was a late curveball that required all the principles to work over the weekend to tweak the deal to reflect Splyce’s new asset. Terms were not disclosed, but the OWL and EU LoL spots required a combined $44.2M in fees. Strenczewilk declined to comment. 

For more coverage of the business of esports, visit our partners, esportsobserver.com.

Delaware North fully intends to return to esports at some point, CMO Todd Merry said Wednesday, despite plans to cash out of its position in Splyce. The concessionaire and Bruins owner was among the first traditional sports groups to make an esports play when it invested in N.Y.-based Splyce in February '17. But Splyce was sold to Toronto-based OverActive Media on Wednesday. OverActive Media in a statement said the acquisition will "eventually merge the shareholder base under OAM” and declined to elaborate. However, Merry said Delaware North wants cash, not shares in the newly-merged OverActive, and is trying to sell its shares to a fellow Splyce investor before the Splyce acquisition is finalized. Merry said in any case, the moves should not be seen as a rebuke of the esports industry by Delaware North. “We’re still very much interested in esports, and we’re talking to two different teams about investing now,” Merry said. “One is a long-term client of ours in the traditional sports world. We still want to be in esports, but we wanted more control, more of an ownership position, and we just didn’t get there with Splyce."

For more coverage of the business of esports, visit our partners, esportsobserver.com.

DC's new Entertainment and Sports Arena last weekend "rocked with a rambunctious, concert-like atmosphere" for Red Bull: Conquest, its inaugural esports event, but "no amount of smoke and lighting could disguise the thousands of empty seats in the arena constructed to accommodate a capacity crowd of 4,200," according to Tramel Raggs of the WASHINGTON POST. Official attendance numbers for the event were not made available, but Competition Dir Jimmy Nguyen said that the event "attracted about 200 participants, as well as 50 to 75 members of the growing fighting game community." The three-day "offered one-, two- and three-day passes, with prices ranging from $15 to $25." Event participants "paid a one-time fee of $25, which included a three-day spectator pass." Other major esports events last weekend "may have sapped some of the potential attendees." Additionally, fighting game events "tend to skew smaller in crowd size than more well-funded, game publisher-organized enterprises like Overwatch League or the League of Legends Championship Series" (WASHINGTONPOST.com, 11/20).

For more coverage of the business of esports, visit our partners, esportsobserver.com.