OWL and CDL Franchise Fees Could Be Reduced
The franchise fees for both the OWL and CDL are bonkers. With the price structure, it’s only the largest wallets have access to. Up-and-coming teams have virtually no chance of joining. It just feels like a way to milk as much money out of a team/area as possible to lockdown a territory. We appreciate the way they wanted to make it feel more like traditional sports. This talk comes from The Esports Observer and states that Activision Blizzard reduces the amount OWL and CDL will owe for franchise fees. Is this a good idea? You bet it is.
$20 Million Is Too Much
The city model isn’t the worst idea. To treat esports more like traditional sports, but it is unique, groundbreaking. But to have the first 12 teams need $20 million and $30-$60 million for the next eight? That is bonkers money. That was for Overwatch. The Call of Duty League had 12 teams need to fork over at least $25 million. The bigger cities had to pay even more money.
The franchise fees for both OWL and CDL make no sense. We understand franchise fees as a concept, but to have to throw that kind of money around to have a team in a league and try to make a few million back feels like a bad investment. When you also consider COVID-19, teams are trying to cut costs wherever possible. There aren’t going to be live events or travel any time soon.
The leagues aren’t getting bigger, and even the OWL is starting later. Reportedly, this decision seems to come from Tony Petitti, Activision’s new senior executive. We discussed this previously, wondering if it was a mistake to bring a former MBL exec over to esports. It seems Activision realizes that city-based events are not going to be profitable anytime soon, thanks to COVID.
Some of these teams could see the investment is no longer worth it and decide to pull out, which could again start a chain reaction. We don’t want to see either the OWL or CDL fail, so lowering the franchise fees across both games is a smart decision.
As to what is being discussed, The Esports Observer‘s Adam Stern suggests,” one idea that is being weighed is reducing the amount of money they owe to the video game maker,” and we could believe this coming to pass.
The actual money coming in from these leagues isn’t known, but Forbes reported that John Robinson, president and chief operating officer at 100 Thieves, suggests that franchise values hold up. It sounds like money is made somehow. Despite that, 100 Thieves still acquired Immortals Gaming Club’s CDL spot. It’s rumored that Immortals may want to drop out of the OWL too. Is this a bid to keep more teams from trying to get out? If they can cut the costs and make the orgs happy, they may be more inclined to stick around and try to get their money’s worth out of the teams they own.
We’ll be keeping an eye on this situation as it develops, as we would hate to see the OWL or CDL crumble thanks to monetary concerns. It would be an unfortunate situation to see a group of teams decide it’s no longer worth it. Get to talking, Activision!