Sports: The Heart of the Overwatch League is Still Beating

01 Oct 2018

Sports: The Heart of the Overwatch League is Still Beating

“Basketball is not a sport. Basketball is a game. The NBA makes it a sport by wrapping structure and fanfare around it.”

Pete Vlastelica, Chief Executive of Esports at Activision Blizzard, said that in a recent interview with the New York Times.

This gets to the heart of it, doesn’t it?

Peruse the comments for any article on esports and you will eventually stumble across something like this: “While I’m open-minded about a lot of things, I think calling playing a video game a sport is a slap in the face to the tens of thousands of athletes who dedicate their lives and years of physical training to a particular sport.”

Photo Credit: Digital Trends

Which is sure to be followed by something like, “Esports athletes actually do dedicate a significant portion of their time toward physical and mental training in preparation for competition. They’re not just sitting in couches all day and playing games.”

Which is followed by, “When someone says, ‘I’m open-minded about a lot of things…’ it’s always followed by something ignorant and closed minded.”

By that time, the whole comments section has veered wildly away from the original topic of the article because … the internet (and if those above comments seem weirdly on point, you caught me, they’re slightly modified versions pulled from an esports-related article).

The sport/not a sport debate is relevant, though. Ultimately, it all comes down to Vlastelica’s point: that the structure and fanfare are just as important as the game itself. Is it that the struggle of players competing against one another makes it a game, while the spectacle and visceral thrill of the observers makes it a sport?

That definition would seem to be the whole reason why the Overwatch League is structured with city-based franchises. It is a format that everyone can understand because it mirrors most traditional sports.

It is also a sharp departure from the way most esports leagues and tournaments were set up prior to the formation of the Overwatch League. For example, when the North American and European League of Legends Championship Series were created, both started out as a promotion and relegation system where the best-ranked teams from a lower division are promoted to a higher division while the worst-ranked teams in that higher division are relegated to the lower division.

Photo Credit: DingIt. TV

But as esports matured, these leagues began to notice an unwillingness of big-name investors and sponsors to finance teams that may not even be in the league from one year to the next. In response, both leagues pivoted to become a franchised league with team partnership agreements that will last for three years.

Activision Blizzard, Overwatch’s developer and the creator of the Overwatch League, clearly kept a close eye on the esports scene through the years (Blizzard is the developer of the massively popular StarCraft, a title that’s arguably the granddaddy of esports). It knew that it wanted regional, franchised teams from the start.

For the Overwatch League’s inaugural 2018 season, Activision Blizzard sold slots for 12 teams:

  • Boston Uprising
  • Dallas Fuel
  • Florida Mayhem
  • Houston Outlaws
  • London Spitfire
  • Los Angeles Gladiators
  • Los Angeles Valiant
  • New York Excelsior
  • Philadelphia Fusion
  • San Francisco Shock
  • Seoul Dynasty
  • Shanghai Dragons

The teams were purchased for roughly $20 million each (Activision Blizzard has not disclosed the actual financials) for a seven-year contract.

Photo Credit: Reddit

For the 2019 season, it was recently announced that eight additional teams are joining the league:

  • Atlanta, Georgia
  • Guangzhou, China
  • Vancouver, British Columbia
  • Hangzhou, China
  • Paris, France
  • Chengdu, China
  • Toronto, Ontario
  • Washington, D.C.

The purchase price for these new franchises was anywhere between $30 million to $60 million each (again, no specific financials have been disclosed).

The League now has 20 teams in total, and nearly half are from outside of the United States. Having the Overwatch League be a global venture was always a goal for Activision Blizzard. The ultimate objective is a total of 28 teams, which, at the current pace, may occur before the 2020 season starts.

That season, 2020, could be important to the League for another reason. Currently, all Overwatch League teams play their matches in the same 450-seat esports arena in Burbank, California (former home of “The Tonight Show with Johnny Carson”).

However, by the third season, the plan is to move all franchises to their home cities. The intent is that, with regional teams hosting events in their hometown, viewership and fan engagement will grow. In fact, since it is unlikely that the Chengdu, China team will travel to the Texas when it competes against the Dallas Fuel (and vice versa), it is possible that hometown fans will be able to witness every match in person if they wish to.

“Ultimately, to really be a force — to create the types of monetization that you’d like to have on a local basis, the team has to be in-market more regularly,” Jonathan Kraft, President of the Kraft Group, which owns the Boston Uprising franchise and also the New England Patriots, said to The Washington Post.

Photo Credit: The Esports Observer

Apparently, The Kraft Group was interested in investing in esports for some time, but the organization was never comfortable only acquiring essentially player contracts as opposed to a team franchise. It wasn’t until the Overwatch League that the group felt comfortable making the leap to invest.

It’s really not surprising. As owners of the New England Patriots, The Kraft Group was immediately able to grasp the structure of the Overwatch League. In fact, the first two franchises were purchased by organizations associated with traditional sports. The first was the Boston Uprising, and the second was the New York Excelsior, which was bought by Sterling.VC, a venture capital company associated with Jeff Wilpon, the Chief Operating Officer of the New York Mets and the son of the team’s principal owner.

Today, several of the teams have ownership ties with traditional sports. It’s reductive to say that the only reason these groups invested is because of the Overwatch League’s traditional sports-like structure, but it is also naive to think that it didn’t help.

There is another group that the Overwatch League is hoping its structure will help to attract: casual fans.

“I think to start to attract and educate casual fans and bring the geographic connection in — I think of people who don’t love hockey but say, ‘The Bruins are my team because they live in Boston.’ I think you have to be in-market to fully take advantage of that,” Kraft said in that same interview.

Esports is gathering more fans at a rapid pace. The Overwatch League, however, has a real shot at being a mainstream, breakout hit. The novelty of someone watching “their” team compete while sitting at a bar (viewing a broadcast that mimics a traditional sports broadcast, it should be noted) could easily translate that person into a passionate viewer if the ebb and flow of the game (uh, sport) clicks. (Plus, legalized sports betting is likely to come into being at the same time as esports’ popularity really skyrockets, which has the potential to generate even more interest.)

The point is that the Overwatch League has put itself in an excellent spot for mainstream success. Activision Blizzard sure thinks so; the developer is setting up its upcoming Call of Duty League to mirror the Overwatch League’s format. It’s a long-term play on Activision Blizzard’s part. One that is likely to pay off.

If you have questions about the benefits of franchising or esports sponsorships in general and would like some educated answers, give one of the industry experts at eGency Global a call at 972-323-6354.