Overwatch League franchise owners vote on updated operating agreement, resulting in $114 million cost.

Posted : 20 July 2023

Overwatch League franchise owners are set to vote on an updated 'operating agreement' at the end of the current season, according to Activision Blizzard's financial filing.

If teams decide not to continue under the updated agreement, each franchise will be required to pay a termination fee of $6 million, resulting in a total combined cost of $114 million if all franchises choose this option.

The disclosure was made as part of Activision Blizzard's Q2 financial results, which also revealed that the total revenues for the Overwatch League make up less than 1% of its consolidated net revenue. The financial filing mentioned that the company's professional esports leagues continue to face challenges.

The specific details of the vote, including the threshold for it to pass and the content of the updated operating agreement, were not disclosed in the filing. The current Overwatch League season is scheduled to conclude on October 1st.

Earlier, franchise slot owner OverActive Media announced a deal with Activision Blizzard to eliminate its outstanding Overwatch League franchise fee payments, worth $6.5 million, in exchange for a sponsorship. It is believed that other franchises might have also had their remaining fees waived.

While the termination fees suggest there are 19 franchises, the league is intended to have 20. It was reported in May that the Chengdu Hunters had disbanded, but the status of their franchise slot was not confirmed.

Overwatch League commissioner Sean Miller assured that Overwatch esports will continue regardless of the vote's outcome. However, The Verge reported that many of Activision Blizzard's esports staff were laid off, though the exact number was not disclosed.

Activision Blizzard runs both the Overwatch League and Call of Duty League, but there was no mention of whether the latter will undergo a similar vote or experience any structural changes.

The Overwatch League has faced challenges since its launch in 2018, with poor viewership and revenue causing discontent among team owners. Over half of the Overwatch League teams reportedly started a collective bargaining process against Activision Blizzard in January due to high operating costs and unmet revenue promises.

In 2021, Activision Blizzard faced multiple lawsuits alleging sexual harassment and a toxic work environment. This led to brands withdrawing their sponsorship of the Overwatch League, adding to its financial difficulties.

Overwatch League franchise owners vote on updated operating agreement, resulting in $114 million cost.

ADD A COMMENT :

Hot Topics