Blizzard has fired back at a report that claimed the franchise fee for teams looking to participate in the upcoming Overwatch League is $20 million.
The report plunged the soon-to-launch eSports league into controversy, leaving fans wondering if the Overwatch League would still push through.
Overwatch League Franchise Fee: $20 Million?
According to multiple sources, ESPN reported that Blizzard is struggling to attract teams to join the upcoming Overwatch League primarily because the asking price for a franchise fee is too high at $20 million. The report claimed that the fee is even higher in bigger markets such as Los Angeles and New York.
In addition, despite the massive price for the buy-in, teams are not being guaranteed to share in the league's revenue until after 2021 and only if Blizzard is able to achieve certain goals. Teams who later decide to sell their spot to another team will also need to give up 25 percent of the proceeds to the Overwatch League.
The $20 million franchise fee is significantly higher than the price for a team to participate in other eSports leagues in the United States. For example, a spot in the League Championship Series for League of Legends of Riot Games was sold for $1.8 million in December. League of Legends is the most popular video game in the world, and the League Championship Series is one of the world's most established eSports leagues.
The report seemingly explains why five eSports organizations have decided to drop their Overwatch teams, with the massive buy-in fee being the speculated reason behind these moves. The $20 million franchise fee was confirmed by sources of Kotaku, which added that Blizzard has not shown flexibility regarding the price.
One of the major concerns regarding the Overwatch League is whether it will be able to attract huge crowds of audiences that would lead to additional revenue in the form of ticket sales and merchandise sales. This is because Overwatch has not drawn significant viewership on platforms such as Twitch, in addition to the lacking spectator tools for the game. Blizzard said that it is working to improve these tools, but the fact remains that high-level play in the popular multiplayer shooter is confusing to follow for new viewers.
Blizzard Responds To Controversial Report
Shortly after ESPN published the report that generated controversy for the Overwatch League, Blizzard released a statement responding to it.
"We appreciate that there's a lot of enthusiasm about the Overwatch League, which has translated into months of speculation — including reports circulating unverified and wildly ranging rumors from anonymous sources about purported deal terms, team pricing, and other details," Blizzard said to open its response.
Blizzard clarified that its ultimate goal is to build an exciting ecosystem for Overwatch eSports, culminating with the Overwatch League that will be rewarding for all parties involved. The company also looked to dispel rumors that it is ignoring eSports organization who would like to participate in the upcoming eSports league.
Lastly, Blizzard took a shot at ESPN's report by saying that it is important to think twice for statements that come from unnamed sources. Blizzard warns that parties may be trying to leverage the media to purposely spread wrong information to improve their bargaining leverage and other such advantages.
Blizzard said that it will be releasing the official details about the Overwatch League once they are finalized. The company did not refute the $20 million franchise fee, and eSports organizations are still dropping their Overwatch teams, though, so this story should be interesting to follow as it develops.