Two major developments are ready to be announced for eSports leagues run by major video game publishers.
Activision Blizzard, based in Santa Monica, California, is expected to announce the owners of the first franchises in its new Overwatch League. Early investors are expected to pay about $20 million for the city-based franchises.
Also, Los Angeles-based Riot Games is closing franchise applications in its reconstituted North American League Championship Series in “League of Legends.” Franchises are scheduled to be named in November and expected to be valued at $10 million. The league is charging a $3 million fee for entrants.
According to a report at bizjournals.com, analysts predict that the Riot Games league could attract between 30 and 50 bids for 10 franchises. Reports say potential investors are coming from a wide range of interests from existing eSports organizations to traditional sports ownership groups.
This emphasis on the sale of permanent franchises is having an impact on the finances of eSports contests. According to the report, franchise holders in League of Legends will be entitled to 32.5 percent of league revenue, Riot has already secured an about $300 million technology development deal with BAMTech.
Activision’s Overwatch League is a new startup, but the game publisher says it will invest heavily in promoting the game and has promised revenue sharing and local team-level sponsorship and merchandising options, the report said.
While there remain many other games and leagues in eSports, these two new leagues are seen as offering more structure than its competitors.
“My feeling was six months ago … you didn’t know what was going on,” Sal Galatioto, president of the investment bank Galatioto Sports Partners, who has evaluated the offerings but isn’t handling any active deals told the website. “There wasn’t a lot of structure. Now there’s much more structure. You can do a better analysis of what exactly you’re investing in. You still have to figure out if it’s going to work.”
Meanwhile, Nate Nanzer, commissioner of the Overwatch League, tells Heroes Never Die—a website dedicated to the game—that the league is looking into offering a type of daily fantasy sports wagering on the league.
“Wagering (on who will win) is not something that we’re considering,” Nanzer told the website. “Fantasy has obviously proven to be something that fans love in traditional sports and are a great driver of engagement. We’re definitely looking into something like that.”
In another eSports story, the Australian Football League’s Commission has endorsed the AFL’s bid to expand into eSports.
The AFL said its expertise in “sporting governance, policing integrity issues and running competitions” put it in a strong position to aid the development of the Australian e-sports industry.
