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OWL and CDL teams reportedly owe Blizzard $420 million

According to the recent edition of The Jacob Wolf Report, the Overwatch and Call of Duty Leagues teams owe... Fragster | 28. May 2022

According to the recent edition of The Jacob Wolf Report, the Overwatch and Call of Duty Leagues teams owe up to $420 million in franchise payments to Activision Blizzard. The payments were reportedly postponed back in the fall of 2020 due to the global pandemic.

Based on the insights from the latest The Jacob Wolf Report, the payments owed by the CDL and OWL leagues have been postponed until this autumn, however, according to Wolf’s sources, they could be potentially postponed to 2024. Activision Blizzard didn’t provide a comment on the matter. 

Massive debt

Following two years of deferred payments, the total amount owed is between $390 and $420 million, according to Wolf. Teams in the CDL allegedly owe an average of $22.5 million to Blizzard while 20 OWL franchises each owe up to $7.5 million.

According to the report, former Head of Activision Blizzard’s esports division, Brandon Snow, has previously suggested the idea of ​​waiving the OWL and CDL franchise payments. However, he left the company in February for a role at Formula 1. Activision Blizzard is currently in the process of acquisition by Microsoft, therefore payment terms are unlikely to change significantly until the acquisition closes in 2023.

While organizations bought into the CDL league starting at about $25 million, the OWL franchises paid roughly $16 million to enter the league in 2017. When the league expanded in 2018, the entry fee went up to $35 million, according to Wolf.

OWL and CDL franchises in troubles

The ongoing global health crisis has hit the CDL and OWL hard because the incentive for many organizations to join the leagues had been the homestead system of hosting games and tournaments at franchised locations. However, with the inability to hold esports events on-site until recently, they were not able to host these large events and generate revenue. 

Activision Blizzard itself isn’t entirely innocent either, having wreaked havoc on its leagues with multiple scandals, for instance, the lawsuit by the California Department of Fair Housing and Employment against the publisher for alleged knowledge of sexual misconduct within its own ranks for several years.

This has caused many sponsors to stop promoting the leagues. Even though the CDL season has already started, there are currently no sponsors listed on the OWL website. Furthermore, Immortals, an investor in both leagues, has slowly exited the CDL by selling its spot to 100 Thieves and the OWL by outsourcing its team operations and moving the franchise to China. 

All of these factors combined have contributed to the tremendous mess that the OWL and CDL franchises have been thrown into.