Report: Big Changes Underway for Overwatch League

Credit: Activision Blizzard

Update: An Activision Blizzard spokesperson declined to comment on specifics related to negotiations between the league and team owners, pointing us instead to a statement the company made earlier this year concerning the future of OWL: “With the conclusion of the 2023 Overwatch League season, we will be focusing on building our vision of a revitalized esports program. We’re eager to share more with you as details are finalized.”

From what we understand of the situation from sources we spoke to over the weekend, Activision Blizzard has not finalized or signed any contracts related to OWL in 2024, as of this writing.

Original Story: Teams in the Overwatch League are likely to vote in favor over walking away and taking a $6M USD payout each, according to reporting from journalist Jacob Wolf. Further—according to what sources are telling Wolf—the new Overwatch League will probably be operated by a third-party tournament organizer, and the publisher has been in talks with Savvy Games Group’s ESL FACEIT Group, adding credence to previous reporting in September from GGRecon Senior Esports Journalist Sascha “Yiska” Heinisch.

Savvy Games Group is owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), and its chairman is Saudi Arabia Crown Prince MBS.

Last month The Esports Advocate reached out to several tournament organizers to ask them if they were negotiating with Activision Blizzard to run whatever the Overwatch League will be in 2024. A source at PGL told us that they were not talking to Activision Blizzard about OWL, while a representative from BLAST told us at the time, “We have nothing to add to the story at this time, [but] will let you know if that ever changes.” Other tournament organizers—including ESL FACEIT Group—did not respond to our requests for comment at the time.

The odds-on favorite appears to be Esports Engine, according to Wolf, which was acquired by ESL FACEIT Group in March as part of a buyout of parent company Vindex. Esports Engine currently handles production and broadcasting for Activision Blizzard’s other franchised league, Call of Duty League (CDL). It’s an interesting choice (if true) because the company had a major round of layoffs in July that saw approximately 65 employees let go.

TEA reached out to Activision Blizzard and ESL FACEIT Group prior to the publication of this story, but they did not respond to a request for comments. TEA also reached out to several team owners, but they either didn’t respond to our requests for comment (as of this writing) or wouldn’t speak on the record about the situation.

Activision Blizzard first shed light on its plan to give team owners an opportunity to vote and decide if they wanted to exit the league as part of its Q2 2023 financial results. TEA also reported at the time about a round of layoff of that saw nearly 50 employees from CDL and OWL let go. The company said in its financial report:

“As previously disclosed, our collaborative arrangements for our professional esports leagues continue to face headwinds. During the second quarter, we amended certain terms of our collaborative arrangements with team entities participating in the Overwatch League. According to the amended terms, following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the teams do not vote to continue under an updated operating agreement, a termination fee of $6 million will be payable to each participating team entity (total fee of approximately $114 million). As of June 30, 2023, a termination liability has not been accrued. Total revenues from the Overwatch League comprise less than 1% of our consolidated net revenues.”

In September news surfaced that Activision Blizzard was in talks with third-party tournament operators to run a revamped version of the league in 2024.

In October, Toronto Defiant owner OverActive Media announced that all outstanding Overwatch League entry fees had been waived by Activision Blizzard. The company added that the “reversal of these fees” would be reflected in its fourth quarter 2023 financial results. Those fees are valued at approximately $8.2M CAD ($6M USD). Other teams in the league were given a waiver on fees as well.

An additional wrinkle for Activision Blizzard and its esports plans for 2024 and beyond relates to its recently completed acquisition by Microsoft. It is unclear what Microsoft thinks about Activision Blizzard’s esports operations, and whether it will be impacted by consolidation of operations, reductions in staff, or other factors that tend to happen following a major acquisition.