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Sports industry heavyweights invest in new esports league

US video game developer Activision Blizzard has announced the sale of the first seven franchises for its new Overwatch League, with high-profile sports executives Robert Kraft and Jeff Wilpon among the owners of the new teams, which will be based in the US, China and South Korea.

Touted as the world’s first major global professional esports league with city-based teams, the Overwatch League is based on the popular multi-player shooter game that was released in May 2016.

Kraft, chairman and chief executive of the New England Patriots NFL American football team, will take control of the Boston-based franchise, while Wilpon, chief operating officer of the New York Mets Major League Baseball franchise, will own the New York team. 

Elsewhere, Noah Whinston, chief executive of the Immortals esports team, has secured the Los Angeles franchise, while Ben Spoont, chief executive and co-founder of Misfits Gaming, and Andy Miller, chairman and founder of NRG Esports, have acquired franchises in Miami-Orlando and San Francisco, respectively.

Outside of the US, Chinese internet technology company NetEase has acquired a franchise in Shanghai, while Kevin Chou, co-founder of Canadian interactive entertainment firm Kabam, has secured a team in Seoul.

Mike Morhaime, chief executive and co-founder of Blizzard Entertainment, said: “We’re building this league for fans – esports fans, traditional sports fans, gaming fans – and we’re thrilled to have individuals and organisations who are as passionate about professional competition as we are, and who have extensive experience in all three fields, representing our first major international cities in the league.”

Financial terms of the team acquisitions were not disclosed, but Activision Blizzard was reported to be seeking franchise fees of $20m (€17.6m). For the first season of the league, regular-season matches will be played at an esports arena in the Los Angeles area as teams develop their local venues for formal home and away play in future seasons. Matches will be played each Thursday, Friday and Saturday.

The league will seek to create value for team owners through advertising, ticketing and media-rights revenues, with teams receiving an equal share of all league-wide net revenues. Teams will also keep all local revenues generated through their home territory and venue up to a set amount each year – a strategy that is said to be unprecedented in esports. Above the set amount, a percentage is sent to the league’s shared revenue pool.

In addition, teams will have a licence to operate and monetise up to five amateur events in their home territory each year and to benefit from the sale of league-affiliated fan items in Overwatch, with 50 per cent of the revenues going into the net shared revenue pool for all teams.

“We have been exploring the esports market for a number of years and have been waiting for the right opportunity to enter,” Kraft said. “The incredible global success of Overwatch since its launch, coupled with the league’s meticulous focus on a structure and strategy that clearly represents the future of esports, made this the obvious entry point for the Kraft Group.”

Wilpon added: “We view our participation in the Overwatch League as a major opportunity to take a lead position where technology is converging with sports and media. This partnership with the Overwatch League and with some of the elite ownership groups in professional sports, offers a unique opportunity to connect with millions of dedicated fans, engaged and passionate about one of the world's fastest growing sports, and to continue proudly representing New York.”