OWL and CDL Face Uncertain Future After Rumors of Franchise Fee Deferment

Covid rips through the Esports world!

It’s no secret that the ongoing Covid-19 pandemic has ravaged the world in one way or another, and that includes the world of Esports. In fact, much like the real world of pro sports right now, leagues have been forced to undergo a plethora of safety guidelines and social distancing in order to ensure a safe playing environment for everyone involved

Unfortunately for Activision Blizzard, who accrued most of their Esports league money from in-person events, merchandising and television sponsorship deals, they were forced to go online for the rest of the OWL and CDL season. This has left both leagues with few revenue streams to draw from, which is now being exacerbated by their rumored decision to allow teams to defer franchise fees this season.

“It’s a tough year for everybody,” said Philadelphia Fusion President Tucker Roberts, who didn’t comment on the specifics of any financial agreements with Activision Blizzard. “They’ve worked with us to make sure there’s support.”

Economic uncertainty for the Esports world?

The Esports Observer first reported in July that one of the options was to allow teams to defer their franchise payments to help offset some of the damage from the Coronavirus. While the move might be helpful in keeping leagues together in the short term, it does leave them with a very uncertain economic future.

Also keep in mind that revenue for next season is dependent on whether in person events are an option and if international travel is available. If not, the leagues will have to continue to rely on the tournament style gameplay they have turned to in the last couple of months and try to come up with other ways to make back their losses.

OWL and CDL showing strong numbers despite pandemic

Interestingly enough, the tournament format that the leagues utilized over the last couple months did result in a steady uptick in viewership and could be something they continue to rely on during this time. CDL also had their highest event viewership during a championship match between The Dallas Empire and Atlanta Phase, which at least gives the Esports world some promise for the future.

OWL’s second week of tournament play also set a record for viewership with over 375,000 people tuning in to watch the action or watching later demand. If nothing else, that is at least a sign of the demand for Esports and tournament play, which is why the leagues need to find new revenue stream in the age of the Covid-19 pandemic.

In the end, results have shown that there is legitimate demand for Esports in our society. It shows in the ratings it shows by the amount of merchandise sold and by the television deals they can garner. Of course, all that has been derailed by the pandemic and economic fallout, but if OWL and CDL can find a way to revive some of these income streams, they can overcome the hurdle of fee deferred.

“For us, we’re in this for the long haul,” said Chris Overholt, the president and chief executive of the Toronto Defiant and the Toronto Ultra. “When you take that long-term view to the industry the conversation becomes, I think, a lot, a lot easier.”