Report: Teams across OWL and CDL owe up to $420 million in franchise payments

Activision Blizzard is owed up to $420 million in franchise payments from teams in the OWL and the CDL according to a report from Jacob Wolf.

Franchise payments for the leagues were deferred in 2020 because of the global heath crisis and were pushed back to the fall of 2022 according to The Washington Post. Those payments could possibly be pushed even further, to 2024, according to Jacob Wolf’s report. Organizations bought into the CDL starting around $25 million and OWL franchises paid $20 million for entry into the league in 2017, and when the league expanded in 2018 the fee went up to as high as $35 million according to Wolf. After about two years of deferred payments, the total amount owed is between $390 and $420 according to Wolf. Teams in the CDL owe Activision Blizzard $22.5 million on average and 20 OWL franchises owe up to $7.5 million each according to the report.

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The former head of esports at Activision Blizzard, Brandon Snow, floated the idea of waiving OWL and CDL franchise payments at one point according to the report.

OWL and CDL franchises continue to see financial turbulence

The current global heath crisis has hit the CDL and OWL hard as the draw for many organizations to join the league were the homesteads, or matches and tournaments held at a franchise’s own venue. But with in-person esports events not possible until recently, the full financial impact of those regular in-person events have yet to be seen. Activision Blizzard itself has also impacted the leagues with its various recent controversies starting with the California Department of Fair Employment and Housing filing suit against the company for alleged knowledge of sexual misconduct within its ranks for multiple years.

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This caused many sponsors to drop their advertising with the leagues as their are no sponsors listed on the OWL website and the season is already underway. The CDL itself only has four sponsors: Mountain Dew, Aimlab, Scuf and Zenni. Immortals, an investor into both leagues, has slowly stepped away from the CDL, by selling their spot to 100 Thieves, and OWL, by outsourcing its team operations to China and moving the franchise there.