eSports franchise models face financial decline

The franchise model in eSports, which attempted to replicate the structure of major American sports leagues like the NBA and NFL, has largely failed to achieve its promised financial stability. Between 2017 and 2019, the industry sought to secure massive revenues through broadcasting rights and localized team identities.

A primary example of this decline was the Overwatch League (OWL), established by Activision Blizzard. The league required massive initial investments, with slot prices rising from an estimated US$ 20 million to as much as US$ 60 million during expansion rounds. Despite backing from traditional sports investors, the model struggled with unsustainable maintenance costs and stagnant viewership, particularly following the COVID-19 pandemic.

In 2023, organizations voted to end the OWL. Activision Blizzard reportedly paid US$ 6 million to each franchise as a termination fee to close the project and transition the competitive scene to third-party circuits, such as the ESL FACEIT Group.