The franchise fees associated with participating in Activision Blizzard’s Call of Duty and Overwatch leagues can be deferred due to the financial complications associated with the COVID-19 pandemic, according to a report on Tuesday in The Washington Post. Teams associated with the leagues have reportedly paid anywhere between $20M USD and $40M using a payment plan in order to pay the costs. With this announcement, teams have the option of deferring those payments.
The COVID-19 pandemic has wreaked havoc on both the leagues as the monetization models associated with live events, activations, and competitive home stands were rendered moot after being canceled. Those esport organizations that were counting on revenue from those types of events, found themselves in financial jeopardy as live revenue streams dried up.
This move by Activision Blizzard is an attempt to help alleviate those short term financial hardships by allowing timed franchise payments, which can be in a range between $1M and $5M per payment, to now go to the operational funds of the franchises.
This move will be especially helpful for the 10 ownership groups which field teams in both leagues.
Back in April, the League of Legends European Championship Series made the decision to defer franchise payments for league teams while also moving up revenue share payments in a bid to give teams some more financial stability.
Talks regarding this type of move have been happening at least as far back as July when Sports Business Journal’s Adam Stern first reported on the possibility.
