Over half of the franchised teams in the Overwatch League (OWL) are reportedly seeking legal action against North American game developer Activision Blizzard.
According to The Jacob Wolf Report, the teams have hired British law firm Sheridans, as the franchises seek to recoup costs following ‘continually missed promises on revenue’.
The suit is being partly led by Canadian esports holding company Overactive Media, the owner of OWL’s Toronto Defiant, Call of Duty League’s Toronto ULTRA and MAD Lions, per the report.
Initial franchise slots for the Overwatch League cost as much as $20m (~£16.2m), according to various media reports at the time. The steep figure, combined with annual operating costs that see some teams operate at a loss, has led to franchises looking for additional support from the developer to ensure that investment in the league is fiscally sustainable.
The Overwatch League has seen a drop in revenue over the last two years, with a new media rights deal seemingly failing to re-materialise following the expiration of OWL’s deal with YouTube. In 2021, multiple sponsors also pulled out following the opening of a class action harassment and discrimination lawsuit against Activision Blizzard.
Discussions around collective action reportedly began immediately following the COVID-19 pandemic, which saw a much-reduced broadcast and more logistical complications for teams.
Many esports organisations, including ones that own OWL franchises, are facing mid-to-late stages in fundraising cycles due to a myriad of factors, such as the current financial climate. As a result, organisations have re-considered operational costs and cut back team members to remain fiscally sustainable. Layoffs have hit some of esports’ largest teams, with 100 Thieves announcing an additional round of cutbacks last week.
OWL teams continue to prepare for the beginning of the league’s sixth season with the deadline for teams to source a starting lineup extended to March 13th. The official start date for the 2023 season has yet to be determined.
Activision Blizzard has been approached for comment by Esports Insider.