ESI London, the biggest esports business conference of the year, is on the way! Taking place across September 18-20th, the event will be hosted at Olympia London in Kensington and will see a whole host of industry professionals in attendance.
The event will feature in excess of 17 sessions, from panels to live debates, workshops, seminars and networking opportunities and finish off with a closing party at the Natural History Museum, but in this article, we want to highlight one of the most interesting topics that will be discussed: franchised leagues in esports.
What’s the common thread between the NBA, the NHL, and the Overwatch League? They’re all franchised leagues – and while the first two leagues have been around for a long time, the latter is a new take on the franchise system and exists within esports. This is becoming more and more common at the industry develops, but are these leagues worth it? It’s a nuanced question, that’s for sure.
Luke Cotton, COO at Code Red Esports – a London-based esports agency that works with Overwatch League franchise London Spitfire – had this to say about the topic: “Different games have different esports ecosystems and it would be remiss to suggest that a one-size fits all approach is the correct one for all titles. The main benefit of a franchising system is the security that enables more significant investments to be made, both by investors in teams, due to the absence of relegation, and by brands sponsoring them, given teams have guaranteed broadcast coverage.”
He continued: “Franchising also provides regular competition and viewing schedules helps fans easily follow the major competitions, whilst avoiding oversaturation. On the other hand, talent development and the path to pro needs to be carefully managed. Rags to riches stories become incredibly rare, and a lack of competition can stifle innovation. It is also worth noting that publishers can put many of the additional benefits of franchising in place, such as ways for teams to generate new revenue streams, without the need for a formal franchising system.”
A live debate, entitled, “Franchised leagues in esports, yay or nay?” will take place on day one of the conference and see Ian Smith, Commissioner for ESIC will moderate the discussion – which will include both Michal “CARMAC” Blicharz, VP Pro Gaming at ESL and Tomi Kovanen, General Manager CS:GO and Business Development at Immortals. These two knowledgeable figures will share their thoughts on, and their experiences in, this emerging development in esports.
Franchised leagues are a hot topic at the moment, typically boiling down to whether competitions should be closed off to teams or not. Teams who buy-in to these leagues are able to stay in the competition regardless of poor performance – such as Shanghai Dragon’s 0-40 record in the inaugural season of the Overwatch League. Some argue that teams who may perform better should be competing instead of those with cold hard cash.
Michal “CARMAC” Blicharz, VP Pro Gaming at ESL is definitely wary of franchising within esports, telling Esports Insider the following: “There are clear benefits to franchising in sports leagues, but as it’s being implemented currently, I would not be very sure that they outweigh the downsides that franchising creates. Most definitely, copying over something that works in traditional sports leagues onto a different ecosystem with its own set of circumstances won’t necessarily bring the same results.”
There is a contingent too who are of the opinion that only including teams with the capital to buy into these leagues is actually harming those in the amateur or semi-pro scene who have aspirations to play in the top leagues in their particular esport. This is because – unless they’re picked up by one of these franchised teams – then they have no, or a severely limited, point of entry to compete alongside some of the best players and teams.
Another point of interest is that franchising in esports is one way for investors to get into the industry, pumping money into their chosen franchise and helping to support this relatively-new system. Look at the Boston Uprising team in the Overwatch League, for example. This particular franchise is owned by Robert and Jonathan Kraft, two main players behind the Kraft Group – a multi-billion dollar business group that may not have gotten involved in esports if this opportunity didn’t come around.
Does bringing in large companies and conglomerates actually help the economy and ecosystem of esports overall, though? It seems apparent that if they buy into a franchised league for millions of dollars and start their very own venture then they’re committing to a long-term vision within the industry. This is another topic that will be debated during this section of the event.
Both the European and Turkish League of Legends competitions (EU LCS & TCL respectively) are following suit from the North America Championship (NA LCS) by introducing franchising in 2019. While players’ salaries are said to have increased dramatically since the competition included buy-ins from teams, sceptics of franchising in esports as a whole have been vocal about whether they will actually get enough bang for their buck. Since this is still a new venture within the realm of competitive gaming, it’s hard to say. However, Blizzard Activision obviously feels being a part of the Overwatch League is worth a lot, bolstering prices up from $20m (£15.3m) for Season 1 to $30m-60m (£23m-46m) for Season 2.
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