Field Level Media - Professional sports content solutions | FLM

The future of the Overwatch League is in jeopardy with Activision Blizzard announcing plans this week to offer the 19 team owners a $6 million termination fee at the end of the current season.

After the season, the franchise owners will vote on whether to continue under an updated operating agreement or accept the severance offer (totaling approximately $114 million).

Based on the league’s declining viewership and shaky financial situation, multiple reports indicate that the owners are likely to accept the termination fees. The current Overwatch League season concludes with the Sept. 28-Oct. 1 playoffs in Toronto.

Activision Blizzard announced the development Tuesday after releasing its second-quarter earnings report, noting that the company’s esports leagues “continue to face headwinds.”

“During the second quarter, we amended certain terms of our collaborative arrangements with team entities participating in the Overwatch League,” the company said. “According to the amended terms, following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the teams do not vote to continue under an updated operating agreement, a termination fee of $6 million will be payable to each participating team entity (total fee of approximately $114 million).”

According to a report by The Verge, Activision Blizzard laid off about 50 employees in its esports department this week.

The city-based Overwatch League launched in 2017.

OWL commissioner Sean Miller told The Verge that some form of competitive Overwatch will continue regardless of how the owners vote.

“I want to be clear on one thing in particular, that Overwatch remains committed to a competitive ecosystem in 2024 and beyond,” Miller said. “And we’re building toward a revitalized global scene that prioritizes players and fans.”

–Field Level Media