CDL Teams Consider Requesting Franchise Fee Cancellations, Following OWL’s Precedent

The outstanding amounts owed by OWL franchises that had not paid their total franchise fees were canceled, and now CDL teams may ask for the same arrangement to be made with them. Activision Blizzard took the unusual move in 2020 of allowing teams competing in their Overwatch and Call of Duty leagues to stop making payments toward their franchise fees. This was a first for the video game publisher. It was agreed upon, and it was presumed that the costs would return to normal once the situation was resolved.

On the other hand, an agreement was made between the developer and the Toronto Defiant of the OWL on June 5, 2023, whereby the developer agreed to cancel all outstanding payments toward the franchises’ outstanding fees. The Sports Business Journal reports that Activision Blizzard has come to a deal with the other Overwatch League teams on terms comparable to those already established. Because CDL teams have witnessed OWL teams being given a discount on those hefty entrance fees, CDL teams are asking for a deal comparable to the one granted to its Overwatch competitors.

CDL teams are searching for ways to reduce their franchise expenses

A report from the Sports Business Journal states that “sources have come forward stating that teams in the Call of Duty League may ask Activision Blizzard for the same deal as its Overwatch League counterparts.” The article states that “sources have come forward stating that teams in the Call of Duty League may ask Activision Blizzard for the same deal as its counterparts.” The source says the transaction has a good chance of going through. Still, it is contingent upon Activision Blizzard putting its financial house in order before Microsoft’s impending takeover of the company.

To participate in the Overwatch League, each club agreed to pay a price of $20 million. On the other hand, the cost of a franchise spot in the Competitive Drone League was anticipated to be $25 million.

According to the data provided by SBJ, “OWL teams still owed anywhere between $6 and $7.5 million,” which was the sum subsequently reversed for the teams. Nevertheless, neither Activision Blizzard, the Overwatch League, nor any groups have verified that number. Canceling unpaid franchise charges for current CDL teams may cost Activision Blizzard millions of dollars. Still, it may be worthwhile to ensure the continuity of the league.