Uncertain Future: Activision Blizzard Expresses Concerns over Longevity of CDL and OWL in SEC Filing

Activision Blizzard revealed in a 10-Q SEC filing released on May 4 that the company is concerned about the future “longevity” of both the CDL and the OWL because both leagues face issues. On May 4, Activision Blizzard submitted a document to the SEC that disclosed the company’s perspective on the Call of Duty and Overwatch leagues, which have been experiencing various challenges recently, including financial ones. Activision Blizzard specifically discussed the CDL and OWL in a section of their quarterly report titled “Management’s Overview of Business Trends.”

“Our collaborative arrangements for our professional esports leagues (i.e., the Overwatch League and the Call of Duty League) continue to experience headwinds which are negatively influencing the operations and, potentially, the longevity of the leagues under the existing business model.” “Our collaborative arrangements for our professional esports leagues (i.e., the Overwatch League and the Call of Duty League). According to the filing, “We continue to work to address these challenges, which could result in significant costs, and such efforts may prove fruitless.” 

Reportedly, teams in both leagues owe a combined total of approximately $400 million in delayed franchise fees that have been postponed since 2020. At the beginning of April, the Department of Justice settled the complaint against both leagues regarding the claimed salary cap placed on players’ pay.

Activision Blizzard has a pessimistic prognosis for the future of CDL and OWL

The Overwatch League, in particular, has been forced to endure adversity because its Chinese franchise teams have been forced to contend with Blizzard titles being shut down in mainland China. As a result, the Overwatch League will need to include one of its teams from the 2023 season.

In addition, the league does not have any significant sponsors for the 2023 season because these sponsors withdrew their support after various charges and lawsuits were filed against Activision Blizzard regarding, among other things, the company’s workplace conduct. According to him, esports organizations are still looking to enter the CDL. Team Heretics is planning to partner with the Florida Mutineers to create a new team called the Miami Heretics. This indicates that the CDL is in a healthier shape than it was previously believed to be.

The gloomy picture presented in the SEC filing starkly contrasts the recent statements made by Sean Miller, the head of the Overwatch League, regarding the health of the electronic sports league.