The Call of Duty League needs to change tack to avoid implosion
Call of Duty LeagueThe Call of Duty League is one of the most ambitious esports leagues in the world in a number of ways, for better or for worse. But the league appears to be spiraling, and those running it need to seriously consider changing tact if they want to prevent the implosion that seems almost inevitable.
On February 23, it was reported that Los Angeles Guerrillas’ owners would be looking to sell their spot in the Call of Duty League (as well as in the Overwatch League, Activision’s other esports venture). Such is the gravity of the situation that, if they can not sell, they would simply close operations, according to the same report, a clear sign that they want out as soon as possible. This would make them the fifth entity to either sell or attempt to sell their spot in the CDL since its first season concluded in 2020, following the likes of NRG, Immortals, and OpTic selling their spot to Boston to merge with Envy.
While this is evidently an issue primarily within The Guard, LA Guerrillas’ parent company (who also laid off almost all non-competing staff on February 22), it’s one that resonates across the entire league, in a situation that some will argue has been written on the wall since day one.
That’s why the Call of Duty League seriously needs to consider making several key changes, from the top down, to get back on track — if it’s not already too late.
Abandon $25m franchise fees
The buy-in fee for Call of Duty League franchises was scoffed at by fans almost immediately as soon as the figure was first reported. CoD esports hadn’t even come close to rivaling the top-tier titles, such as Counter-Strike: Global Offensive or League of Legends, yet Activision wanted to charge a fee never before seen in the industry for the honor of competing in their brand new league.
It wasn’t exactly a surprise, given the fact that they had brought their franchising model to Overwatch in 2018, a clear plan for the direction of their esports entities: charge high, promise big, and hope it works out.
So, both endemic and non-endemic organizations scraped their pennies together to buy-in before realizing very quickly that they were not going to be spinning a profit anytime soon. Since then, teams have floundered to get out of their agreements and find buyers to take on their commitments.
The issue is, when this is happening multiple times a season, at what point do investors look at the CDL as a sinking ship moving faster than its tenants can keep up with? Who would look at the current state of the CDL and choose to sign away $25m, regardless of how small the installments are?
A simple solution — and one that shouldn’t even have to be argued for — is a reduction in buy-in fees. Call of Duty is not the esport execs want investors to believe it is, and that’s fine. What’s not fine is that those who have already invested, watching their funds being drained, are struggling to keep the lights on while Activision holds out their hands asking for extra.
For context, buying into the LEC or LCS in League of Legends came with fees of approximately $10m when those franchise competitions were announced. The esport is a proven one, significantly larger than Call of Duty, and seems like a far more obvious choice for investors looking to expand their portfolio or get into the esports space.
This is not all to say that the CDL can’t be a profitable venture in the future. With comparisons to the NBA and the NFL by high-level executives, you have to give the league time to grow to reach even closer to those kinds of ventures. Expecting profits in the early years will have been silly. But with so many organizations looking to pull out, it’s easy to assume that franchises are struggling to see a return on their investment.
Call of Duty LeagueIn January of this year, a number of Overwatch League franchises were reported to have started “a collective bargaining process against the league after years of high operating costs and continually missed promises on revenue.”
The report stated: “The goal for those discussions is for the teams to be awarded some form of economic relief to promote sustainability after each franchise spent somewhere between $7.5 to $10 million in franchise payments over the past six years, as well as more than $1 million in operating costs each year to maintain their teams.”
What’s to say the Call of Duty League teams couldn’t draw inspiration from their Overwatch League peers — many of whom have teams in each league — and seek more financial support from the CDL?
Simply put, a lower buy-in would entice more organizations to join up and ease the financial pressure that everyone is facing in the current economic climate. Not to mention the good response it would get from franchises already involved — support that the league could definitely do with at the moment.
Figure out sponsorship and media rights
One major issue the CDL needs to get a grasp on for the longevity and optimism of the league is its sponsorships and media rights deals.
On February 3, Dexerto reported that the CDL was in talks with YouTube over another exclusivity rights deal in a move that left many fans, players, and franchises reeling.
OpTic Texas CEO Hector ‘HECZ’ Rodriguez was vocal in his distaste for the CDL’s strategy, evidently disappointed that team owners wouldn’t even be consulted on such a decision.
While most viewers prefer the Twitch experience, the YouTube exclusivity deal helped some franchises keep the lights on in the early days. The money received from that deal meant teams could make investments where they wanted to and not be so strict on their budget. When that income disappeared, it affected both the teams and the league.
Another issue comes in the form of sponsorships, with the CDL hosting a merry-go-round of sponsors since its launch, changing multiple times each season. In the last few months alone, we’ve seen sponsorships with Aimlab and Prime Gaming end, as well as the likes of US Army, ASTRO Gaming, USAA, and Mountain Dew Game Fuel all coming and going.
In fact, according to sources close to the situation, Mountain Dew pulling out as a sponsor meant the New York Subliners could no longer afford to host Major IV this season, which is why the tournament will now take place in Columbus, Ohio, without an audience.
Subliners President Farzam Kamel denied this in a statement made to Dexerto, saying: “Our decision to pull out of the major was based on a multitude of factors, none of them related to Mountain Dew. In fact, when the decision was made discussions with Mountain Dew about their participation were actively taking place just as in the prior year.”
In comparison to the above, the LEC has partnerships with the likes of KitKat, Kia, Santander Bank, Prime Gaming, and Red Bull, among others. They even have Warner Music as a license partner.
For the sake of the longevity of the league, as well as to provide the support the entire league needs, the CDL needs to sell its product to sponsors as resolutely as it did to investors. With viewership on the rise (though that could be affected by a move to YouTube), now is as great a time to capitalize as ever.
Earn the trust of fans and teams
Finally, something the CDL desperately needs to do is re-establish the relationship it has with fans, players, and teams, earning their trust and respect to take the league forward. Of course, this is easier said than done, and is a long-term solution to what is becoming an increasingly urgent problem, but is one that must be rectified.
Organization executives across the league are unhappy, whether they’re vocal about it, like HECZ, or they prefer to keep their criticism out of the public eye.
The relationship between the league and its teams is so frayed that when CDL executives sought to find a new venue for Major 4, a number of teams were reportedly not even contacted regarding whether they would want to host.
Boston Breach General Manager Denholm ‘Denz’ Taylor suggested as much in a tweet following the announcement, saying that “we wish we had the opportunity presented our way!”
Ultimately, the league needs stability, support, and positive press more than anything else. Those can go almost hand-in-hand. They need to treat franchises with the respect of a group that has committed to $300m+ payments to them — involve them in decision-making discussions, and don’t share last-minute announcements without consulting them. Of course, it’s up to the CDL leadership what they do with their league, but they need to find a way to keep these teams on their side. Right now, they’re not doing a great job at it.
These things are often easier said than done, but the league is gliding ever closer to breaking point on its current trajectory. While other factors may come into play — exorbitant, ever-growing player salaries, and annual game changes with varying competitive support, among others — the league itself needs to make things easier for franchises.
The alternative, as proven by LA Guerrillas’ reported sudden U-turn, is a league soaring ever closer to complete failure.
