Twitch pays sizeable rights fee for eSports' Overwatch League
Twitch, the live-streaming video portal owned by Amazon, has finally sealed a deal for global streaming rights to Overwatch League, the new franchise-based eSports competition organised by video game publisher Blizzard Entertainment.
The deal was announced on the eve of the start of the league, which begins today and runs until July.
The two-year agreement is reported to be worth $90 million, reflecting its status as the most attractive eSports property to have hit the market.
Twitch’s deal covers the exclusive third-party global streaming rights to the event in all regions apart from China. Coverage will be broadcast in English, French and Korean.
It had been expected that Twitch would claim the rights but the company left it late to seal a deal, leaving some wondering if a rival platform would sweep in.
Overwatch League’s pre-season games were streamed on Major League Gaming TV, the eSports platform owned by Overwatch’s parent publisher Activision Blizzard.
In China, streaming platforms ZhanQi TV, NetEase CC, and Panda TV will all show coverage of the league.
The value of Twitch's deal has led some commentators to make comparisons in USA to Major League Soccer's linear rights agreements.
MLS' domestic eight-year deals with cable sports broadcasters ESPN and Fox Sports and Univision Deportes, the Spanish-language network, run through to the end of 2022 and are worth around $90 million annually (they also cover USA men's national team's qualifying matches for the next two World Cup cycles). However, the MLS' previous domestic deals were worth under $30 million per year.
The Korean-language rights will drive significant value for Twitch as the country has around 4.5 million eSports enthusiasts, according to industry researcher Newzoo.
Newzoo estimates that by the end of this year, eSports revenues in Korea will total Won4.3 billion ($40.4 million).
Last year, the company estimated that media rights would account for 14 per cent of global eSports revenues by the end of 2017.
Armin Zerza, chief operating officer of Blizzard Entertainment, said: "Our fans love to engage with content on Twitch, and we wanted to drive significant viewership of the Overwatch League in its inaugural season and beyond.”
Kevin Lin, chief operating officer of Twitch, added: "The Overwatch League is making a major impact on eSports by reshaping the industry with city-based teams. Given Overwatch's consistent reign as a top-viewed game by our community, we look forward to offering their pioneering style of league play to a large and passionate fan base that will be able to bond over not only their favourite plays, but hometown pride."
The cost of acquiring a franchise in Blizzard’s new 12-team league was understood to be a minimum of $20 million, with no immediate financial return guaranteed, as a revenue-sharing model is not expected to be in place until 2021.
By comparison, Riot Games’ North American League of Legends competition charges around $10 million per franchise.
Franchise owners in the Overwatch League include Robert Kraft, the US businessman and owner of the NFL’s New England Patriots, who has a team in Boston, Noah Winston, chief executive of eSports team Immortals, who acquired a team in Los Angeles, and Jeff Wilpon, chief operating officer of baseball’s New York Mets, who picked up a New York-based team.
There is also a Miami-Orlando franchise, owned by Ben Spoont, chief executive of the Miami Heat-owned eSports Misfits.
Andy Miller, the co-owner of the Sacramento Kings, has purchased a team in San Francisco, while Kevin Chou, the co-founder of mobile game developer Kabam, and Chinese tech giant NetEase, have bought franchises in Seoul and Shanghai, respectively.
• Netgear, the computer networking company, has signed up to become the jersey sponsor of Overwatch League’s Korean-based team Seoul Dynasty.
Under the deal, Netgear’s Nighthawk gaming brand is to feature on the team’s jerseys.
In November, Jack in the Box, the US fast food restaurant chain, became the first brand to secure a shirt sponsorship deal with an Overwatch franchise.
The Dallas-based Team Envy will be sponsored by Jack in the Box in a multi-year deal.
It will serve as the team’s official quick service restaurant and only jersey sponsor.