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Business of Esports Minute 018 – CDL & OWL Bailout, ESL & Dreamhack Merger, MTA Esports Venue

A week of news covering the intersection of business and gaming / esports, all in about one minute – everything you need to know from the “profit of esports” himself. 

018 – October 4, 2020

From the keyboard to the boardroom, this is the Business of Esports Minute! Every single week, I, Paul Dawalibi, the prophet of esports, will be bringing you my hottest takes from the week, basically everything you need to know about the business of esports all in about one minute. Let’s go.

This week, Activision Blizzard finally threw a lifeline to the beleaguered owners of Overwatch and Call of Duty League franchises. The company is allowing teams to defer multi-million dollar franchise fees that were due this year to account for the financial turmoil brought on by the pandemic. The offer is a clear acknowledgement on Activision’s part that their leagues face serious financial challenges. However, blaming the problems on coronavirus is definitely a cop-out. Both leagues’ business models have never been owner-friendly, and a continuous stream of poor management decisions has only made the situation worse. It would have been nice to see Activision Blizzard acknowledge the mistakes made in the context of this financial assistance. 

ESL and Dreamhack made a big announcement this week when they decided to merge their operations into a single entity under the name ESL Gaming. While the companies and leadership have merged, both brands will continue to operate under their original names. It’s worth mentioning that both are also already owned by the same parent company – Modern Times Group. This merger didn’t make much sense to me. Third-party tournament organizers like ESL and Dreamhack already have a very uncertain future given game publishers’ increasing desire to keep everything in-house. As middlemen, ESL and Dreamhack are likely to be squeezed out over time. Maintaining 2 separate brands doesn’t make much sense if you are going to merge the companies anyways, as the value and fan mindshare is diluted. 

Finally, Metro workers in New York built a secret room to watch Twitch streamers during work hours. The man-cave was built below track 114 and was hidden behind a plasterboard wall in an unused locksmith shop. The room had a futon, TV, refrigerator and microwave, and was used primarily by workers to watch Twitch streamers such as Tfue. While the 3 workers involved have been suspended, it’s worth noting that they did manage to build the most profitable dedicated esports venue in the industry thus far.  

For far more detailed insight and discussion into the business of esports, as well as the most exceptional line-up of guests, please tune in every week to the Business of Esports podcast and every Wednesday evening into the Business of Esports after-show livestream. Also make sure to follow us on Twitter @bizesports and on YouTube at The Business of Esports. 

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