TNL Take: Last month, I had reported that through various sources and investigation, that the hypothesis was that Houston would get one of the slots in Activision-Blizzard’s upcoming Call of Duty League.
For the past month, with further investigation and speaking with several industry sources not only do I not believe that this will happen, but the Houston Outlaws sale may not occur as well. Again, let’s see how the dots connect to see why this could potentially fall apart.
1/ HOUSTON OUTLAWS SALE
Image: (Activision-Blizzard)
As reported by ESPN on July 31st, Houston real estate developer Lee Zieben had agreed to terms with Immortals Gaming Club to purchase the Houston Outlaws for a total deal value of $40M. Now here’s the key paragraph from that report:
The deal has not been executed but is expected to close in late August, with Zieben currently having a binding letter of intent with Immortals for the purchase, according to sources. Paperwork submission to and approval of the Overwatch League is pending, league sources said.
While the deal was expected to close in late August, we are now almost one month past that expected close date.
That’s not a good sign.
2/ LEE ZIEBEN’S FINANCING
After sending my article to the twitter account of “Call of Duty Intel” @INTELCallofDuty - which has done an amazing job of reporting, tracking and releasing the latest news on the Call of Duty League - they found the following tweets from Lee Zieben’s personal Twitter account:
Image: (Lee Zieben Twitter)
I’m not sure if Lee Zieben knows how Twitter actually works and that these tweets would be public, but what’s hilarious is that he asked The Rock, Elon Musk and Jeff Bezos “I am purchasing two esports teams for the Overwatch and call of duty league. I am looking for strategic investors, would you be interested? Teams will qualify as an opportunity zone investment.”
After you’re done laughing, you can check yourself as astonishingly the tweets are still up!
Outside of tweeting a top Hollywood actor, a multiple-entrepreneur billionaire and the richest man in the world asking for investment, there’s another angle.
Multiple sources have told me that Lee Zieben currently doesn’t have the funding needed for these acquisitions and has been seeking $50M in funding. This was also reported by the Houston Business Journal on August 27th.
3/ EUNITED ACQUISITION
Image: (eUnited)
If you’re going to acquire a Call of Duty Franchise, you need to have a team. With CDL rostermania in full effect - again, a great job done by @INTELCallofDuty in keeping track of the potential roster moves - The Zieben Group has no previous experience in esports, let alone recruiting the right players, team chemistry and coach. The easiest thing to do is to acquire a top Call of Duty team which participated in the final season of the Call of Duty World League.
This is what was reported in the Houston Business Journal article which stated that Lee Zieben was “also acquiring LA based eUnited eSports Inc”. However, I don’t believe that is correct for two reasons:
-I’ve already discussed the lack of funding to buy both the Houston Outlaws and a potential Call of Duty League slot and now we’ve added buying a top esports teams and running operations.. That’s a lot of money required even if the total franchise fees are not required up front.
-Sources have also told me that not only is this incorrect, but eUnited is looking at a potential sale to a Toronto based group (not Overactive Media as they already have the Toronto CDL slot).
4/ HECZ
Image: (NRG)
In my original reporting on the potential Houston CDL slot, the biggest wildcard I mentioned was the involvement of Hector “Hecz” Rodriguez. To repeat again, Hector is one of the biggest hustlers in the space along with being one of the nicest people in the space. While Immortals Gaming Club may have bought Hector’s OpTic Gaming, there is no “real” OpTic without Hector. Period. (FYI, good luck Immortals Gaming Club with that brand now).
Well that’s not happening.
As announced this week, esports team NRG received the Chicago slot which will be managed by Hector as co-CEO.
How popular is Hector’s brand?
In the span of 4 hours, the @Chicago_COD twitter gained 18,000 followers - more than the 2nd closest CDL team, @CODToronto which garnered 14,000 followers…in 5 months. As of this writing, @ChicagoCOD has 42,000 followers.
That is all Hector.
5/ CALL OF DUTY FRANCHISE SLOTS
When Activision-Blizzard’s Overwatch franchised League began, they started with 12 teams. Multiple sources have confirmed to me that the Call of Duty League Season 1 will also begin with 12 teams.
Guess what? We are already at 12.
Image (@INTELCallofDuty)
Top Call of Duty esports teams such as 100 Thieves, Gen. G, Evil Genius’s and Heretics have all said that they will not participate in Season 1. This limits the pool of players available for a new CDL franchise slot further.
Considering that the Call of Duty League is not only launching in 2020, they’re also aggressively starting with Home/Away games in Season 1. For comparison, Overwatch League was supposed to have full Home/Away schedule for Season 3, however that has been greatly reduced.
With the Call of Duty League scheduled to start very soon, it may not be feasible to include additional slots for Season 1.
5/ IMMORTALS GAMING CLUB
Image: (Immortals Gaming Club)
Now this is the biggest angle to this story: Immortals Gaming Club.
After IGC bought Infinite Entertainment and Esports, they acquired the Overwatch League franchise of the Houston Outlaws. IGC already owns an OWL franchise team with the LA Valiant. However, Activision-Blizzard prohibits one corporate conglomerate to own two franchises in the Overwatch League.
Sources have told me that Activision-Blizzard were looking to finalize the Houston Outlaws sale at the latest by the end of Season 2 - which is in less than two weeks.
Now IGC is in a very tough position, not only do they not have any “brand value” with their OpTic purchase, they need to find a buyer immediately for Houston Outlaws.
As always, these are the dots that I’m connecting for follow up to the original story and look forward to seeing what eventually happens. Grab your popcorn.
Calls and messages to Immortal Gaming Club were not returned.
Neither were many messages to the Zieben Group over the last month (at this point their phone system might be a 80’s tape answering machine).
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Why Esports Are Real Sports
The Golden State Warriors and Houston Rockets recently locked horns in an eagerly anticipated NBA game featuring such luminaries as Kevin Durant, Stephen Curry and James Harden. On the same day the two organizations faced off on Summoner’s Rift as their League of Legends teams competed for glory. The NBA game garnered more attention, but the balance of power is likely to swing towards esports in future.
The rise of competitive gaming is among the greatest phenomena of the 21st century and traditional sports franchises are desperately piling into the industry in a bid to remain relevant going forwards.
They are well aware that the 2018 League of Legends World Championship Final attracted more viewers than the last Super Bowl, and they have seen the writing on the wall. If you cannot beat them, join them. Leading NBA teams, the world’s biggest soccer clubs and all manner of rappers, celebrities, entrepreneurs and tech giants are investing in esports teams as they are utterly convinced by its potential to take the world by storm.
The competitive gaming scene is growing increasingly professional and disciplined and the leading players are now multimillionaire superstars with sponsorship deals, massive fan bases and bulging trophy cabinets.
Millions of teenagers and young adults prefer watching CS:GO, LoL, Dota 2, FIFA, Madden and Overwatch than football, tennis, golf and athletics. They have grown up with technology and many of them identify more with these top gamers than they do with chiseled athletes.
They pack into stadiums to watch major tournaments live and streaming figures head into the stratosphere on platforms like Twitch and YouTube when the big teams are in action. Betting on these matches and tournaments is huge, and you can see the wide range of esports wagering markets here.
Esports Mirror Traditional Sports in Many Ways
The leading lights of the competitive gaming scene are just like traditional sports stars. They train hard, give their all at big tournaments and they bask in adulation when they win. They face all the challenges that the likes of Curry and Harden face, and they must display skills like endurance, agility, focus, leadership, teamwork, bravery, discipline and anticipation, just like traditional sports stars.
Esports franchises are just like their traditional sporting counterparts, while the scene has training camps, player associations, sports psychologists and more. There are leagues, cups, power rankings, commentators and pundits, and fans obsess over highlights reels and statistics.
By almost every conceivable metric, esports are real sports and they will only grow in popularity in the years ahead. It is therefore surprising to note that they they are not yet part of the Olympics. Organizers of the Paris 2024 Games were “deep in talks” last year about including esports as a demonstration event. It followed news that esports will be included as medal events in the 2022 Asian Games in Hangzhou, China, while the Asian Indoor and Martial Arts Games now featuring esports.
At the time, International Esports Federation secretary general Leopold Chung said the organization would work consistently to promote esport as a true sport beyond language, race and cultural barriers and try to turn it into an Olympic demonstration.
Yet this push now appears to be dead in the water. Thomas Bach, president of the International Olympic Committee, said that esports are too violent to be part of the Olympics. Any game that features people being hurt “cannot be brought in line with our Olympic values,” said Bach, who won an Olympic gold medal for fencing. That is essentially sword fighting, while shooting, boxing and judo are also Olympic disciplines. “Of course every combat sport has its origins in a real fight among people,” said Bach. “But sport is the civilized expression about this.”
A Number of Hurdles to be Overcome
That would exclude all of the world’s most popular esports, including LoL, Dota 2, CS:GO, Overwatch, Fortnite, StarCraft II, PUBG and Call of Duty. However, sports games like FIFA and Madden would presumably be fine, as would Rocket League. Yet there are further barriers that must be overcome.
Some people view esports as a single entity, but it is actually a diverse ecosystem featuring a huge number of different games and communities, many of which are totally different to one another. There is no overarching, international governing body and the fragmented governance is problematic. Publishers also own the rights to the games and that could cause licensing problems, while also creating a potential headache for broadcasters.
Yet these are all challenges that can be overcome. Right now you could argue that esports needs the Olympics more than the Olympics needs esports. Featuring at an upcoming Olympic Games would do wonders for the credibility, legitimacy and profile of esports.
However, in the future the tables are likely to be turned. TV viewership figures at the 2016 Games in Rio de Janeiro declined 15% compared to the 2012 London Olympics, and that was driven by a sharp drop among those aged 18-34. They may have been busy streaming esports tournaments instead.
Bringing esports into the fold would help keep the Olympics relevant and preserve its future health in a world increasingly dominated by technology. A number of leading sports teams are investing heavily in esports offshoots, and even organizations like the Premier League have launched their own tournaments. They are taking it seriously and getting in there at an early stage. If the IOC does not act, it could be too late and an esports equivalent could eventually end up blowing the Olympics out of the water.