Not many companies have enough capital to obtain a spot in a franchised esports league, never mind more than one. OverActive Media is currently the only company in the entire industry to own franchises in three separate leagues: Riot Games’ LEC and Activision Blizzard’s Overwatch League and upcoming Call of Duty league.
To dig more into the company’s impactful entrance into the industry, we spoke to Chris Overholt, CEO of OverActive Media.
Esports Insider: What was it about esports that made you decide to get involved at such a high level?
Chris Overholt: I first had a look at the industry in 2016. I was invited into a conversation with the good folks at Activision Blizzard right after the Rio Olympic Games and, I have to tell you, it really captivated me. The people were fantastic. I was blown away by the culture of the organisation, and you need to prepare for those types of meetings in a new industry.
I spent quite a bit of time looking at the trends and the numbers, and it was the first time I had sat down to do that. It was really quite mind blowing in just about every way. Those conversations, in the end, didn’t go on but when I got a call from my old friend Sheldon Pollack, who’s the Chairman of OverActive Media, I certainly didn’t feel like I could pass that opportunity again.
ESI: How did your experience working for sports franchises equip you for your latest role?
CO: We believe the principles of the two industries are the same, and I think that’s a big part of what we’re trying to do here. You’ve got brands that you need to build out around your team positions. You’ve got to be great builders of content. You’ve got to build a loyal fan base, and you have to engage fans – whether that be in how they consume content, what they buy in the way of merchandise and licensing products, or whether they attend or watch your events. The principles are all the same and we’re trying to apply those principles to our business every day.
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ESI: You’re involved with three franchised leagues now, all of which have big buy-ins. What is it about franchising that makes you think it’s a good investment?
CO: The way we look at the industry is an incredible growth opportunity, but, at the same time, up until recently, the industry has had a minimal barrier of entry. So what those leagues represent is the opportunity to invest in a scarce commodity. The opportunity to be part of a very exclusive group of franchise holders, partnered with the biggest publishers in the world.
“If you can be invested in a league that’s difficult to gain entry to, you’re going to hold that scarce commodity“
We think that when you marry that with the conversation around the growing global audience for these sports and for the industry broadly, we think that has great value. We also believe that over some period of time, there will be a watershed. There are thousands of the esports teams that exist around the world that play in various games and titles.
We believe there will be a centralisation, not only around these leagues but around the organisations that lead in these leagues. The ones that are built around a professional approach to business, with a model of traditional sports, will attract top talent to their organisations.
If you can be invested in a league that’s difficult to gain entry to, you’re going to hold that scarce commodity. We aim to grow its value over some time then, while we’re doing that, develop a business around it that is populated with great people.
ESI: Does it matter to you that you’ll have a bunch of franchised brands instead of a single identity that’s competing in all of the big competitions?
CO: We believe that this is the way of the future. If you subscribe to the idea of traditional sports, think of Manchester United or Real Madrid. A big part of the convention around the leagues that those teams play in is that you can build out your own brand position around those teams, you can build out your own strong and loyal fan following.
We think over time that will be the way that some esports largely go as well. We see great strength in city-based nomenclature, regional franchising.
ESI: Call of Duty esports has been around for a long time, but its growth has never been anything spectacular. How do you see franchising affecting the series?
CO: The model we have to look in on is the one who was already involved with, right? The Overwatch League has always been from its inception has always been a well-viewed esport, and if you go and look at the statistics around Twitch right now, the number one and number two esports titles are Overwatch and League of Legends.
We’re big believers in Activision Blizzard and Riot Games. As it relates to Call of Duty, we just subscribed to the model, and we think that the regional fan affinity that should grow up around these franchises will fuel the engagement around watching and ultimately around attending events.
“I think these franchise leagues will be a pivotal moment for the industry“
Think about what we saw just in Dallas a couple of weeks ago with the Homestand that was hosted by Activision Blizzard and the Dallas Fuel. There we 4,000 fans in an arena over three days, all compelled to watch Overwatch. The model that will apply to Call of Duty as we start that league up will be similar. We really like where it’s headed, and we think it has only great potential.
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ESI: Do you think that there’s a potential negative impact that could be made by ditching iconic brands such as OpTic Gaming and FaZe Clan?
CO: I think what’s happening is that we’re starting to see the maturity of the industry, around esports generally and around the sophistication of the organisations that are attached to those teams and those leagues. I believe we will see an evolution in how all of this comes to be. I think these franchise leagues will be a pivotal moment for the industry and its potential.
You’ll also see the emergence of new organisations and new teams with stronger fan followings and bigger audiences than we’ve seen in the past. That’s not to say that the future can’t be Cloud9, Team SoloMid, Fnatic, or some of those organisations that we have watched go so strong for now 10 or 15 years. But again, I do think that there’s going to be an emergence of some new orgs and strong groups in these leagues and we aspire to be one of those, that’s for sure.
ESI: Can you explain the process of acquiring a Call of Duty spot at all?
CO: It was super efficient for us. When we acquired the Overwatch League franchise, we had a conversation about the future of Call of Duty with Activision Blizzard and we expressed right away that if they intended to start up a league that had a similar business model, then we would be interested in speaking to them.
So when they announced their intention that they were ready to do that, we certainly signalled to them that we were ready to talk. We submitted our proposal, and it was turned around inside of a couple of weeks. We went out to California and had a great meeting with the team out there, and within two or three weeks after that, we were in a good place.
ESI: Was there ever a possibility of you acquiring a spot for a city other than Toronto?
CO: Our intention around Overwatch League and Call of Duty was always Toronto, we’ve realised our expectation there for ourselves. We’ve been looking around at different opportunities; we intend to build a global esports organisation here.
We believe that we’ll become a global media company and any organization that strives to be leaders in its industry has to keep its eyes open for those types of opportunities. I do expect that we’ll be looking around the globe for opportunities. We’re looking for opportunities that come with business models that make sense to us and that are consistent with our strategy.
“We really do believe in this regionality of fans.“
ESI: How important are home and away matches in franchising? Do you think they’re financially viable?
CO: Using the traditional sports model, we really do believe that that’s true. It’s down to building a local fan base; hosting live events in your market is an altogether different opportunity and discussion than playing as part of a studio experience in L.A., for example.
Like all of the other Overwatch League franchises right now, we’re working hard to be ready for that, as it’s laid out for shortly. League of Legends, by comparison, is a little harder for us to establish our Splyce team in the context of a game that’s experienced through a studio. We’re working on some new ideas in that context, and we’ll see how it all plays out.
We really do believe in this regionality of fans. We subscribe to the idea that when you’re a city-based or regional franchise, you have the opportunity to grow fan affinity and immersed in a community. That’s the difference maker in the way that we go about our business.
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ESI: Does introducing franchising to LEC seem like a positive move at the moment for you as a team owner?
CO: I’m new to it, of course, but our team has been a part of that community for a while, and we’ve seen the whole thing developed positively. We’ve certainly watched them be successful with some of their new marketing deals so I think you can make an argument that they’ve had a great start
It’s a business model that looks in a lot of ways similar to Overwatch league and soon Call of Duty, so that’s why we’re invested there. I believe in those people and in Riot Games’ ability to execute that well. What we want for ourselves is to be great leaders inside of their league, we want to be a strong, established franchise and to be competitive.
ESI: How did Abel “The Weeknd” Tesfaye get involved with OverActive Media?
CO: If you want to be leaders in this industry, then you certainly have to have a posture around the intersections that are represented in pop culture. There’s no doubt that that music has a big role to play in the esports industry and with our audience. We had an existing relationship with Abel and his team, so we started a conversation with them early. Abel is a fan of esports and a fan of gaming generally so he was quick to say that he was interested in what we’re doing here and took up the position.
We actually had our deal done with him a long time before we announced it. We were just kind of waiting for the right moment. It was met with great fanfare from our fans and our teams, and we’re working on some other things like this.
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