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For some context, Riot Games asked for a franchising fee of $10 million when they moved their North American away from a promotion-relegation system to one where teams keep their spots even after a bad season. Since this change player salaries have increased from an average salary of $105,000 per year, closer to $150,000 with sponsorship deals and streaming in the mix, to $320,000 per year. Some of the top paid players earn over $1 million per year. The players are also guaranteed to receive at least 35% of league revenue even if their collective salaries would be less than that.
Teams in the NA LCS tend to have 5 players on that salary level and then 5 other lower level players making less than that. If we assume the lower level players make half that's $2.4 million in just player salaries yearly per franchise. This doesn't factor in coaches, managers, facilities, and other expenses which could easily put yearly expenses for a team into the $3 to $4 million range yearly. Investors wouldn't have bought into the league if they didn't expect to turn a profit though, given the league is in its first year still, we won't know if any teams have started earning back their franchising fee just yet.
Blizzard is asking for a much larger investment for a game that has less of a history behind it. League has been running its competitive scene in an organized way since very near to the game's launch and has had organized pro level play since 2011. Viewership numbers between the two scenes are also difficult to compare as the Overwatch League is one giant global league while League of Legends has 14 smaller leagues with their own standings and playoffs that then feeds into an end of season tournament to crown a world champion. Not all of LoL's 14 leagues are equal in terms of skill, player base, and viewership but the main 4 North America, Europe, China, and Korea are going to have significance in terms of generating revenue.
Still, you can see a breakdown of viewership numbers for LoL's North American region and Overwatch here: Why Comparing Viewership in Esports is Imperfect, But Necessary - The Esports Observer
Based on the article and my own knowledge of E-sports Overwatch may have the better exclusive deals with Twitch and ESPN but especially with their EU region franchising for next season LoL probably has many more monetized eyeballs watching their games.
All this is to say that the buy-in for an Overwatch team is likely too high if we assume that Riot wasn't asking for lowball numbers for LoL teams when they franchised last year. That isn't to say that it's a bad investment or even to say that a LoL team is a better one but it's some food for thought.
Teams in the NA LCS tend to have 5 players on that salary level and then 5 other lower level players making less than that. If we assume the lower level players make half that's $2.4 million in just player salaries yearly per franchise. This doesn't factor in coaches, managers, facilities, and other expenses which could easily put yearly expenses for a team into the $3 to $4 million range yearly. Investors wouldn't have bought into the league if they didn't expect to turn a profit though, given the league is in its first year still, we won't know if any teams have started earning back their franchising fee just yet.
Blizzard is asking for a much larger investment for a game that has less of a history behind it. League has been running its competitive scene in an organized way since very near to the game's launch and has had organized pro level play since 2011. Viewership numbers between the two scenes are also difficult to compare as the Overwatch League is one giant global league while League of Legends has 14 smaller leagues with their own standings and playoffs that then feeds into an end of season tournament to crown a world champion. Not all of LoL's 14 leagues are equal in terms of skill, player base, and viewership but the main 4 North America, Europe, China, and Korea are going to have significance in terms of generating revenue.
Still, you can see a breakdown of viewership numbers for LoL's North American region and Overwatch here: Why Comparing Viewership in Esports is Imperfect, But Necessary - The Esports Observer
Based on the article and my own knowledge of E-sports Overwatch may have the better exclusive deals with Twitch and ESPN but especially with their EU region franchising for next season LoL probably has many more monetized eyeballs watching their games.
All this is to say that the buy-in for an Overwatch team is likely too high if we assume that Riot wasn't asking for lowball numbers for LoL teams when they franchised last year. That isn't to say that it's a bad investment or even to say that a LoL team is a better one but it's some food for thought.