Esports seems to be taking a page out of the traditional sports playbook with its pursuit of franchising as a preferred league structure. The Call of Duty League (CDL), Overwatch League (OWL), and North American League of Legends Championship Series (NA LCS) have been quite popular since their inception, and many observers are now saying that franchising may be the future of esports.
But before we jump to a conclusion, why don’t we take a look at some of the pros and cons of joining a franchised league?
Pros
Stability for the Teams
There are a number of sports leagues around the world with a franchise system that eliminates the possibility of relegation, with many of them based in North America. The National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB), National Hockey League (NHL), and Major League Soccer (MLS) operate in a closed system that prevents promotion and relegation. These are structured in such a way that the teams’ participation in the league is guaranteed from year to year.
Since teams in a franchised league won’t get relegated after underperforming, they will have more marketability. They will also find it easier to develop a dedicated fanbase as a result of their staying power.
In other sports leagues, relegation can cause a lot of instability as a worse performing team may be relegated, given a reduced competition in the next level, or it can even cause them to stop competing all together.
Stability for the Players
Another benefit is the stability a franchised league offers to its players.
As a rule, teams in these leagues are required to offer their players a guaranteed minimum salary and a cut in the prize money from tournament wins. They also benefit from a fixed schedule and additional work benefits, ensuring these players get to enjoy a better lifestyle than those who have to rely on their tournament winnings.
With well-thought-out contracts and more stable pay, players in these leagues often find themselves in a more secure situation compared to their peers who have to compete in open circuits.
Sponsorships and Investors
Sponsorship money is very important in esports. The problem is that they aren’t always simple to come by, especially when a team cannot guarantee that they will continue to compete in the top leagues year after year. Without stability, sponsors will be hesitant to sign year-long contracts with a team.
Even if they don’t join franchised leagues, popular teams like Team Liquid and OG will always have sponsors because of their fan base. But what about the smaller teams?
With the franchising structure, these smaller teams will have a better chance of securing deals because there is no threat of relegation from the top leagues.
Cons
High Price to Join a League
The cost of franchise slots to join a league can be astronomical.
In 2017, Activision Blizzard sold 12 OWL franchise slots at $20 million per franchise, and it would go on to add eight more teams in 2018. Though the cost of an expansion slot was not made public, it was reported to be between $35 and $60 million.
In 2019, Activision Blizzard would also organize the 12-team CDL and sell the slots at $25 million per franchise. Riot Games decided to take up the idea as well. Riot sold 10 franchise slots for its NA LCS at $10 million to $13 million.
Just by looking at the fees involved, you’ll already know that smaller teams will have a difficult time coming up with the money necessary to join the top leagues.
Player Development
Franchising does take away the opportunities for players to reach the top of their respective esports.
The player development pipeline only functions well when there is a clear path to the top levels. Aspiring players must begin at the bottom and work their way up through amateur and semi-professional events until they or their team become notable enough to be picked up by a professional organization. In this setup, new talent can only join the league if teams decide to draft new players.
This cuts off many opportunities for new talent. It becomes difficult for amateurs to get recognized by professional organizations because there is less space for new players in the top levels.
No Relegation
There is no system of promotion and relegation in a franchised league. That means losing teams are never in serious jeopardy of being relegated from the top leagues.
Having no relegation in a league can lead to team mismanagement.There are fewer consequences for being at the bottom of the standings. Teams have less to lose from poor performance. The stakes just aren’t as great without the threat of relegation.
When leagues introduce promotion and relegation into their ruleset, they create an environment where every team has motivation to perform well or risk losing their competitive slot.
Wrap up
Despite all the changes and progress, there is still a lot of work to be done before franchising can become a sustainable practice in esports. The ultimate goal is to create a system that gives players opportunities while simultaneously making it sustainable for teams and organizers.
