Esports has become a rapidly growing industry, attracting millions of viewers and generating significant revenue. One of the key debates within the industry is whether franchising, a model that guarantees spots for paying franchisee teams, is helping or hurting the growth and development of esports. In this article, we will explore the origins of franchising in esports, its impact on the industry, and whether it is a sustainable model for the future.
The Open Circuit Model
Before the introduction of franchising, most esports operated under an open circuit format. Teams would qualify for tournaments, travel to attend them, and compete for championships based on their performance. This model had its benefits, allowing players to self-organize and reap the rewards of their hard work. Developers also liked this model as it required minimal involvement from them, and the game would gain exposure through tournaments and events.
The Rise of Franchising
However, as esports grew in popularity, some interested parties began to push back against the open circuit model. Developers wanted more control over their product and sought ways to monetize the industry. They believed that by introducing franchising, they could attract advertising and promotions, ultimately increasing revenue. Riot Games, the creators of League of Legends, took the lead in implementing franchising in their leagues, starting in 2013.
The Benefits and Concerns of Franchising
Franchising offered stability and financial security to teams, attracting big names from sports and entertainment who were willing to invest in the industry. It also addressed the issue of player and team turnover that often occurred in the open circuit model. However, concerns arose regarding the potential lack of competition and the detrimental effect on the level of play in esports.
The Success of Riot Games
Riot Games’ bet on their franchised leagues paid off. The level of play and entertainment continued to improve, and the game itself thrived. Viewership increased, and big names were willing to invest in regional spots. Other companies, such as Blizzard with Overwatch, followed suit and embraced franchising. However, the cracks in this model began to show during the pandemic in 2020.
Challenges and Changes
Broadcast deals, which rely on viewership, became a struggle for the Overwatch League, leading to financial issues for franchise teams. Advertisers became wary of Blizzard due to multiple scandals, further impacting revenue. In the face of these challenges, Overwatch League teams sought fiscal relief, and their outstanding franchise fees were waived. This situation forced the league to reconsider its structure and make substantial changes to accommodate the new reality.
In the North American LCS, Riot Games aimed to drive down costs, causing disputes with the players’ union. Eventually, the issues were resolved, but it highlighted the desire to reduce expenses and make franchising more sustainable.
The Open Circuit vs. Franchising
While franchising has its benefits, including stability and financial security, it also raises concerns about competition and the level of play. Some argue that the open circuit model allows for more organic growth, as teams have to earn their spots through performance. Valve, the developer of games like Counter-Strike and Dota 2, maintained an open circuit model, allowing different tournament organizers to flourish. However, even within the open circuit format, there were those who desired more exclusivity and control over the competition.
The Spirit of Esports
The spirit of esports lies in its competitiveness, the hunger to excel, and the fear of falling out of relevance. A more open system that favors competition allows players and teams to showcase their skills and rise to the top. While franchising offers stability, it may hinder the true essence of esports. Each system has its merits and drawbacks, and finding a balance between competition and stability is crucial for the industry’s growth.
In conclusion, franchising has had a significant impact on the esports industry, providing stability and financial security to teams and attracting big investors. However, concerns about competition and the level of play have arisen, as the open circuit model allows for more organic growth and showcases the true spirit of esports. Finding a balance between the two models is essential for the industry’s sustainability and continued growth.
