Imagine a time in the near future when a Toronto venue is full some 50 nights a year with cheering fans decked out in team merchandise, watching a squad of professional video gamers compete.
One night, the city’s Overwatch League (OWL) franchise might take the stage against a team from Boston or Philadelphia, before a crowd spotted with die-hard followers, some in full hero costume. Another night, Call of Duty enthusiasts might fill the place to see a local team shoot for glory in that multiplayer game, projected on jumbo video screens with commentators describing the action.
Helping to bring that vision to life in Toronto is Canadian sports executive Chris Overholt, who has worked for the Toronto Raptors, Miami Dolphins and Florida Panthers. He left his job of seven years as chief executive of the Canadian Olympic Committee to become president and CEO of OverActive Media, which calls itself Canada’s first professional e-sports ownership group. Founded a year ago, OverActive Media has already acquired teams in several pro gaming competitions, including the Toronto Defiant, an expansion franchise that is set to debut on Feb. 15 in season two of the OWL.
Professional e-sports is a growing industry in which the most skilled play for money, and to large audiences watching live in-person and online. Polished new leagues and competitions are forming, with sponsors, investors and broadcasters eagerly aboard – and pouring millions of dollars into the industry.
OverActive Media is modelling itself after the big sports and entertainment companies that own and operate multiple teams across traditional sports leagues, such as Maple Leaf Sports & Entertainment (MLSE), which owns the Toronto Maple Leafs, Raptors, Argonauts and Toronto FC.
“On an aspirational basis, we’re setting out to build the MLSE or the Madison Square Garden Company of e-sports,” Overholt, 54, said during a lengthy interview, flipping open his laptop to display a chart he shows interested investors or sponsors. It compares OverActive Media to major sports ownership companies and the Defiant to a traditional sports franchise, such as the Raptors.
Some 40 million people play Overwatch worldwide, according to a Statista report published in November. The OWL, which debuted with 12 teams last season, will expand to 20 this year, all backed by deep-pocketed owners and based in major cities across North America, Europe and China. It’s the first major global e-sports league with city-based teams.
Players in the OWL come from all over the world, but the largest number come from South Korea, where Overwatch is wildly popular, and there are vibrant communities playing it competitively, live and in groups. South Korea was a logical place for Defiant head coach Beoumjun (Bishop) Lee to scout talent – rather like NHL teams scout Canada for young hockey players. Five teams – including the Defiant – are composed of all South Korean players.
OWL players make a minimum of US$50,000 a year, plus benefits, housing and a portion of the team’s winnings. Their season runs from February to August and they’ll play 28 games against teams representing cities from around the world.
Because this year most games are run out of a central location in Los Angeles, Toronto Defiant players are housed in a sprawling eight-bedroom luxury home in Beverley Hills, with its own basketball court and pool. Their team staff includes a general manager, two coaches, an analytics expert, a team chef and a translator, since most of the players speak only a little English.
“This isn’t your mother’s basement stuff; this is a professional e-sports organization,” Overholt said. “It’s going to be a strategy of ours to be very good at how we look after our players.”
OverActive Media also has a franchise playing overseas in the League of Legends European Championship, one run by game developer Riot Games and formatted with a promotion and relegation, like European soccer. Overholt said if Blizzard’s Call of Duty World League goes to a franchise model, OverActive Media plans to pursue a team in that league, too.
“This model makes sense to us because it’s a city-based or regional franchise,” Overholt said. “They’ll all play in major leagues with good business models where we share in revenue and enterprise growth in those leagues, as opposed to just playing in tournaments for prize money.”
OverActive is on the clock to have a Toronto venue secured for 2020, although Overholt does not yet know where it will be or what size. All OWL teams will host home contests in their own cities next season. For now, fans who want to make an occasion of watching the Defiant’s first-ever match next week can gather at the official viewing party at Real Sports Bar on Feb. 15.
Adam Adamou, a venture capitalist and OverActive Media’s co-founder, had the idea to buy an OWL franchise for Toronto last winter. He and business partner, tech entrepreneur Sheldon Pollack, had already invested in some small Canadian e-sports tech companies, which led them to look more closely at the industry.
Adamou sat with his kids one February, 2018, weekend and tuned into Twitch, a popular live video game-streaming website, for the debut of the OWL. He was profoundly entertained, and he learned that the viewership was huge and several well-known sports owners had bought franchises for US$20-million apiece.
“Sheldon and I thought this is the single biggest opportunity we have in front of us – getting an Overwatch League franchise and developing an organization that owns franchises in e-sports,” Adamou said. “I didn’t think many people were looking at the time and figured we were about a year ahead of everyone and should do it before everyone else woke up. But we didn’t know anything about operating an e-sports team.”
Pollack called Overholt. The two had met long before Overholt became a well-known sports executive, when they both worked in the computer hardware business. They needed his sports business advice to help make their pitch for a franchise.
They bid against lots of other cities for the franchise, which included a host city visit in Toronto from OWL executives. OverActive Media acquired Rochester-based e-sports company Splyce, which came with a stable of teams and a complete franchise operations staff. They also joined forces with a competing Toronto bidder – Michael Kimel, part-owner of the Pittsburgh Penguins.
OverActive Media was awarded one of the eight expansion franchises for the 2019 season, along with Vancouver, Atlanta, Washington, Paris and Chengdu, Guangzhou and Hangzhou, China – teams that reportedly each sold for more than US$35-million. OverActive Media has been able to raise two separate rounds of equity funding since landing the OWL franchise, worth more than $21-million each.
“We want big global cities in the league, and Toronto fits that bill,” OWL commissioner Nate Nanzer said. “It has great energy, an incredibly diverse population, and lots of young people. We’re really excited about the ownership group in Toronto, which has great resources and experiences. And being able to tap Chris’s expertise from the traditional sports world and apply it to e-sports will benefit all of us.”
Many team owners and executives from traditional sports are buying e-sports franchises and helping shape infrastructure of the leagues. Several OWL franchises are owned or run by pro sports groups, such as the Vancouver Titans, owned by Aquillini Group of the NHL’s Vancouver Canucks. Others are owned by New England Patriots ownership The Kraft Group, New York Mets sister company Sterling.VC, Denver Nuggets and Los Angeles Rams owners the Kroenkes and Philadelphia Flyers parent company Comcast Spectacor.
Overholt’s decision to leave his most recent job as the CEO of the Canadian Olympic Committee was tough. He’d been there during a prosperous time for Canadian Olympians, through the London, Sochi, Rio and Pyeongchang Olympics. His colleagues had mixed reactions to his career move. Many in their 20s or 30s – some of them gaming enthusiasts – applauded him. Then there was the larger group.
“I had some people closer to my age say ‘What are you doing? You just left the Olympic movement,’” Overholt said. “I told them I didn’t take the decision lightly, but I’m a builder; I’m not a maintenance guy. I have a habit of looking for new opportunities that require me to build strategy and results, and to drive revenue. This is another opportunity to do that. I’d rather be 54 and do that on my own terms and work on something I’m passionate about, than wait for someone to tell me I’m not relevant any more.”
Fast-forward to earlier this month, and Overholt found himself at an afternoon photo and video shoot with the eight pro video gamers who make up the Toronto Defiant. It was the first-ever visit to Toronto for the eight gamers, all men from South Korea, aged 18 to 24, who either played for another team in the OWL last season or back in South Korea, where there are strong minor leagues.
Wearing matching black hoodies, track pants and sneakers, the gamers stepped out onto a frigid terrace for photos. They’d been filming around Toronto all day, flanked by a coach and general manager, both wearing three-piece suits. They also visited an EB Games that weekend, where hundreds of gaming enthusiasts lined up to meet the newest Toronto team.
Overholt hopes OverActive Media can also take a leadership role in writing best practices about work-life balance that promotes health and wellness for e-sports players, akin to projects the COC planned for its Olympic athletes to help them prepare for life after sport. He also sees a live event business springing from the Toronto venue, which may allow companies or the public to stage their own e-sports events.
In a 2018 report, Goldman Sachs projected total e-sports annual global revenue of US$2.96-billion by 2022 and an audience of 276 million – surpassing many major traditional sports leagues. Deloitte-owned Market Gravity just researched the industry so they can offer business advice to traditional sports organizations on how to capitalize on the skyrocketing e-sports industry.
“A lot of sports businesses told us that e-sports is the most important thing they’re not yet currently doing,” said Iain Montgomery, managing director of Market Gravity Canada.
Many universities have competitive e-sports clubs, course work and scholarships. Prize money in e-sports tournaments is skyrocketing. Last year alone, Epic Games gave away US$100-million in prize money at tournaments for its wildly popular title Fortnite.
Big sponsors are jumping in – the Overwatch League has the likes of Toyota, T-Mobile and Spotify. It has deals to broadcast on Disney-controlled networks ESPN, Disney XD and ABC and a streaming deal on Twitch, on which 74 million hours were watched, making it the platform’s fourth most popular channel in 2018. Its Grand Finals packed the 20,000-seat Barclays Center, home to the New York Islanders and Brooklyn Nets. The champion London Spitfire won US$1-million, while the runner-up Philadelphia Fusion earned US$400,000.
And Toronto fans have already sold out Scotiabank Arena when MLSE hosted a one-off e-sports event, the North American League of Legends (LoL) Championship Series Summer Finals, in August, 2016.
So are these indicators that the Defiant and any future e-sports clubs in the city could regularly fill a venue in Toronto and attract big fan interest?
“I can definitely envision it, because arenas have sold out for e-sports in other markets, and we know there are pockets of e-sports communities in Toronto and experts in the city,” said Cheri Bradish, a research chair in sport marketing at Ryerson University.
“For someone like Chris that wants to be a leader in this space, you have to make big moves.”