OWL owners granted first right of negotiation for possible Call of Duty franchising, sources say

The Call of Duty World League logo. Provided by Activision

Activision Blizzard is evaluating its options to move to a franchise model for its Call of Duty World League following successful sales in its Overwatch League, according to its 2017 public annual report released in April, which was resurfaced by Dot Esports earlier this week.

In the company's franchise contracts with existing Overwatch League owners, those owners are granted a first right of negotiation for slots in the Call of Duty World League, league sources told ESPN. Activision Blizzard is contractually obligated to approach those owners first when it begins exploring franchise opportunities for the Call of Duty World League, according to sources. Activision Blizzard did not respond to requests for comment.

Each of the founding Overwatch League franchises agreed to pay Activision Blizzard $20 million for their slots over a multiyear period. According to team sources, those agreements were just as much about participating in the Overwatch League itself as they were about building a strong relationship with Activision Blizzard for future titles.

Activision Blizzard is assessing how to integrate the OWL ownership groups -- 10 of which do not hold teams in Call of Duty at this time -- with existing Call of Duty participating teams, per sources. Only two, Dallas Fuel owner Team Envy and Houston Outlaws sister OpTic Gaming, have teams in both professional Overwatch and Call of Duty.

Specific details of franchise price and league launch date have not been disclosed.

Activision Blizzard launched a new division in April called Activision Blizzard Esports Leagues, which now oversees league operations, franchise and sponsorship sales and development of both the Overwatch League and Call of Duty World League. That subsidiary is led by former Fox Sports executive Pete Vlastelica, who joined Activision Blizzard in September 2016 as the CEO of MLG, which Activision Blizzard acquired for $46 million in January of that year. MLG obtained the exclusive operating license for the Call of Duty World League shortly after that acquisition.

In May, Activision Blizzard revealed Call of Duty: Black Ops 4, the latest installment of the 15-year-old franchise. During that event, Treyarch chairman Mark Lamia hinted that Activision Blizzard might discontinue the yearly release cycle of the Call of Duty -- which sees the esports scene move from installment to installment every fall. Black Ops 4 is set to release on Oct. 12.

"It's the deepest, most replayable game we've ever made across the three pillars of Black Ops 4, multiplayer, zombies and our new mode, blackout," Lamia said. "This is a game for every kind of player. It's a game that's built to last for years to come."

Other successful esports titles have not featured sequels over their life cycle. League of Legends, the most watched game in the industry, released in 2009 and its developer Riot Games has continued to release updates and game changes since -- although in multiple interviews, it has been outspoken about ever releasing a sequel. Other titles, such as Dota and Counter-Strike, have released sequels but have given their games extremely long life cycles in between installments.

Since its launch in January, the Overwatch League has accumulated over $150 million in broadcasting rights and sponsorship deals, league sources said. That includes a $90 million, two-year Twitch streaming deal, a $17 million, two-year HP Omen sponsorship deal and a $10 million, two-year Intel deal, according to sources. The league is ahead of its revenue schedule and Activision Blizzard said in the annual report that it wants to use its lessons learned in Overwatch esports and apply those to Call of Duty esports.

The Call of Duty World League was founded in 2016, but pro esports competitions for the game have existed since before the release of Call of Duty 4: Modern Warfare, which released in 2007. Call of Duty has been a staple of the esports as the industry has grown from infancy to a predicted $1 billion industry by 2019, according to a February report by analytics company Newzoo.