Real estate investor agrees to buy Outlaws for $40 million

Chris Chaney on the future of Houston Outlaws (1:25)

Former Infinite Esports president Chris Chaney tells Jacob Wolf he is really excited about the future for the Houston Outlaws and their upcoming season, and he says it's great to see the Outlaws in new hands. (1:25)

Houston real estate investor Lee Zieben has agreed to terms with Immortals Gaming Club to purchase the Houston Outlaws for a total deal value of $40 million, sources familiar with the deal told ESPN.

The deal has not been executed but is expected to close in late August, with Zieben currently having a binding letter of intent with Immortals for the purchase, according to sources. Paperwork submission to and approval of the Overwatch League is pending, league sources said.

If completed as expected, Zieben will pay $30 million in cash and securities and assume the $10 million debt in remaining payments to the Overwatch League for the Houston Outlaws franchise slot, sources said. Immortals declined to comment. Lee Zieben's office and the Overwatch League did not respond to a request for comment.

Immortals will sell the team after they acquired Infinite Esports & Entertainment, the parent of OpTic Gaming and the Outlaws, in June.

Immortals will retain their ownership of OpTic, splitting that team and the Outlaws for the first time. In June, Immortals completed a deal with Activision Blizzard to enter the franchised Call of Duty League that is set to launch in 2020.

The deal for Infinite saw Immortals guarantee payments of $35 million to $45 million worth of cash and equity share to Texas Esports -- backed by Texas Rangers owners Neil Leibman and Ray Davis and Houston Astros minority owner John Havens -- and Aurelius Esports, led by former Infinite president Chris Chaney. Immortals also assumed debts Infinite owed, including the Outlaws' Overwatch League payments and OpTic's remaining franchise fees to the League of Legends Championship Series, totaling the deal to an enterprise value of over $100 million.

With the acquisition of Infinite, the Overwatch League required Immortals to sell the Outlaws to a third party as quickly as possible, due to Immortals' ownership of the fellow league team, the Los Angeles Valiant. No team is allowed to own equity in two different teams in the Overwatch League.

In October, Infinite laid off 19 employees, and Chaney's job was cut as well. Chaney remained as a shareholder via his Aurelius entity. The company then promoted OpTic co-founder Ryan "J" Musselman to top executive role and began undergoing changes that would see it go up for sale in January. Musselman left his role at Infinite on July 19.

The Outlaws were first launched in October 2017 after Infinite agreed to purchase a slot in the Overwatch League for $20 million months before. A sister to OpTic, which Infinite acquired the majority that fall, the Outlaws quickly became one of the most popular teams in the Overwatch League.