Blizzard’sOverwatchLeague was founded in 2016, and since then has been a fixture in the competitive gaming sphere, streaming its tournaments on Twitch and other services around the world, such as the Chinese platform Bilibili. While players are paid a salary for competing inOverwatchLeague, the U.S. Department of Justice is now looking into secret salary caps thatBlizzardhas in place, and questioning whether they could be violating the law.
While the competitive aspect of Blizzard’s team-based shooter has ultimately been a successful venture for Blizzard,OverwatchLeague hasn’t been without controversy. Notably, conflict has arisen among players regarding Blizzard’s handling of China’s position on Taiwan and Hong Kong, with the company disallowing the use of the nation’s namesby those participating inOverwatchLeague, casters included. The league is comprised primarily of teams from North America and China, with teams representing France, England and South Korea included as well. All ofOverwatchLeague’s teams are backed by independent ownership groups, such as Kraft Group, Bilibili, and Comcast subsidiary, Comcast Spectator.
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The league itself is structured similarly to traditional North American sports in terms of its format, however, unlike traditional sporting organizations like the NBA and NFL, there are no labor unions for players to join, making competitive salaries difficult to acquire. The probe launched by the Department of Justice, and being headed up by the Civil Conduct Task Force, is looking into Blizzard’s ‘soft salary cap’ on teams, a policy that actively punishes organizations if they pay salaries above an alleged $1.6 million. Teams paying more than that amount would be forced to pay a “luxury tax,” thus making it a costly process to offer large, competitive salaries toattractOverwatch Leagueplayers to their teams.
Blizzard is “cooperating accordingly” after receiving notice from the Department of Justice regarding the inquiry, and have instructed team executives to ensure they do not destroy any information regarding player salaries. While this is routine for government inquiries, the DOJ’s interest inOverwatchLeague’s soft salary caps implies that they may be in violation of the 1890 Sherman Antitrust Act, a law that prohibits “anticompetitive agreements” that seek to restrict competition in favor of profitability. Although the investigation by the DOJ is considered non-criminal, ifOverwatchLeague and Activision Blizzard are found to be in violation, it could be a major problem for the company, and it would only add to scrutiny over the company’s financial decisions, aftersalaries were revealed by Blizzard employeeslate last year in a bid for increased pay.
This controversial cap of player’s salaries comes at a time whenOverwatchLeague may be struggling, with viewership down from a peak of 47 thousand average viewers on Twitch in 2019 to around 17 thousand as of March 2021 and theOverwatchLeague finals seeing a 61-percent decline in average viewership in 2020 when compared to 2019’s numbers. While the investigation appears to be reasonably routine as it currently stands, it may spark conversation regarding esports player unions, as well as causing problems forOverwatchLeague’s overall structure as a competitive institution. With players already dismayed by clauses thedisallow them from criticizingOverwatchLeague, this latest development will likely make unionizing look better than ever.
