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Overwatch League adds first UK franchise

London team will be owned by Cloud9, second Los Angeles team will be owned by Kroenke Sports & Entertainment

Activision Blizzard has added two more franchises to the Overwatch League, including a London-based team that will be its first in Europe.

Kroenke Sports & Entertainment, which owns controlling stakes in Arsenal, the L.A. Rams and the Denver Nuggets, will have a team based in Los Angeles. The London franchise will be owned by Jack Etienne, founder of the successful esports organisation Cloud9.

The Overwatch League already has seven franchises: five in the US, one in Shanghai, and one in Seoul. The Kroenkes' investment will give Los Angeles its second team, in addition to one owned by esports firm The Immortals.

Pete Vlastelica, CEO of the Activision Blizzard owned Major League Gaming, told The Verge that not only can L.A. sustain two Overwatch League teams, the difference between them speaks to what the league is trying to achieve.

"These two owners in particular will hopefully clarify a little bit how we're going about building this league," he said. "Which is to say we're pulling the best from the worlds of esports and traditional sports, so that these owners can learn from each other."

Initially, the Overwatch League's reported $20 million franchise fee was framed as being hostile to "endemics", a term used to describe teams that emerged directly from the grassroots esports scene.

However, Cloud9 will be the fourth endemic team to own a franchise in the Overwatch League, versus just three teams owned by traditional sports organisations like Kroenke Sports & Entertainment. The other two are owned by NetEase and former Kabam CEO Kevin Chou.

From the perspective of Cloud9, buying into the Overwatch League was an opportunity to be the first in Europe, and the only team in London. Speaking to Forbes, Etienne acknowledged the "large" franchise fee, but paying it promised access to a captive market.

"It really expands to all of England," he said. "For ticket sales and local sponsorships, I'm going to be able to tap a really unique and large area where there's no competition in reaching these folks, whereas all the North American teams will be competing for the same sponsorships and fans to show up to events."

Etienne expects to recoup his investment and turn a profit within two years. Activision Blizzard will announce more franchises before the Overwatch League officially starts later this year, with a view to expand to 28 teams in the long-term.

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