AFK Weekly: Does the FTC's Involvement Change Anything for Activision Blizzard?
Hello everyone! FaZe Clan announced its collaboration with the National Football League ahead of the upcoming Super Bowl for a series of content activations aimed at cross-pollinating fan bases. This is just the latest in a series of collaborations that has seen FaZe Clan attempt to expand its presence via partnerships with mainstream brands including DC Comics, McDonald’s and Totino’s over the last few months.
The company is on track to become the world’s first publicly traded esports organization once its $1B USD SPAC deal with B.Riley Principal 150 Merger Corp (BRPM) closes in Q1 of 2022. Currently, esports revenue is generated mostly by advertising, sponsorships, ticket sales, and media rights, so getting listed on the NASDAQ could prove to be a game changer for the industry.
With that out of the way, here’s a breakdown of this week’s most impactful and important esports business news and more in the latest edition of Esports Business Insights by AFK Gaming.
- Vignesh Raghuram, Supervising Editor, AFK Gaming
The Nuances of an FTC Probe into Microsoft-Activision Blizzard Acquisition
While recent reports have highlighted the fact that the Federal Trade Commission will take the lead on looking into Microsoft’s planned $68.7B USD acquisition of Activision Blizzard, attorney Jeffrey S. Jacobovitz, an antitrust expert and partner at Washington D.C.-based law firm Arnall Golden Gregory, tells me that this news might not be as significant as people think it is because the Department of Justice and FTC have shared jurisdiction in the past when it has made sense on antitrust cases.
Jacobovitz also pointed to Microsoft’s past run-ins with both the DOJ and FTC back in the late 1990s, which he has familiarity with because he worked on parts of the case:
“I think the FTC and the DOJ have both shared jurisdiction over Microsoft in the past in one big initial case that was filed against it by the DOJ some years ago that started out at the FTC ...the commissioners tied two-to-two on the vote, so the DOJ took it over and [former Assistant Attorney General] Anne K. Bingaman brought the case against Microsoft.
“I happen to know that case because I represented a proposed intervener in it and I was involved every step of the way.”
He also believes that Microsoft would be wise to keep its promises when it comes to continuing to allow popular Activision Blizzard games such as Call of Duty to be made available on console platforms like Sony’s PlayStation or it could face serious actions that could unravel the deal:
“If five years down the road, their statements are [determined to be] inaccurate, the FTC could go back and try to unscramble the eggs,” he said. “In other words, break up the merger; they've done it in the past, not frequently, but it has happened, where they went back and tried to terminate a merger that had occurred previously, and sought a divestiture.”
No matter what Microsoft says or does in 2022, Jacobovitz thinks this deal will get a lot of scrutiny due to its scope, size, and overall impact on the gaming market.
“The merger is going to be scrutinized carefully, but whether it will be ultimately challenged or not, that's a different story. It's not clear, but certainly based on the statements coming out of the FTC on tech and the pressure being exerted by the legislature, I think that it will be a battle.”
You can read the full story here.
Noble Esports Staff Exit Company After Non-Payment Allegations
Several employees of Florida-based esports organization Noble Esports terminated their employment with the company after not receiving payment for their work. The organization's former Content Director Alice Chen, former Partnerships Manager Dan "Dizbog" Goodman, and other members of Noble's social media team took to Twitter to claim that the organization had failed to pay numerous employees at all levels of the company.
The Noble social media team also publicly called out the organization for refusing to pay them on Twitter–the account was deactivated shortly thereafter. Following this, Kyle McDougal, the owner of the organization, released a statement claiming that non-payments were related to bank issues. McDougal also admitted to using the organization’s bank accounts for cryptocurrency-related transactions which led to its bank locking down and closing its accounts. This bank account is McDougal’s personal account, according to a report from Dot Esports.
The report also contains multiple allegations of verbal abuse from McDougal including allegations that he berated employees for spreading a “political agenda” when the organization made a post about Trans Visibility Day. The organization was also reportedly “a place with a lot of heightened anxiety,” with multiple members on the content team having either experienced or witnessed verbal abuse from McDougal.
This isn’t the first time that Noble Esports has defaulted with payments; in early-2020, AFK Gaming reported that the organization had defaulted on payments to its Indian Free Fire and Wild Rift rosters, and stopped communicating with its players. The organization’s time in India was riddled with delays and mismanagement. The communication channel between McDougal and the players from various rosters was also not ideal, with the former not responding to the players’ and management’s queries for several days at a time.
McGougal has claimed that Noble Esports workers who have not received payment will be compensated for their work. But the overall experience has definitely left a bad impression of the organization who faces an uncertain future moving ahead.
Key Takeaway: Lack of payment was a common problem for years as the esports industry grew. Lesser esports organizations could take advantage of aspiring pros who had no representation and it would routinely lead to mistreatment. With the proliferation of esports talent management agencies, this problem has been rooted out at the highest levels of the industry for the most part, but it is clear that there is still room for exploitation among the smaller esports and less scrutinized teams.
Aim Lab partners with VCT EMEA
Aim Lab has signed a three-year partnership with the Valorant Champions Tour (VCT) EMEA. As part of the deal, the platform will collaborate on VCT content through the 2022 season focussing on player progression through training exercises and warm-up sessions.
Talon Esports inks NFT deal with Yesports
Talon Esports has partnered with Yesports to work on a line of Talon branded NFTs. The partnership will also see Talon gaining access to Web 3.0 and the metaverse features in the future.
Immortals signs multi-year partnership Bitstamp
Immortals has signed a three-year deal with Bitstamp that will see the latter become the official cryptocurrency exchange used by the Immortals’ esports teams. According to a release, this partnership will allow the esports team to explore future crypto integrations and NFT activations in the future.
Betway renews partnership with BLAST Premier
Online gambling platform Betway has renewed its partnership with Counter-Strike: Global Offensive esports series BLAST Premier for another two years. The partnerships will feature various activations during events, a new “Power Picks Prediction” segment, and branding during BLAST Premier events.
Yves Saint Laurent to sponsor China’s League of Legends Pro League
French beauty brand Yves Saint Laurent has signed a sponsorship deal with Chinese League of Legends operator TJ Sports for the League of Legends Pro League. Financial terms and length of the deal were not disclosed.
Weibo Gaming adds Razer and Panpan as sponsors
Weibo Gaming, the esports arm of Chinese social media platform Weibo signed sponsorship deals with hardware brand Razer and Chinese energy drink company Panpan for its League of Legends team. Financial terms of the deals were not disclosed.
LA Rams cover Super Bowl stadium with TimTheTatman’s Tweet
Complexity Gaming content creator Tim "TimTheTatman" Betar's prediction tweet about the Rams winning the Super Bowl is one of only a handful of tweets being displayed by Twitter Sports on the LED roof of SoFi Stadium in LA throughout Super Bowl week. Betar has been getting ribbed on by his peers on social media (here’s a brutal example) for his streak of terrible predictions during the playoffs.
Gambit Esports announces three-year deal with Herbalife Nutrition
Gambit Esports has partnered with Herbalife Nutrition for three years under which the nutrition company will be regarded as the official partner of all of its rosters. In 2016, Herbalife paid $200M to settle FTC charges alleging the company of deceiving consumers and restructured its multi-level marketing operations.
On the Horizon
IEM Katowice will kick off next week, shining the rare spotlight on StarCraft while also serving as a proper kick off to the year’s global Counter-Strike action. IEM Katowice is a multi-week event that has historically allowed CS:GO to dominate the esports conversation in February.
Blizzard Entertainment has also announced the release date for the next World of Warcraft patch, which means in just a few weeks Twitch will once again be dominated by the game’s unique marathon competition, the Race to World First.
People on the Move
It’s been a relatively quiet week for industry movers and shakers, night and day compared to all those exits and entries that happened in December and January. Here are this week’s notable movers and shakers in the esports and gaming industries:
Leonard Edwards joins Evil Geniuses as VP and head of global partnerships.
David Capretto has left Riot Games to join AWS Game Tech as principal of worldwide industry business development.
Jorge Mendoza exits EA after five years to join Reach Agency as director of gaming strategy.
Arturo Castro exits EA to join DreamHaven as its new Head of global marketing.
Philippe-Olivier Crépin joins Twitch as its new program manager for Twitch Rivals.
Tani Tozian has been named senior talent manager at G FUEL.
Tyler Brandon has been named associate talent manager at G FUEL.
Robert Hanes has joined Miami University as a professor of esports business.
BAYZ appoints Gui Barbosa as managing director.
Amal Arjun is appointed to the role of CEO at AKEF Play PVT LTD.
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