Toronto Ultra and Toronto Defiant Owner Reports $27.2 Million Net Loss in 2022
The owner of Call of Duty League team Toronto Ultra and Overwatch League team Toronto Defiant recorded a net loss of $27.2 million for 2022.
OverActive Media recently announced its end-of-year financial results, revealing a shocking loss. It was an increase from its net loss in 2021, which was $14.29. According to OverActive Media, the net loss figure includes “a non-cash impairment charge of $25.19 million,” which wasn’t recognized last year. This refers to an asset that does not have a lot of value.
“We have reviewed the carrying value of our intangible assets and reduced them to an amount that better represents fair value in the current environment,” Rikesh Shah, Chief Financial Officer at OverActive Media, said in a statement. “This has resulted in an impairment charge in the fourth quarter and fiscal 2022. These non-cash charges do not affect our continuing operations.”
This has left esports fans — especially OWL viewers — wondering what happened.
What Led to a $27.2 Million Loss?
At the end of 2022, OverActive Media reported that it had cash and cash equivalents of $10.01 million, a decrease from what it had available last year, $21.80 million. It was explained that a lot of the increased loss was attributed to an investment in pro players, staff, and products “for future success.”
This sounds like a lot of money lost, but OverActive Media appeared positive in its view of 2022. The company claimed it had $10.45 million in total revenue for 2022, the same as 2021, including a 23% increase in business operations.
Said Co-Founder and CEO Adam Adamou: “As co-founder of this company, I am pleased to say that the core aspects of our business thesis are coming to fruition.”
OverActive Media stated that it will remain “invested in the future of esports.” The company has teams in a variety of games, including Toronto Ultra in the Call of Duty League, Toronto Defiant in the Overwatch League, and MAD Lions in the LEC and VALORANT NA Challengers League. With so many successful teams, what’s the issue?
It may well be the Overwatch League itself. Blizzard was still owed up to $420 million in franchise fees in 2022 since it deferred payments for two years during the global health crisis. But many Overwatch League teams fought back, threatening to sue Blizzard — and OverActive Media is leading the charge.
OverActive Media Taking Legal Action Against Blizzard
To join the Overwatch League, Toronto Defiant had to pay between $7.5 million to $10 million to be in the franchise. Then it costs about $1 million a year to have an Overwatch League team. Meanwhile, however, OverActive Media felt that Blizzard wasn’t keeping up their end of the viewership and financial promises.
Since the inaugural Overwatch League season, viewership has severely dropped. Blizzard has also been the subject of controversy thanks to lawsuits regarding sexism in the workplace and employee harassment. Then Blizzard struggled to keep its games online in China despite 87% of the OWL’s viewership being from China, as their partnership with NetEase fell through.
A lack of viewership, partnerships, and sponsorships have left the teams bleeding money. Overwatch League teams are forced to lay off employees and start fundraising efforts to stay afloat. Being a part of the OWL hasn’t paid off as promised by Blizzard, so OverActive Media and a handful of other teams have decided to threaten legal action.
