Leaked Overwatch League memo drastically shifts housing requirements, confirms “luxury tax”

Dexerto has obtained a leaked memo from the Overwatch League that reveals they will be changing the rules surrounding player housing requirements for franchised teams. The memo was issued by Jon Spector, the Senior Director for Product Strategy & Business Operations at Activision Blizzard Esports, and states that franchised teams will have reduced commitment to providing player housing in the 2020 season.

Points of interest include that while teams are still required to provide housing for newly acquired players for the first 90 days of their contract, beyond that the teams would no longer have any obligation. If the team does indeed choose to not provide housing for its players they must submit a plan to help players find houses to the league office that must be approved.

Sources working in the league have told Dexerto that the memo was issued following growing concerns from teams about the growing expenses they will incur as the league moves into the homestand model in 2020.

“Most teams will be on the road in 2020 so it’s not a deal breaker or anything but it does show that the league teams are looking to reduce costs” one source said.

• Read More: Canada coach Tikatee on roster, 2-2-2, xQc, Sigma and more

Another source working within an Overwatch franchise said “of all the costs to be reduced this is probably the one teams were actually least bothered about. What I think would have been better was if we got some relief when it came to travel and hotel expenses, especially with the plans for 2020.”

The leaked memo from Jon Spector, Senior Director for Product Strategy & Business Operations at Activision Blizzard Esports

“I doubt many of the top teams will even look to utilize this because it will become a bargaining tool when it comes to negotiating player contracts. If one team is offering housing and the other isn’t players will look to go to the former” they added.

• Read More: What went wrong with OpTic and Houston Outlaws

Mentioned in the memo is also how financial reimbursement in lieu of housing will not contribute to the “Competitive Balance Tax” for the season. Dexerto understands that the Competitive Balance Tax is the term Activision Blizzard adopted from Major League Baseball that operates as the soft salary cap or “luxury tax” within the league. Although this has been mentioned before publicly by former London Spitfire General Manager and discussed by the community, it has never been formally acknowledged by Activision Blizzard in a public setting.

Susie Kim commented on the “luxury tax” last season in a now-deleted tweet.

The memo makes it clear that teams will still be obligated to cover all accommodation costs for players, as well as providing a per diem, for players when they are traveling to homestand matches in the 2020 season. Teams are also allowed to go beyond the minimum requirements without it contributing to the Competitive Balance Tax for the season. 

Dexerto has reached out to the Overwatch League office for comment on the leaked document, but has yet to hear back as of press time.