OverActive Media rides out pandemic, looks to broaden esports footprint in the future

TORONTO — Chris Overholt describes 2020 as “the fastest two years of my life.”

But the president and CEO of OverActive Media has also seen plenty of positives for his esports company despite the confines of the global pandemic.

“Nobody, of course, would wish what’s gone on in the world on any of us,” Overholt said in an interview. “But I actually do think that whatever curve we imagined gaming and the esports industry to be on when we started all of this, I would say it’s definitely been accelerated in the last eight or nine months in particular.”

Overholt, the former CEO of the Canadian Olympic Committee, cites research suggesting there are more gamers today among Gen. Z and Millennials in Canada than there are “declared sports fans.” He says 70 per cent of people in that group identify themselves as gamers compared to 61 per cent who call themselves traditional sports fans.

“That statistic in itself kind of confirms our business thesis, that we have a whole generation of fans that think about sports and think about media in different ways. And they’re consuming it in different ways.”

Overholt says 5.7 million Canadians consider themselves gamers, up 33 per cent over the previous year. And 60 per cent of them are new Canadians — 50 per cent are women — “so this audience actually looks like this nation looks. And that’s exciting.”

“We feel fortunate to be in the place where we are,” said Overholt.

Being a gamer does not necessarily mean an interest in esports, however.

Overholt, who was the Toronto Raptors’ director of corporate marketing from 1996 to ’98 before serving as Maple Leaf Sports and Entertainment’s vice-president of sales and services from 1998 to 2003, compares it to the early days of the Raptors’ NBA life.

The challenge then was how to translate a general interest in basketball into demand for Raptors merchandise and games on TV.

“I think a lot of those lessons are applicable to our business today,” he said.

The initial OverActive vision was one team in one league. Two years on, it owns franchises in the Overwatch League (Toronto Defiant), Call of Duty League (Toronto Ultra), European League of Legends (MAD Lions, playing out of Spain) and Counter Strike: Global Offensive (also MAD Lions).

“Four franchises in the biggest and most important (esports) leagues in the world,” said Overholt. “We’ve raised $80 million in private investment in OverActive Media over the last two years.”

In August, TD Bank signed on as the official bank of the Defiant in the bank’s first foray into esports. Sponsors already on board include Bell, Universal Music, Canon Canada and Skip The Dishes.

“None of these business were thinking about or invested in esports just two years ago,” Overholt said.

OverActive, which employs 75 people globally, added some sizzle to its ownership this year in the form of Toronto Maple Leafs forward Mitch Marner. A keen gamer, Marner follows in the footsteps of music star The Weeknd, who came on board in April 2019.

They join an ownership group that includes more than 80 individuals, including Pittsburgh Penguins part-owner Mike Kimel, as well as tech entrepreneur Sheldon Pollack and Bell.

In recent weeks, OverActive’s teams surpassed the one-million fan mark across social channels.

In tandem with its teams, OverActive is looking to build a live event and online business. In May 2019, it acquired Toronto-based MediaXP, an esports-specific live events company that had partnered with the likes of Dome Productions and Red Bull Canada.

It was rebranded as OAM Live and, according to Overholt, is flourishing — helping NHL and NFL teams with their digital strategy.

Overholt says his company’s revenue opportunities include media rights secured via franchise holdings, marketing and local partnerships, and live events. COVID has curtailed live shows, with three Defiant and Ultra home events cancelled this year. Local revenue is down, although live events are expected to rebound.

Still Overholt says projected revenues are up this year — from what was expected last November and a revamped blueprint in March.

“So it’s hard not to be optimistic about what it looks like when we get to the other side of COVID,” he said.

A big piece of the puzzle is a state-of-the-art hotel and entertainment facility, on the Exhibition Place grounds next to Hotel X. The goal is to build a venue that seats 7,200 and would serve as the home of the Defiant and Ultra as well as hosting concerts, entertainment and sporting events.

Kimel, part of the OverActive ownership group, identified the land — a 2.6-hectare site just west of the Stanley Barracks. When the Library Collection of Hotels received permission to build the Hotel X on the Canadian National Exhibition grounds, it also got the green light for a second tower.

OverActive has since acquired those rights and is working with the city and CNE board on a plan to build the second tower with Henry Kallan, owner of the Library Hotel Collection. The proposal involves some 400 new hotel rooms and an entertainment venue that could function as a “global hub for esports” while hosting a steady stream of concerts and other events.

Bob Hunter, the former MLSE executive and Toronto Wolfpack chairman, is OverActive’s pointman on the project as senior vice-president of venue development.

“We have real momentum here, I think, that leads us to feeling only optimistic in getting this across the line, and getting the approvals we need to get going,” said Overholt. “We still have some work to do but we feel pretty excited about the momentum we’ve built.”

A price tag on the project is expected in January after costing work by a local construction partner is completed.

“This is a very significant project into the low hundreds of millions,” said Overholt.

In June, OverActive took over 1,400 square metres of new office space in the Liberty Village area. The offices serve as practice space for its players as well as its digital studio to create content, although the pandemic has restricted its use.

OverActive also has sponsorship connections to esports betting through MAD Lions, which has struck a partnership with the China-owned betting group DYVIP to sponsor its Counter Strike Global Offensive (CS: GO) franchise.

OverActive has also partnered with Kappa to outfit its MAD Lions teams in Europe.

OverActive is looking to become, in Overholt’s words, a Madison Square Garden or MLSE with esports at its core.

“Teams are the engine, of course, of that business,” he said.

MAD Lions reached the world championship of the European League of Legends the last two years. Its Counter Strike team won its season championship in March.

Season 4 of the Overwatch League is set to start in spring, later than the normal February start, with the two-time defending champion San Francisco Shock looking to defend their crown. The Shock won US$1.5 million with their 2020 title.

The Defiant finished 15th in the 20-team league at 8-14. The Vancouver Titans, the only other Canadian franchise and runners-up in 2019, were 18th at 6-15.

The Defiant have since made wholesale changes to their roster.

The Dallas Empire won the Call of Duty League, defeating the Atlanta FaZe 5-1 for the US$1.5 million prize. The Ultra finished seventh in the league standings at 11-13.

Overholt says, as in other sports, players will follow financial opportunity. But building the foundation is job No. 1 for OverActive rather than splashing the cash on big names.

“First and foremost we’re running a sustainable business here in an early stage-industry. And so our strategy is different than it seems the strategy of other teams. We want to build a sustainable performance strategy that over time gives a lot of attention to talent identification, gives a lot of attention to player development.”

“If we can do that really well, then we will always have players who want to play for us because we will be able to extend their careers,” he added.

In Europe, for example, OverActive has a full-time psychologist and physical trainer looking after its players.

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This report by The Canadian Press was first published Dec. 22, 2020

Neil Davidson, The Canadian Press