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Vlastelica addresses criticism, future of Overwatch League

Activision Blizzard Esports president and CEO Pete Vlastelica said he will remain the commissioner of the Overwatch League for the foreseeable future as the OWL closes out Season 2 and prepares for its first geolocated season in 2020. Photo by Tonya McCahon/Provided by Blizzard Entertainment

In May, then-Overwatch League commissioner Nate Nanzer announced he'd be leaving Activision Blizzard after a nearly five-year tenure, three of which saw him act as one of the most front-facing people in charge of Overwatch esports, to join Fortnite creator Epic Games.

His departure, which came in the middle of the Season 2 of the Overwatch League, left a void during an integral year for the esport. Activision Blizzard's answer came in the form of their top esports executive, former Fox Sports executive vice president Pete Vlastelica, who was named as Nanzer's replacement while also fulfilling his role as president and CEO of Activision Blizzard Esports.

In an interview, Vlastelica told ESPN he'd remain in the Overwatch League commissioner role for the foreseeable future as the league looks to expand and run events around 20 different cities around the world in 2020.

"We have a season that we need to finish, and we have another season we need to launch next year," Vlastelica said. "We couldn't afford the disruption of launching a big search to go out and find somebody externally to take on this role. A lot of the role of commissioner is a lot of work I've been doing already anyway. If you talked to owners, they'd probably, in general, agree with that. A lot of the work of commissioner is work that some of the other people who had worked for Nate or had worked around Nate were ready to step up and do more of."

Vlastelica has been responsible for the Activision Blizzard Esports Leagues arm of the company since joining the company in late 2016. One of his first tasks was helping to create the Overwatch League.

Vlastelica was involved in the franchise sales process, helping recruit the likes of New England Patriots owner Robert Kraft, Los Angeles Rams owner Stan Kroenke and other notable technology and business executives to buy into the league for $20 million per franchise in their first season and then $35 to $60 million in their second. His role expanded, however, when the company decided to build a Call of Duty league, set to launch in 2020, that will feature a similar geolocated model to the Overwatch League.

With moving Overwatch teams to their home market comes a big league responsibility: to make each of them profitable and earn those investors their return on investment. Vlastelica said he doesn't view that as pressure, but more as a responsibility.

"My No. 1 success metric, and one of the metrics I drive the team toward, is the growth of the value of a franchise that all of these ownership groups have acquired," Vlastelica said. "They made big bets on us, and we're making big bets on them in return. Part of the way we're betting on them in return is by helping steward their investment. Absolutely, if you were a fly on the wall in any league front office meeting, the North Star that we come back to time and time again is that the health of our teams' businesses and the growth of the value of the franchise."

In its second season, Overwatch League concurrent viewership on Twitch has gone down, but the league has seen increased number of hours watched by their consumers, according to The Esports Observer. Vlastelica said its too early to tell the full story on viewership -- that he'll wait until the completion of the season and the grand final, which will take place live at the Wells Fargo Center in Philadelphia on Sept. 29.

Many of the Overwatch League's broadcasting and sponsorship deals expire at the end of 2019, including a two-year, $90 million Twitch deal that was significantly above market rate when it finalized in late 2017. Vlastelica said he remains confident that the league will be in a position of strength with negotiations of its broadcasting and sponsorship deals moving forward.

"We're early in this, so I don't know all the dynamics yet," Vlastelica said. "There does seem to be a trend in sort of the growth of viewership over the course of a stage. We'll see that in stage three and stage four. You really can't tell the story until the grand finals. That will happen in the window of time when we're having those conversations about renewals with our current distribution partners or new partnerships with new platforms.

"I don't agree that Twitch should be described as a monopoly, there are a lot of platforms worldwide that are capable of the kind of distribution that Twitch is capable of. That said, we have a great partnership with them. A couple of them own teams in our league, some of which have announced ambitions to expand internationally. There are other platforms, even here in the U.S., that have ambitions to bring more live, youth-oriented content onto their streaming platforms."

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CEO and President of Activision Blizzard Esports: Overwatch League belongs on TV

Pete Vlastelica, president and CEO of Activision Blizzard Esports Leagues, said he thinks esports have a place on traditional TV platforms and he enjoys seeing the comments from both supporters and critics about the trend.

Recently, Activision Blizzard has merged three entities, previously led by three different people: Blizzard Esports, led by Amy Morhaime, who left the company in December; MLG, which Activision Blizzard acquired for $46 million in January 2016, led by Mike Sepso until his departure in August; and Vlastelica's group. The three are now known as Activision Blizzard Esports.

The merger has led to internal and external criticism of Vlastelica's leadership, including a Dexerto report of in June about company morale falling. "People are really getting tired of working for Pete Vlastelica," a source told Dexerto. "The focus has become commercializing the esports titles instead of making good programs for the community. Many people internally are laying that on Pete, and it has crushed morale among the Call of Duty and Overwatch teams especially."

Vlastelica declined to comment on reports criticizing him specifically but noted that the merging of three esports groups inside the Activision Blizzard umbrella has come with challenges.

"We've gotten over a lot of the bumps in the road to make the merger happen," Vlastelica said. "One of the nice things that happens in situations like this is that after some of the dust settles from a combination of organization, people step up and recognize that there's opportunity in these moments. That's happened in all of the areas you're talking about. We've seen leaders emerge that recognize the company needs leadership at all levels in the organization, especially in moments like this of transition, and they're the ones to do the job.

"In any organization, when you try to combine groups, there's going to be challenges, but you get through them, and the way you get through them is by empowering the people who want the opportunity."

Under Vlastelica's leadership, the Overwatch League and the soon-to-launch Call of Duty league have been front and center, each recruiting big-name investors to buy-into the league as team owners. But now Vlastelica oversees all of Activision Blizzard's esports programs, including World of Warcraft, StarCraft and Hearthstone (Activision Blizzard shuttered their esports offerings in Heroes of the Storm in December).

Despite the focus on OWL and Call of Duty, Vlastelica said development in Activision Blizzard's other esports titles remains a priority for him as well.

"I don't agree that they are taking a backseat to Overwatch or Call of Duty," Vlastelica said. "We're doing something different with Overwatch and Call of Duty than what we're doing with any of those programs, which is we're building these partnership-driven businesses around those esports programs. We're not taking that approach to the other three, but that doesn't mean the other three aren't getting investment, aren't getting support from the executive producers of the games or the game teams, aren't receiving the resources they need from our organization to continue to grow."