Overwatch League Being Investigated by U.S. Department of Justice Over "Soft Salary Cap"

Activision Blizzard's Overwatch League has received an antitrust inquiry from the U.S. Department [...]

Activision Blizzard's Overwatch League has received an antitrust inquiry from the U.S. Department of Justice over a "soft salary cap" that it has in place. According to reporting from Dot Esports, this is not a criminal investigation, and is being headed by Kathleen Simpson Kiernan, a trial attorney for the DOJ. Overwatch League apparently sets a salary cap of $1.6 million per team; those that pass that threshold must pay a luxury tax, and the money obtained from the tax is then passed down to other teams in the league. Speaking to Dot Esports, a spokesperson for Activision Blizzard addressed the investigation.

"We have received an inquiry from the Department of Justice and are cooperating accordingly," the spokesperson told Dot Esports. "We deliver epic entertainment to our fans and support our players and teams in producing the most competitive and enjoyable esports leagues in the world."

Apparently, based on the way salaries work in the league, few teams have ever "naturally crossed this threshold," so it's hard to say what kind of impact the policy might have actually had. The issue at hand relates to the fact that Overwatch League does not have a player's union. Other professional sports leagues that do have player's unions, such as the NBA or NFL, are able to apply for a "nonstatutory labor exemption."

It will be interesting to see what comes of this inquiry! Overwatch League has proven to be a massive success for Activision Blizzard, and this inquiry won't lead to it going anywhere. However, as a result, we could see Overwatch League forced to drop the salary cap, or adopt a player's union. Either of these options could lead to more competitive salaries overall. At this time, it's still too early to know for sure exactly how things will play out. Still, it shows just how much esports have grown over the last few years, and it stands as a testament to the fact that they won't be going away anytime soon.

Are you interested to see what comes of this investigation? Do you think that Overwatch League needs a player's union? Let us know in the comments or share your thoughts directly on Twitter at @Marcdachamp to talk all things gaming!