Mentioned in this article
- ESL and DreamHack parent company Modern Times Group (MTG) recorded a net sales growth of 4% to kr1.07B SEK ($110M USD) and a total net loss of kr123M ($16.6M).
- On the back of three “Masters,” 17 “Challengers,” and two “Open” tournament formats, the company reported a 12% growth to kr415M ($42.6M) in net esports sales.
- MTG initiated a strategic review of its gaming vertical to optimize long-term shareholder value. Considerations include an additional listing in the U.S.
Today, ESL and DreamHack parent, Swedish esports and gaming company Modern Times Group (MTG), announced its financial results for the third quarter of 2019. The company recorded a net sales growth of 4% to kr1.07B ($110M) from kr1.03B ($106M) in the same quarter last year. For the Q3 2019 period, MTG reported a total net loss of kr123M ($16.6M)
Net esports sales were up 12% to kr415M ($42.6M) for the period from kr370M ($38M) in Q3 2018. Out of the net esports sales, 58.6% or kr243M ($25M) were generated by MTG owned and operated properties, including ESL One Cologne, ESL One New York, and DreamHack Masters Malmö, while the remaining kr172M ($17.7M) was accounted for by other esports services.
The third quarter of 2019 was a busy period for the esports vertical of MTG. The company announced that its subsidiary ESL will handle the production of the Intel World Open, which is co-hosted by The International Olympic Committee and Intel, and will take place in the run-up to the 2020 Summer Olympics. The Intel World Open will and feature Rocket League and Street Fighter V competitions.
In September, MTG’s ESL and DreamHack assets announced the joint competitive Counter-Strike: Global Offensive format ESL Pro Tour, which features a $5M prize pool for 2020. Additionally, DreamHack announced during the same month that it will host two community tournaments featuring Fortnite with a prize pool of $250K each.
Also in September, MTG entered into a binding term sheet with Huya enabling the Chinese live-streaming platform to acquire a $30M stake in ESL and create a joint venture with the company to bring more global esports content to the Chinese market. Furthermore, the MTG VC fund invested kr10M ($1M) in three growth companies.
In terms of esports tournaments sponsorships, the company provided the information that sponsorship revenue was up 20% for the Counter-Strike: Global Offensive event ESL One New York compared to the same event last year. Moreover, MTG announced entering into an esports measurement agreement for esports portfolio companies ESL Gaming and DreamHack with Nielsen, an American information, data, and measurement firm.
Following the publication of its financial results today, MTG additionally announced the initiation of a strategic review of its gaming vertical, including the VC Fund’s gaming investments, to evaluate the best route to crystalize value for shareholders. As part of the strategic review, MTG will explore an additional public listing in the U.S.
“We have the opportunity to establish MTG as a global leader in the esports industry and we will accelerate value creation by further combining and extracting synergies in our ownership of the two strongest esports brands globally, aided by our solid financial position and commercial operational expertise,” said MTG President and CEO Jørgen Madsen Lindemann in a release. “We will consider all options for our gaming vertical to crystalize and create maximum shareholder value, and at the same time evaluate the potential for MTG as a global pure play esport company.”
Note: The Esports Observer used the exchange rate in effect as of Oct. 29 at a rate of 9.73068 SEK to 1 USD for currency conversions in this article.
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