Coming in Hot: The Sale of Esports Engine
Just a quick programming note on a hot story about ESL FACEIT Group's purchase of Videx/Esports Engine.
Today The Esports Advocate published a deep dive into the sale of Vindex/Esports Engine, based on the accounts of multiple sources familiar with the situation.
Here’s a sample from the article:
The sale of Vindex to ESL FACEIT Group (EFG) in March 2023 brought a strange sense of Déjà vu to Esports Engine employees who also worked together at Major League Gaming and later Activision Blizzard’s Esports division, according to multiple sources with knowledge of the situation who spoke on the condition of anonymity to The Esports Advocate. This and other details of EFG’s acquisition of the company were shared with TEA over the last several months from multiple sources, who told mostly the same story independently of each other.
The TLDR; according to sources, is that:
Employees who had equity in MLG did not receive any financial benefit when the company was sold to Activision Blizzard in late 2015 for $46M USD.
Similarly, when Vindex/Esports Engine was sold to EFG in March 2023 some (but not all) Esports Engine employees who had equity in the company received a small payment, but received no financial benefit from the actual sale based on their equity or the value of the company.
Like the sale of MLG, management at Vindex negotiated the deal quietly, and without knowledge or input from a majority of employees at Esports Engine.
Co-founders of Esports Engine learned of the sale after it was finalized by Vindex management. Other employees found out a week or two later. At the time, Apicella was on leave to take care of his mother, who had brain surgery and a cancer scare.
Some sources claim that co-founders Sundance DiGiovanni and Mike Sepso handled these negotiations quietly and on their own, while others claim that then-CEO Marshall Zelaznick probably knew as early as November or December of 2022 about these negotiations.
The cost of operations, building out LAN centers in North America, and leases for future locations related to Belong Gaming was a significant drain on collective company resources.
According to sources, Vindex management presented EFG with an overly optimistic projection of Esports Engine revenue in 2023, despite a downturn in the industry. Ultimately Esports Engine did not meet these projections and EFG used the numbers to claim underperformance and justify not providing employees in the newly acquired division various bonuses, and/or other benefits.
Read the whole thing here, and if you are not a fan of reading, listen to the audio version at the aforementioned link. Have a great weekend! - James