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On March 14 2012 09:41 Assirra wrote:Show nested quote +On March 14 2012 09:29 FairForever wrote:On March 14 2012 09:07 Assirra wrote:
And yet Sundance will still say they don't make enough money the moment they charge for something else. They didn't make any money, this isn't income, this is equity investment. Theoretically an equity investment shouldn't have any impact on their bottom line, so if they weren't making enough money before, then they aren't now. Well, from a Finance perspective, Weighted Average Cost of Capital = Debt portion * Weight + Required Return for Equity Investors * Weight. I don't believe the Market Debt / Equity ratio has changed (not looking at Book Value here) so the WACC, required return for the company, should be the same. I doubt you get investor's if the situation was as dire as Sundance makes it sound. Either that or he has to best way to convince people ever.
It's not dire. I think everyone knows that. Businesses can bleed money for years, even decades, and still be afloat (see: GM). You just need money, which is what MLG just got.
But it doesn't mean that MLG is doing well. They're not, financially, is my guess.
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Woah, that's a lot of money for eSports.
Please put them for good use MLG (more events, etc).
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On March 14 2012 10:00 coverpunch wrote:
I don't think it's "good" or "bad" that MLG gave up stock in the company. It only matters how those board members use their power. If they focus MLG on profitability, then yes, some things will probably make you unhappy - things will cost more, players and consumers will get less, etc. But certainly you might prefer MLG to have a longer life than to go out in a blaze of generous glory where they give everything to the players and fans for nothing and then go bust.
I certainly want MLG to be profitable, otherwise they die. Paying for stuff is a step in the right direction. Like I said the fact that they could secure additional funding shows investor confidence. Anything else is speculation. Now, why are the investors confident? Is it because they have already invested a lot and don't want to bail right now? Or is it because MLG looks like it will eventually show a profit. The fact that they have been pressed to show they can turn a profit suggests investors needed convincing. This again is both good and bad. Good because they succeeded, bad because they needed to show something completely different to do it.
The only other piece of information we have is that not all shares were sold. My guess would be that the money predominantly came from existing investors. Anyway, it is fun to speculate but we can't really know anything right now. I just wonder at people who are celebrating this like it is the birth of ESPORTS. Bubbles form because people have too much cash and not enough brains. If MLG is not able to produce profit, they will eventually go bust and those celebrating VC success will look really stupid.
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increase prize pool imo 1mill for the WINNING!!!!!!!
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I really hope MLG will success like GSL in Korea. With this lot of money, I am certain it will be.
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Travel costs is the biggest expense right now for teams and if they can keep providing that I look forward to see more players come to NA. Even if they do not win that particular tournament at least they are not going in debt to play for the fans. This is for all eSports, not just SC2. Look forward to it all growing more and more.
not anything entirely new in the conversation, but i think MLG's willingness to cover that travel expense is definitely worthwhile-- providing players fan exposure time which directly provides the players and the teams' sponsors with exposure time without incurring the cost of travel on the team, definitely excited to see the pro circuit and other 2012 arena turnouts
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On March 14 2012 03:40 idonthinksobro wrote:Show nested quote +On March 14 2012 03:31 ThatGuy89 wrote:
hmmm seems like PPV paid off?
glad to see Esports growing no this is a completly baseless assumption, lets assume PPV was horrible what would you do to make it look like success? Right release press news that you increase the funding but if you really look at these figures it doesn't mean anything really since they actually don't really know what they should do with all the money they made over the last year and deal could have been made way before the mlg. I'm still very sceptical if the PPV thing was a success they were at least break even for sure but every neutral poll showed that like 70%-80% of the people that would have watched didn't due to PPV. I don't really know if the sponsors did like this. This news timing seems like another strategical piece towards making people believe it was a great sucess, like the tweet right before MLG saying "PPV preorders exceeded our expactations".
I'm pretty sure someone did the math that all MLG needed was 2% of MLG's typical viewership to make up for that 80% of cheapskates. So basically, yes?
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this explained why they rushed out PPV ... they had to prove they could make money in time for the deadline for raising capital
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Has anyone mentioned the tip jar idea yet? When if you could tip a player (with his tips tracked live during a game), and MLG receives 20% of that tip. Just add this functionality over the current business model, and you have an added revenue stream. It taps on crowd behavior and the fervor of the moment, and by allowing services like Pay Pay to tip, you have a very low barrier of entry.
Each dollar tipped enters the tipper into a contest where the winner gets a day to go hang out with his favorite player after the next MLG event (From a list of agreeing players). Dinner and flight is covered by MLG.
Sound good, yes?
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Cool. Godspeed, MLG! Go ESPORTS!
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Where's my Canada MLG than? WHERE!? = P
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I'm curious how much of the success is due to Starcraft compared to other games. The article is focused on eSports in general, but maybe it should be a tad bit more Starcraft focused. I am saying this because people should know what is a bread winning formula instead of having the masses generalize the success of a brand of eSports that encompassing platforms that make it difficult to spectate. Any organization that might be interested in eSports should know why some games do so much better than others.
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As long as all the money goes towards SC2 and sending over as many Koreans as possible it's okay with me.
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On March 14 2012 09:12 ilikeredheads wrote:
Of that 11.3 million, I wonder how much is from event/PPV revenue..
None.
That money raised was purely "shares" of ownership in exchange for monies from private investors. Basically people are giving MLG money with the expectation that it will eventually become self-sustainable and profitable enough to pay them back and then some.
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On March 14 2012 11:02 supsun wrote:
As long as all the money goes towards SC2 and sending over as many Koreans as possible it's okay with me.
It's a business decision between MLG and their investors. I don't get why it would need anyone else's approval. They can do whatever they want with their money.
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On March 14 2012 11:20 kevinthemighty wrote:Show nested quote +On March 14 2012 11:02 supsun wrote:
As long as all the money goes towards SC2 and sending over as many Koreans as possible it's okay with me. It's a business decision between MLG and their investors. I don't get why it would need anyone else's approval.
It's an opinion. I don't get why it would need your approval.
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On March 14 2012 10:00 coverpunch wrote:Show nested quote +On March 14 2012 09:48 Probulous wrote:
I don't know about this. It seems like having to give up equity in exchange for cash based off of a new model that was only just implemented is a little risky. Yes it worked and congrats but it certainly doesn't speak to the stability of the industry. Yes, they managed to get more funding but VCs are not going to throw away an investment that doesn't look terrible. They have already invested a lot and the presence of remaining shares suggests that it was probably current investors who stumped up more cash.
It would be great news if the funding was for something specific, such as a torunament setup or a specific playing venue or something concrete. If it just for normal cash flow, that's worrying. We can't really know without looking at the financials and the only people with access to this are those that invested. So overall I guess we should be happy, I just have this nagging feeling that they are getting pressured to produce which suggests an underlying fragility. For sure MLG is being pressured to produce, but then again, they set up those expectations themselves of how quickly they think e-sports can grow and more importantly how much money it can generate. But the money isn't invested for anything concrete. That's why investors give money to managers. They're trusting MLG to set up tournaments and venues that are more attractive and bring in more people, and in turn they will look at the financials later on in the year and make that judgment for themselves. I don't think it's "good" or "bad" that MLG gave up stock in the company. It only matters how those board members use their power. If they focus MLG on profitability, then yes, some things will probably make you unhappy - things will cost more, players and consumers will get less, etc. But certainly you might prefer MLG to have a longer life than to go out in a blaze of generous glory where they give everything to the players and fans for nothing and then go bust.
You can be fairly certain that the money is for something concrete. VC's will require a detailed business plan for what MLG intends to do with the money. The scenario where the VC's are investing more just to not lose their prior investment is unlikely. As someone else said, VC's aren't in the business of throwing good money after bad. These are sophisticated investors that known when to cut bait. If they thought MLG was sucking wind, they would take that $11 million and invest it in a different business that appears to have more potential.
This investment is good news. It shows MLG has the revenue, business model, and future plans to convince sophisticated investors to invest significant money.
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Ok well if they made this much I hope that PPV rates are either vanished or reduced. I dont have a lot of money so I cant afford $20 dollars for every MLG, and it just hurts so much to miss your favourite players (& epic games) just because I have no money. But Im happy to read this, Esports and SCII keep growing even more everyday.
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On March 14 2012 11:23 Chargelot wrote:Show nested quote +On March 14 2012 11:20 kevinthemighty wrote:On March 14 2012 11:02 supsun wrote:
As long as all the money goes towards SC2 and sending over as many Koreans as possible it's okay with me. It's a business decision between MLG and their investors. I don't get why it would need anyone else's approval. It's an opinion. I don't get why it would need your approval.
? Never said it needed my approval. I made a statement in response to his comment, not ON his comment.
But thanks for trying.
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On March 14 2012 11:27 GeezerGeek wrote:Show nested quote +On March 14 2012 10:00 coverpunch wrote:On March 14 2012 09:48 Probulous wrote:
I don't know about this. It seems like having to give up equity in exchange for cash based off of a new model that was only just implemented is a little risky. Yes it worked and congrats but it certainly doesn't speak to the stability of the industry. Yes, they managed to get more funding but VCs are not going to throw away an investment that doesn't look terrible. They have already invested a lot and the presence of remaining shares suggests that it was probably current investors who stumped up more cash.
It would be great news if the funding was for something specific, such as a torunament setup or a specific playing venue or something concrete. If it just for normal cash flow, that's worrying. We can't really know without looking at the financials and the only people with access to this are those that invested. So overall I guess we should be happy, I just have this nagging feeling that they are getting pressured to produce which suggests an underlying fragility. For sure MLG is being pressured to produce, but then again, they set up those expectations themselves of how quickly they think e-sports can grow and more importantly how much money it can generate. But the money isn't invested for anything concrete. That's why investors give money to managers. They're trusting MLG to set up tournaments and venues that are more attractive and bring in more people, and in turn they will look at the financials later on in the year and make that judgment for themselves. I don't think it's "good" or "bad" that MLG gave up stock in the company. It only matters how those board members use their power. If they focus MLG on profitability, then yes, some things will probably make you unhappy - things will cost more, players and consumers will get less, etc. But certainly you might prefer MLG to have a longer life than to go out in a blaze of generous glory where they give everything to the players and fans for nothing and then go bust. You can be fairly certain that the money is for something concrete. VC's will require a detailed business plan for what MLG intends to do with the money. The scenario where the VC's are investing more just to not lose their prior investment is unlikely. As someone else said, VC's aren't in the business of throwing good money after bad. These are sophisticated investors that known when to cut bait. If they thought MLG was sucking wind, they would take that $11 million and invest it in a different business that appears to have more potential. This investment is good news. It shows MLG has the revenue, business model, and future plans to convince sophisticated investors to invest significant money.
You have a very high opinion of venture capitalists. It is pretty big to assume they know what they are doing. Especially if they have thrown money at a company that isn't producing. Yes they will pull the plug sometime but that time is often not optimal. The fact that they required MLG to produce something profitable before they would refinance suggests their patience if wearing thin.
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EPT
