NASL were over $1.6 million in debt

On May 23 2014 06:08 myxoma_strain wrote:
the letter implies that not all prize money was paid out. Do we know if anyone hasn't been paid? Also, I was under the assumption it was blizzard that provided the prize money. Would that complicate the payout process?

On May 23 2014 06:10 myxoma_strain wrote:
Also, a plain text copy would be appreciated for reference

On May 23 2014 06:10 Xiphos wrote:


The cynic in me thinks that NASL might have spent those money in their production rather than paying out the players to keep their sponsors on the hook.

If that were the case, then that's a whole another can of worms.



Come on now, show Richard Lewis some love

On May 23 2014 06:14 myxoma_strain wrote:
It has come to the Assignee’s attention that there are potential consumer claims for unpaid prize obligations which may qualify for priority claim status.

page 2, in the middle of the big paragraph

On May 23 2014 06:47 nkr wrote:
it's all in that big truck!


Also it's easy for everyone to be all hindsighthero, but the fact is when nasl was announced in the end of 2010 or early 2011, an investment like this didn't make people go "what are they doing?". People thought sc2 was the next big thing, but it ended up being LoL and Dota2 instead. Shit happens.

On May 23 2014 07:31 nkr wrote:


I think "a lot of people" is stretching it

On May 23 2014 08:43 Dodgin wrote:
Time to unban that guy that said NASL wasn't going to pay out NASL S4 prizemoney like 18 months ago

On May 23 2014 08:48 JimmyJRaynor wrote:


who me?

i only noted that they promised $400,000 over 3 seasons at the very start..
and then they delivered $300,000 over 3 season.

$300,000 over 3 seasons is still good, but they did promise more.

On May 23 2014 08:55 Dodgin wrote:


yes

they should give you a forum star

On May 23 2014 09:21 Derez wrote:
NASL could have been great but they fucked it up themselves. They had all the potential but took too long to deliver.

On May 23 2014 06:47 nkr wrote:
it's all in that big truck!


Also it's easy for everyone to be all hindsighthero, but the fact is when nasl was announced in the end of 2010 or early 2011, an investment like this didn't make people go "what are they doing?". People thought sc2 was the next big thing, but it ended up being LoL and Dota2 instead. Shit happens.

On May 23 2014 07:59 entropius wrote:
I imagine they could sell that soundboard and make back half a buck ;-)

On May 23 2014 11:40 lolmlg wrote:

I'm going to be real with you. Are you ready?

Nobody with any intelligence thought that.

SC2 was a disaster waiting to happen. Blizzard mishandled every aspect of their attempts to strong-arm the professional scene. They alienated the Brood War fanbase and meddled so thoroughly in the dynamics of Korean e-sports that they basically guaranteed that there couldn't be the kind of independent grassroots support that gave Brood War longevity. On top of this they simply designed an inferior game that inspired far more apologetics than devotion.

In the end, the only source of strength for SC2 was Blizzard and everyone recognized it. It was what Blizzard wanted all along and they paid for it. While Brood War enjoyed the support of large sponsors, SC2 would collapse as soon as Blizzard lost interest. The volatility of the scene undermined it on a continual basis.

Edit: And while it's obvious that DotA2 is enjoying success at the moment, a statement like "the next big thing was LoL and DotA2" is just a mix of wishful thinking and hubris.

On May 23 2014 13:38 [SXG]Phantom wrote:


And do you think LoL would be this big without Riot pushing the game? You think LoL would be this big thanks to the community?

On May 23 2014 13:45 Xiphos wrote:


Not exactly.

Kespa BW was under heavily scrutiny from matchfixing and being labeled as "illegal tournaments" from Blizzard.

But company still wants to take advantage from the rise of professional gaming in Korea. BW is no good for PR, barely anybody plays SC2 in Korea, and this new game called LoL is slowly gaining momentum with tons of potential. Logically, the companies shifted to LoL sponsorship. Riot game saw that opportunities and decide to bring LCS into the table to push the game even further. LoL had a sense of "grassroot movement" at its inception.

So its a combination of both.

On May 23 2014 14:03 Rho_ wrote:


You are full of it. There was no grassroots anything with LoL tourneys. There were basically no tournaments for a long time, and what was there was really, really poorly run. Then Riot got bought out for like $500 mil and threw money at the problem till it was fixed. What they did correctly was market the shit out of LCS in game, which blizz didn't do for SC2 for a long, long time.

On May 23 2014 14:30 miicah wrote:


A splash screen that came up during week one and the finals?

On May 24 2014 00:55 fireforce7 wrote:
when things get real and business comes first...:x. I wonder how it got up to 1 million before they realized something was up?

On May 23 2014 22:21 RHoudini wrote:

You're very harsh - the difference between success and failure often boils down to luck.
NASL should be applauded for trying to achieve something. They failed, but that's part of life.

On May 23 2014 14:03 Rho_ wrote:


You are full of it. There was no grassroots anything with LoL tourneys. There were basically no tournaments for a long time, and what was there was really, really poorly run. Then Riot got bought out for like $500 mil and threw money at the problem till it was fixed. What they did correctly was market the shit out of LCS in game, which blizz didn't do for SC2 for a long, long time.

On May 24 2014 01:15 marigoldran wrote:
NASL never had the revenue stream it needed. It was using money, but it wasn't making it.

Once you think of it that way 1.6 million is normal.

On May 23 2014 08:55 Dodgin wrote:


yes

they should give you a forum star

On May 24 2014 01:59 Shikyo wrote:

Normal and normal. I think it's irresponsible. 5000 dollar prize pool, 100000 dollar prize pool. Is there a huge difference in the amount of viewers you get? Perhaps, but with good commentary and such it still would attract plenty. You also don't need super production and all sorts of fancy stuffs, it just needs to be watchable. HSC is a good example, I would say.

Personally I also am a fan of tournaments with entry fees but I guess that would hurt the participant count quite a bit because it's not common practice.

On May 24 2014 08:55 marigoldran wrote:


They overestimated the amount of viewers that would tune in. Starcraft 2 viewership numbers in the thousands. They were hoping for in the millions.

Sad, but you could see the casters were under pressure to bring results. They did a good job, and it was very professional, but for some reason it never caught on.

On May 24 2014 08:47 JudicatorHammurabi wrote:
The debt is one thing. The bigger issue is if someone among the investors decides to go after NASL and press criminal charges for this debt that isn't repaid. NASL obviously doesn't exist anymore, but the people still do, and they can be hunted down in terms of legal engagements. :X

On May 24 2014 08:47 JudicatorHammurabi wrote:
The debt is one thing. The bigger issue is if someone among the investors decides to go after NASL and press criminal charges for this debt that isn't repaid. NASL obviously doesn't exist anymore, but the people still do, and they can be hunted down in terms of legal engagements. :X

On May 24 2014 09:03 Wuster wrote:


Why would there be criminal liability with a bankruptcy? For starters the liability is held by the company, not the operators or founders, that's the point of incorporation*.

Second, it's not a crime to be bad at business. If there's a criminal complaint it would have to be something like NASL cooked the books to get people to invest, or that they were embezzling money, which doesn't seem likely considering they were still paying prize money to the end.

* There's still a link of course, otherwise the NASL folks could just walk away and not bother with the bankruptcy proceedings, which they're going to do. But there's very little you can do about the actual people behind the company.

On May 24 2014 09:38 Shikyo wrote:

That's how it works in USA? Over here the people and the company are completely seperate. If the company goes bankrupt it goes bankrupt but the people only lose what they initially invested in the company. However, I have no idea how it's even possible to loan 1.6 million just like that... You'd need to like, pledge your house or something I'd imagine.

On May 24 2014 10:13 JudicatorHammurabi wrote:

Okay. I was under the impression that NASL wasn't an incorporated organization, which makes things an entirely different matter. Thanks for clarifying.



It doesn't work that way in the US if it's an incorporated/limited liability organization/scheme. See Wuster's post. Apparently, NASL was an incorporated business, so it doesn't apply. For some reason, I've been under the impression since 2011 that some guys started the star league without going through incorporation, liability protection, etc. Since the latter is apparently what happened, investors just have to suck up their losses in this situation, which pretty much sucks for them.

"However, I have no idea how it's even possible to loan 1.6 million just like that..."
Yeah, but there's some pretty stupid investors/loaners out there. I remember back when NASL was started I was wondering how in the heck anyone was giving them money for this or how NASL was making money. Obviously, my suspicions turned out to be more true than not, as this huge debt shows.

On May 24 2014 09:38 Shikyo wrote:

That's how it works in USA? Over here the people and the company are completely seperate. If the company goes bankrupt it goes bankrupt but the people only lose what they initially invested in the company. However, I have no idea how it's even possible to loan 1.6 million just like that... You'd need to like, pledge your house or something I'd imagine.

On May 24 2014 10:13 JudicatorHammurabi wrote:

Okay. I was under the impression that NASL wasn't an incorporated organization, which makes things an entirely different matter. Thanks for clarifying.



It doesn't work that way in the US if it's an incorporated/limited liability organization/scheme. See Wuster's post. Apparently, NASL was an incorporated business, so it doesn't apply. For some reason, I've been under the impression since 2011 that some guys started the star league without going through incorporation, liability protection, etc. Since the latter is apparently what happened, investors just have to suck up their losses in this situation, which pretty much sucks for them.

"However, I have no idea how it's even possible to loan 1.6 million just like that..."
Yeah, but there's some pretty stupid investors/loaners out there. I remember back when NASL was started I was wondering how in the heck anyone was giving them money for this or how NASL was making money. Obviously, my suspicions turned out to be more true than not, as this huge debt shows.

On May 24 2014 14:35 FabledIntegral wrote:
Even if they didn't incorporate, they wouldn't be faced with criminal charges...?

On May 24 2014 23:39 Axxis wrote:
I knew something had to be serious wrong. Most of the guys at this studio were very passionate about starcraft and it seemed to be pretty sudden. I was a fan of NASL through it all. I think they got the cart before the horse somewhat, trying to give us a good stream. It's hard to keep spending many times what you're earning. I hope someone steps up and takes over the NA scene and the NA wcs that has the capital to back it.

On May 24 2014 23:39 Axxis wrote:
I knew something had to be serious wrong. Most of the guys at this studio were very passionate about starcraft and it seemed to be pretty sudden. I was a fan of NASL through it all. I think they got the cart before the horse somewhat, trying to give us a good stream. It's hard to keep spending many times what you're earning. I hope someone steps up and takes over the NA scene and the NA wcs that has the capital to back it.

On May 23 2014 14:03 Rho_ wrote:


You are full of it. There was no grassroots anything with LoL tourneys. There were basically no tournaments for a long time, and what was there was really, really poorly run. Then Riot got bought out for like $500 mil and threw money at the problem till it was fixed. What they did correctly was market the shit out of LCS in game, which blizz didn't do for SC2 for a long, long time.

On May 25 2014 06:11 Baarn wrote:
I'm not really surprised if this is the reason or part of the reason they disappeared. I keep thinking the other part of it is that they had competition so they couldn't get good enough broadcast contracts with Blizzard to keep things going. i think another reason is they didn't really ever have any real backing in the first place outside of maybe an angel investor or two. But the money wasn't there to keep things going when times were bad.

I still think CGS proved that esports just isn't ready for huge prize pools yet versus the viewership you get when you want to sell ad space. You have to really rethink things when they were broadcasting to everywhere but antartica. I say going to channel 101 is much easier than having to download mobile app (hi gomtv) or watching low bitrate twitch streams. It's tough out there.

On May 25 2014 23:36 uishax wrote:

Dota 2 can run massive 700+million prizepools and still be quite profitable, its ultimately down to the very low player base that made tournaments unsustainable.

On May 26 2014 09:17 Baarn wrote:


Sure with crowdfunding the prize pools go through the roof. TI4 is roughly around 6 million us dollars after 10 days of compendium sales. It takes a huge chunk of weight off of the main sponsors. The entire system is quite ingenious but how long will it last?

We can take a look at american football and it's massive playerbase.It's estimated that around 60% of americans have or had played the game and the viewership is just as high. That's why the league gets well over a billion dollars in tv rights each season from the networks. When it comes to video games you just don't have a strong enough conversion to turn more of those 27 million active daily or the 67 million monthly league of legends players into a viewer. Seems like most players rather just play the game then watch some streamed event. Then you have the viewer that really doesn't play the game at all. I tune into broodwar tournaments here and there. I don't actively play the game at all. So no I don't believe it is solely based on low playerbase that makes tournaments unsustainable.

On May 23 2014 11:40 lolmlg wrote:

I'm going to be real with you. Are you ready?

Nobody with any intelligence thought that.

SC2 was a disaster waiting to happen. Blizzard mishandled every aspect of their attempts to strong-arm the professional scene. They alienated the Brood War fanbase and meddled so thoroughly in the dynamics of Korean e-sports that they basically guaranteed that there couldn't be the kind of independent grassroots support that gave Brood War longevity. On top of this they simply designed an inferior game that inspired far more apologetics than devotion.

In the end, the only source of strength for SC2 was Blizzard and everyone recognized it. It was what Blizzard wanted all along and they paid for it. While Brood War enjoyed the support of large sponsors, SC2 would collapse as soon as Blizzard lost interest. The volatility of the scene undermined it on a continual basis.

Edit: And while it's obvious that DotA2 is enjoying success at the moment, a statement like "the next big thing was LoL and DotA2" is just a mix of wishful thinking and hubris.

On May 26 2014 12:54 sharky246 wrote:


nobody except most of the people in this community. Back then, sc2 was synonymous with the term esports. People would say something along the lines of "hurting esports" when something negative happened in the sc2 scene.

On May 26 2014 13:08 DuduSC wrote:


I must agree with lolmlg. Maybe you are listening too much to casters or mainstream media (like "most of the people") but since before the launching SC2 was considered to be a disaster, just like now it's still considered an esport failure compared to SC1.

On May 26 2014 12:54 sharky246 wrote:


nobody except most of the people in this community. Back then, sc2 was synonymous with the term esports. People would say something along the lines of "hurting esports" when something negative happened in the sc2 scene.

On May 26 2014 13:53 BlindKill wrote:
NASL's revenue is a derivative of the popularity of the game which is Blizzard's responsibility, so they dont really have control over their business model. But being in $1.6m in debt for giving out 300-400k prize pool in total means they fucked up the budgeting really bad.... I think it's all spent on salary as well so creditors can't recoup it.

On May 25 2014 13:39 Zato-1 wrote:

Actually, it's not even that; Riot just keeps throwing money at it, and "the problem" isn't fixed- with the problem being unprofitability of esports. Even with how insanely huge LoL is atm, its esports scene is still a lossmaking operation for Riot. Riot's fine with this because they see the net loss they make on esports as an acceptable marketing expense for their game. Naturally, that kind of business model wouldn't work for NASL.

On May 26 2014 13:53 BlindKill wrote:
NASL's revenue is a derivative of the popularity of the game which is Blizzard's responsibility, so they dont really have control over their business model. But being in $1.6m in debt for giving out 300-400k prize pool in total means they fucked up the budgeting really bad.... I think it's all spent on salary as well so creditors can't recoup it.

On May 25 2014 11:43 geokilla wrote:

Gretorp was streaming the other day and I asked him a couple questions about SC2 and NASL.

Basically, Gretorp was more than a caster as they often worked overtime with no pay, doing editing, PowerPoint, and all this other background stuff that they didn't sign up for. They worked 7 days a week and worked so much that it sounds like they were burnt out. He often went to work, dreading work and working at NASL. The place was run poorly if I remember what he said correctly.

On May 26 2014 13:42 Xiphos wrote:
"Esport" was a term created by Tastosis, Day[9], HuskyStarCraft in order to have the community rally together against one single purpose which worked out great back then. It served as propaganda. But this also created a sense of hostility toward people who attempt to criticize SC2, which then was synonymous with "killing/hurting esport" and how much of a demon you are for doing it.

On May 26 2014 14:14 chaos021 wrote:


I miss that guy. Great caster and a pretty damn good player in his own right. If he still wants it, someone needs to give that guy a job casting somewhere. Anywhere.

On May 26 2014 09:30 WolfintheSheep wrote:
Articles like this are always a pain in the ass to syphon through. Basically all start-up companies have massive debt to begin with - even if you're backed by a billionaire, you still rely a lot on investors, loans, etc. to handle start-up costs. If you just front all the money to begin with, then it's just gone.

That's why most businesses care about being profitable in their day-to-day dealings. It isn't until you've had several years straight of profitability that you're out of the red.

So while $1.6mil in debt sounds big and scary...it's not so scary if they started $1.2mil in the hole, or something.

On May 26 2014 12:54 sharky246 wrote:


nobody except most of the people in this community. Back then, sc2 was synonymous with the term esports. People would say something along the lines of "hurting esports" when something negative happened in the sc2 scene.

On May 26 2014 10:49 uishax wrote:

What an ludicrous comparison, football as a sport has already established a massive chain of industries surrounding it. It is broadcasted on TV, athletes are celebrities, magazines, merchandise, news reports all serve as advertisements for the sport.
What does LoL and Dota have? No ads, nothing mentioned anywhere except esports websites and a passing mention in the game client itself.
This is the reason for the difference in engagement.

More importantly, you are clueless about why Valve and Riot are so enthusiastic about esports.
Esports in itself is an advertisement for the game. Research shows esports watchers spend more and are more loyal to the game, so the game publisher directly benefits from increased player numbers and engagement, that indirect revenue is far higher than any advertising revenue that one person could possibly bring.
Hence, the requirement for 'conversion' is significantly lower for 'micro-transaction games' esports than traditional sports. Its too bad Blizzard never found a way to monetize starcraft 2 to support this esports model.

Lastly, you have no clue how big MOBAs are do you? The money contributed isn't 6 million, its 24 million, only 25% of that money went to that prize pool. There isn't even a need for a 'main sponsor' or any form of advertisement to support it. And as long as the playerbase increases, the scale of tournaments only go up, no issue of sustainability here.
Wait till you see Tencent copy this strategy, LoL can easily go over this amount several times and exceed most sports in terms of prize money.

SC2's failure is due to insufficient player-base and an erroneous way of monetization that led to lack of publisher support. Look at heartstone, Blizzard is pumping money into the esports scene, because it knows how indirectly profitable that investment is.

On May 27 2014 22:27 cheekymonkey wrote:
What are the consequences of this debt though? What responsibility does the previous owners have now?