MTG has simultaneously agreed and completed the acquisition of DreamHack, which is one of the world’s largest esports companies and organizer of the world’s largest digital festivals
MTG is acquiring 100% of DreamHack for an enterprise value of SEK 244 million (~28 million USD), from private investors and the company’s management. Management will continue to drive the development of the business. The company generated SEK 69 million of sales in 2014 and was profitable for the full year. It is expected to generate double digit sales growth in 2015. This investment follows MTG’s recent acquisition of 74% of ESL, the world’s largest esports company.
Hmmm... Don't want to jump the gun and say anything out of line... I'll just wait and see how the rest of this year and 2016 plays out. Hopefully, it means more tournaments for SCII, which will revive the scene more.
I've always been weary of companies that go around buying out everyone else, thus I'm not really happy. Hopefully my fears will be unfounded and good things will come of this.
On November 12 2015 17:23 feardragon wrote: Woah. All major Starcraft eSports LAN providers may be under the same umbrella? That kinda scares me. At least Redbull is still separate.
Gfinity is still seperate too. Though last I heard the were 3.4 million dollars in debt so don't count on that continuing
I can't really make my mind about it, is it good news?
Okay, a monopoly is definitely a bad things. But this could also mean a better cooperation between the different leagues (thinking of CS:GO notably), to get behind a unique schedule that'd leave room for everyone, and let players/teams compete the best way possible (not having huge back to back tournaments, potentially very far apart, etc.).
I can only really call it "scary". No reason to assume bad things, ESL hasn't exactly changed its operating procedure since it was taken over, so it isn't like when Twitch was almost bought by Google. While there aren't immediate negative implications, the reality that there is potential for a near-monopolized esports market in Europe is a frightening prospect.
Just read the short description about MTG, found out they are the largest shareholder in CTC Media, which is Russia’s leading independent media company. I am really surpised.
I don't understand the kinda "let's hope it's not a bad thing" comments. Of course it is a bad thing because we are getting closer to a monopoly. Have we ever seen anything good coming from a monopoly? I sure never have.
On November 12 2015 19:17 ne4aJIb wrote: Just read the short description about MTG, found out they are the largest shareholder in CTC Media, which is Russia’s leading independent media company. I am really surpised.
I'm not really comforted by the fact they meddle with Russian companies. Guess it depends what's the true meaning of "independant" in that description...
Modern Times Group (MTG) is a Swedish digital entertainment company. MTG was formed out of the media holdings of investment company Kinnevik, which in 1997 was distributed to the company stockholders. MTG operates free-TV channels in 10 countries, and also offers subscription entertainment services. MTG also offers a range of online catch-up, "Play" services. en.wikipedia.org
Corporate parent: Investment AB Kinnevik (Swedish pronunciation: [ɕɪnɛˈviːk]) is a Swedish investment company that was founded in 1936 by the Stenbeck, Klingspor and von Horn families. Kinnevik is an active and long-term owner and its investments are made primarily in technology-based services aimed at consumers. Kinnevik holds significant stakes in about 50 companies operating in more than 80 countries, with a particular focus on growth markets. The largest holdings are Millicom, Tele2, Zalando, Rocket Internet, MTG and Avito. Kinnevik’s largest shareholder is Verdere S.á.r.l., which is jointly owned by Cristina and Max Stenbeck. en.wikipedia.org
Principal shareholder: Cristina Mayville Stenbeck, born 27 September 1977 in New York, USA, is a Swedish American business woman. She is the executive chairman and principal owner of Investment AB Kinnevik, one of the largest family-controlled companies in Sweden en.wikipedia.org
What I don't get is why did they sell with such a stupid low valuation. Sold for 28 mil when the company made 69 mil in sales just for the last year and projections for double in this year.
On November 12 2015 20:06 Overtime wrote: What I don't get is why did they sell with such a stupid low valuation. Sold for 28 mil when the company made 69 mil in sales just for the last year and projections for double in this year.
I think for SC2, we probably don't need to worry yet. blizzard have shown that they are willing to intervene in league management when they feel they need to. so i think we will be one of the last games to get hit by something like this in a negative way
On November 12 2015 19:27 PPN wrote: I don't understand the kinda "let's hope it's not a bad thing" comments. Of course it is a bad thing because we are getting closer to a monopoly. Have we ever seen anything good coming from a monopoly? I sure never have.
On November 12 2015 19:27 PPN wrote: I don't understand the kinda "let's hope it's not a bad thing" comments. Of course it is a bad thing because we are getting closer to a monopoly. Have we ever seen anything good coming from a monopoly? I sure never have.
Google?
Most sports leagues are in fact monopoly, now, if they count as good is up to your interpretation.
Good for the DH folks I hope they got a nice payday. Guess time will tell what MTG has in store, but as long as Blizz keeps supporting esports i'm happy no matter what.
On November 12 2015 19:27 PPN wrote: I don't understand the kinda "let's hope it's not a bad thing" comments. Of course it is a bad thing because we are getting closer to a monopoly. Have we ever seen anything good coming from a monopoly? I sure never have.
Google?
Most sports leagues are in fact monopoly, now, if they count as good is up to your interpretation.
yeah as long as the product doesn't change I don't see the problem. Hoping this ends up being good for everyone!
On November 12 2015 20:06 Overtime wrote: What I don't get is why did they sell with such a stupid low valuation. Sold for 28 mil when the company made 69 mil in sales just for the last year and projections for double in this year.
Revenue =/= Profit
Addendum: Revenue = Sales = Turnover
Very true, but maybe more importantly the acquisition price is US$28,000,000 and the revenues number is SEK69,000,000 (about US$8 million) So actually it's a ~3.5x revenues valuation, which is very healthy and paints an entirely different picture of MTG expecting Dreamhack to continue to grow/perform well as opposed to being a fire sale
I think monopoly/consolidation in sports is good if it is a competently managed monopoly. As raz_gt already pointed out, all major sports leagues are run as monopolies. Who knows? If they care enough, between Dreamhack and IEM there could be a bigger non-WCS SC2 competition circuit, like an expanded version of the buildup to the IEM World Championship.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
Someone please correct me if I'm wrong, but that's nowhere near a monopoly, right?
MTG isn't selling any of the products, CSGO, SC2, etc, so in that sense no they are not a monopoly, they do not control the industry from the standpoint of buying the actual game, they have zero influence of the price structure. One could argue they are in a dominant position now in esport but dominance does not equate to a "monopoly". Now, if MTG decided that in order to watch DH every single user would have to pay $10 or something then you could absolutely make the argument that they are leveraging their power to influence the market directly, aka a monopoly.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
lol, it'd be like claiming the NBA had a monopoly on basketball while they still had to arrange event set-ups and rule changes with the Naismith family.
and DO NOT remove the context from my rebuttal. it was a 1 word reply in a SC2 forum whose previous post was about SC2. that is what i refuted. so don't turn it into something else. k thx.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
lol, it'd be like claiming the NBA had a monopoly on basketball while they still had to arrange event set-ups and rule changes with the Naismith family.
and DO NOT remove the context from my rebuttal. it was a 1 word reply in a SC2 forum whose previous post was about SC2. that is what i refuted. so don't turn it into something else. k thx.
Let's see how Premier tournaments we had this year : 21 tournaments, 8 are from Korea (3 GSL, 3 SSL and two KeSPA Cup.) Now let's see how many european/american Premier tournaments we had this year : 13 tournaments, 4 IEM, 1 HSC, 4 WCS, 3 DH and 1 MSI. WCS was produced this season by ESL, MSI MGA was produced by ESL. There is only HSC produced by an independant company this year.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
Someone please correct me if I'm wrong, but that's nowhere near a monopoly, right?
This is not strictly a monopoly if you consider that the fact nobody has the same weight as them on many games and can't go against them on an equal basis is only a subset of the economic term meaning.
On November 12 2015 18:08 Destructicon wrote: I've always been weary of companies that go around buying out everyone else, thus I'm not really happy. Hopefully my fears will be unfounded and good things will come of this.
Is there any other big CSGO organiser? I know fragbite and Gfinity are doing some tournament, but I don't think there is enough money in the scene to stop MTG to sign exclusivity with the best team and create their own league. I don't see SC2 and Dota changing a lot since the scene is more spread out across the world (mostly Korea and China)
Then again I could be totaly wrong I have no inside at all.
Also I feel like this show very well the gap betwen how many esport actors want us to see it and what is realy is. I mean I love Carmac but I have heard him or other said things like esports will be one of the biggest things in a few year, or esports is as big as tennis.
Yet the two biggest esport brodcaster in the west, and they are the biggest by quite a lot, have just been bought for 100 million (28 million for Dreamhack and 78 million for 74% of esl). Lets say that esl is worth 100 million on his own, that is still a very low amount of money in this kind of business. Just to give a scalle Roger bought nhl tv right in Canada for 5,4 billion dollars for only 12 years and MTG did not only bought the diffusion right they bought all the company.
I don't want to say that esport won't ever be as big as traditional sport but there is still a very long way to go.
On November 13 2015 04:06 tekrebel wrote: Stupid question
Does MTG mean Magic the Gathering?
Or is this a different company known for something else?
I grew up playing mtg so mtg will always mean magic the gathering to me lol. I will also accept mtg to mean meeting.
No, from their website. MTG (Modern Times Group MTG AB (publ.)) is an international entertainment group. Our operations span six continents and include TV channels and platforms, online services, content production businesses and radio stations.
We are also the largest shareholder in CTC Media, which is Russia’s leading independent media company. Our shares are listed on Nasdaq OMX Stockholm (‘MTGA’ and ‘MTGB’)
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
I wouldnt put Summit in there. But yeah, MLG is off-and-on, the last few years they have incredibly downsized how many events they put on a year, I think they're going to expand their circuit this year then that's something. Thats pretty much it for the big Western organizers.
On November 12 2015 17:30 Aeromi wrote: Monopoly. :>
nope, not with ATVI making their own esports division.
also, as a stand alone business SC2 esports is not profitable so in that subsection of the business there is nothing to exploit by having a monopoly.
DH, ESL and ESEA is way more than SC2.
and this acquisition does not make them a monopoly. not even close.
Of course it does. Cite any other league with a semblance of relevance worldwide that may weigh against all of these at once on SC2? On CounterStrike? On DotA2? (I do not know LoL enough, but I think Riot could).
On CS:GO, all the majors have been organised by these, plus most premier tournaments. You still have Gfinity, Faceit, CEVO, SLTV but they're not even close on their own. For CS:GO, this is a monopoly.
Other games I'd be a bit less assertive, but for SC2, apart from the korean leagues (which care about korea), who would you think of?
On DotA2, I remember a few like SLTV, The Summit, MLG, but I don't see anyone big enough as well... (that's the game I'm the least sure of though, esp. considering China).
It's not only about the number of tournaments/leagues, it's also about their weight, and these three combined definitely have an overwhelming presence on CS at least.
I wouldnt put Summit in there. But yeah, MLG is off-and-on, the last few years they have incredibly downsized how many events they put on a year, I think they're going to expand their circuit this year then that's something. Thats pretty much it for the big Western organizers.
The IPL and NASL's of the world couldn't maintain and ultimately failed. Hard to correlate MTG and past western failures and somehow say they are a monopoly though, in my opinion.
On November 12 2015 19:21 High[5] wrote: I've never heard of MTG, nor do I know what their name stands for (accept maybe Magic the Gathering?).
They are certainly gaining a large share of the esports market though.
It was TV at the start of TV; netflix before Netflix and basically one of the biggest entertainment broadcasting companies in the world. It's hard to be bigger than them in the entertainment industry.
I think both acquisitions from such a big company offers sustainability to the eSports scene in the 'west' and we shouldn't worry about it being 'monopolised'. We've already lost two companies due to insolvency / bad debt management in the likes of IPL and NASL. I had to google to see if MLG still exists lol.
I don't think any of us want to see ESL and Dreamhack go down the path of MLG and dissipate away or dry up completely like NASL or IPL.
My only fear that that they shaft SC2 (like MLG) and pour all their focus into League, Dota 2 and CSGO.
Time will tell though.
Also to those that are fearing a monopoly... This year, uh, we've only really had a Duopoly (in the likes of Korea) or an Oligopoly out in the West. Aeromi's post further up has a nice detail about this.
On November 13 2015 06:36 Larkin wrote: Huh, that seems unreasonably low for 100% of the company. $28m? I would have called at least $50m. Especially considering their profit margins.
Profit margins aside, I'd have thought DH as a brand would be worth a lot more. Well done MTG I say!
On November 13 2015 06:36 Larkin wrote: Huh, that seems unreasonably low for 100% of the company. $28m? I would have called at least $50m. Especially considering their profit margins.
Profit margins aside, I'd have thought DH as a brand would be worth a lot more. Well done MTG I say!
Dreamhack's business is expensive to run and full of future risks
Running these kind of events is expensive, requires a lot of staff, equipment and logistics. Additionally it depends on sponsors as the money that can be made out of customers isn't enough to pay for the staff, renting the place, big money prizes and shipping their stuff/staff across Europe to the locations. There is always the risk to lose them for any reason.
No one knows if these big scale LAN events will be still popular in 5 years or not and if customers are willing to pay for what it costs to host them. The more people are connected permanently via web, smartphones, pads, the less they feel the need to carry their computers around and connect them in a LAN. E-sport can take place anywhere else and doesn't need DH. Target group is only the very young adults that can stand the troubles of discomfort and stress that comes with attending such an event. You don't know how future generations of this target group are gonna behave. I don't see 30-40 aged sitting in a smelly and loud hall without any comfort in future just to play games when they can do it comfortably from their homes or in more pleasant small to medium sized environments.
I remember back in the days me and my friends were doing private LAN-Parties every 4-8 weeks and there were a lot of local medium size public LAN-parties as well. These times are gone. Safety and security is a big issue in terms of fire protection, stealing, ppl collapsing cause they play 48h nonstop, drug abuse, aggression, damaging. Neighbors complain about waste and noise. Hosts get trouble with police to keep minors out which can't be controlled to not play 18+ games or get drunk. Facility (doors, windows, electricity, heaters, etc.) and interior can easily get damaged by the hoards of ppl. That's expensive and takes staff to manage.
Imo former holders got good value out of their sales, especially cause DH probably barely holds anything of persistent value aside from the knowledge of how to run these events and their name.
On November 14 2015 00:33 LSN wrote: Imo former holders got good value out of their sales, especially cause DH probably barely holds anything of persistent value aside of the knowledge of how to run these events.
its amazing what fond memories of the past that are linked to a brand are worth
On November 14 2015 00:33 LSN wrote: Imo former holders got good value out of their sales, especially cause DH probably barely holds anything of persistent value aside of the knowledge of how to run these events.
its amazing what fond memories of the past that are linked to a brand are worth
Imagine if DH went broke today. What else than their name and well experienced staff would be left?
Idk for sure. Just my analysis about costs and risks. But I am sure there is reason why many approaches of competitors have failed. The whole business seems to me the same kind of mess as hosting big scale life music events. DH is doing reasonably well now but nothing can assure an investor that it stays that way in the upcoming 5-8 years and the high costs will prevent it from ever being highly profitable within the current field of operations. A few mismanaged events, losing sponsors, change of interest of upcoming generations or a highly funded and well managed competitor would be enough to turn things around a bit I believe.
Tho the chance is if DH manages to adapt to future trends that it will expand into new and more profitable fields with the already very big name.
p.s: I mainly wanted to point out why DH now probably hardly is worth more than what was paid for it with the above post. Didn't want to draw a dark future for DH. DH brand alone might be worth more on paper, but in this sense it must be discounted with the fact that it is very hard to generate reliable profits in its current business.
Calm the nerd nerves guys. Who knows what is going to happen? Nobody, that's who. Which makes this exciting. Unfortunately there is a lot of folks out there so quick to talk trash. Let's see where it goes and complain when something actually goes wrong.
DH is a pretty small company. 2014 they had 17 employees, they trust to the good will of volunteers to run their events and leagues at a profit. Same as most other E-sport companies. So another risk is that volunteers dry up, ramping up costs or cutting out entire segments.
On November 13 2015 06:36 Larkin wrote: Huh, that seems unreasonably low for 100% of the company. $28m? I would have called at least $50m. Especially considering their profit margins.
How do you know what DH's profit margins are? They probably aren't that high actually. ~3.5x rev. valuation is relatively normal, if not a little high. For the most part, except for explosive tech companies, 2-2.5x rev is the standard by which most companies are valued at.
EPT![[image loading]](http://www.mtg.com/wp-content/uploads/2015/11/DreamHack-Black-RGB-e1447255609136.png)
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