MTG acquires majority stake in ESL for $86 Million

by theScore Staff Jul 1 2015
Thumbnail image courtesy of Dennis Gonzales / theScore eSports

Turtle Entertainment, operating as ESL, one of the longest-running organizations in esports, has sold a 74% stake in the company to Swedish-based entertainment outfit Modern Times Group for just over $86 Million in cash, both entities have announced.

ESL founders and management, including current CEO Ralf Reichert and Chairman Jens Hilgers, will retain the remaining 26% and continue their current positions at the company. Closing of the transaction is subject to local regulatory approvals.

The deal, which has been rumored and reported on by in late April and in May, has been in the works for a little over a year but only finalized in the last several weeks, Reichert told The Score eSports in a new interview. Reichert says the company received multiple offers to buy the whole company outright, including MTG, but that he and his team want to stay in the space that they've been involved with for the last decade and a half.

“When we founded ESL 15 years ago, our goal was to bring esports to fans all around the world and establish it as a global sport", Reichert said in a statement. "Today, esports enjoys worldwide recognition and now, together with MTG, it is time to take esports to the next level."

"We are excited to partner with MTG, who share our enthusiasm for the sport and bring an entrepreneurial commitment to help make this dream come true. MTG’s extensive operational network in over 100 countries and broadcast sports experience will help us bring ESL and esports to many more places around the world, while allowing us to continue expanding on strong, strategic local partnerships. The ESL leadership team could not be more excited about accelerating the development of the entire esports industry together with MTG for years to come.”

MTG, who runs multiple television channels across ten countries in Europe, is already present in the esports market with its platform that has hosted and broadcast tournaments across Hearthstone, Counter-Strike, and Dota 2. MTG says the investment in ESL is in line with the company's strategy to compliment its linear and on-demand video services. MTG offered up its history of building TV and online audiences for major international sports brands.

"Esports is fast becoming one of the most watched and passionately followed global sports categories amongst younger audiences", said MTG President and CEO Jørgen Madsen Lindemann in a statement. "At MTG, we love sports and we love sports fans. Our TV channels and platforms are home to the world’s leading sports brands, and are watched by typically young audiences. There are now almost as many gamers in the world as traditional sports fans, and esports was almost as big as ice hockey in 2014 in terms of number of enthusiasts. However, the average revenue generated per esports enthusiast in 2014 was just over $2, compared to $56 for traditional sports fans, so this global phenomenon has tremendous potential.

This investment is a key milestone in our digital development. We look forward to working with the talented Turtle team to grow the global esports community, and to make this exciting content even more broadly available online and on TV.”

Turtle boasts its current close relationship with major game publishers and developers, with the majority of the company's revenue coming from sponsorship and advertising of live events, online league operations, and broadcast rights. Turtle expects to grow its revenue by 50% in 2015 to upwards of $55 Million, reporting an EBITA profit for the year.

ESL's premier tournaments and leagues, such as the Intel Extreme Masters and ESL One, have reached over 70 million unique visitors in the last 12 months. ESL expects to reach a global audience of over 260 million unique online viewers in 2015.