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Beyond the Summit (BTS), a top-tier esports production company and facility, announced that it would lay off its entire staff. This comes shortly after the traditional esports-backed esports organization The Guard announced it would do the same. These layoffs indicate that even the major esports companies are feeling the chill of the esports winter.
Beyond the Summit was founded around 2012 as a passion project fueled by a love for the esports community. Over the course of 11 years, BTS professionalized and became one of the leading tournament producers and organizers, particularly in the Dota 2 and Smash Bros. communities. More recently, the company branched out to support creator-driven events. .
BTS is known for their unique style, which often focuses on a casual or homey feel rather than a more traditional stage setup. Through this, BTS became a key player in esports. Despite their status, BTS is the latest victim of the esports winter as layoffs spread.
“Based on our current financial outlook and how challenging the coming year looks, we have decided that it would be irresponsible to keep BTS in its current structure. So, after nearly 11 years in business, we have made the extremely difficult decision to let all of our people go,” David “LD” Gorman, co-founder of BTS, said in a statement.
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Gorman claimed that Beyond the Summit closed its doors now so as not to leave its staff out in the open. BTS will keep all full-time staff on payroll for the next 2 weeks and will offer severance packages and healthcare coverage for US employees until the end of April. BTS has also released a list of the 27 affected employees to help them secure new positions.
While many esports companies have received venture capital funding, Beyond the Summit failed to do so despite investor interest according to Gorman’s statement. BTS valued being grassroots and independent with a focus on serving the community.
The last Beyond the Summit event will be the upcoming Smash Ultimate Summit 6, which will take place from March 23-26.
Traditional sports backrest drying
Last week, The Guard suffered a similar fate to Beyond the Summit. The esports organization was founded in 2017 when Kroenke Sports and Entertainment purchased a franchise slot in the Overwatch League. The Los Angeles Gladiators joined the Los Angeles Guerrillas in 2019 when KSE purchased a spot in sister league Call of Duty. In 2021, the team introduced The Guard brand to create a unified brand for its esports efforts, including Valorant, Halo, and Apex Legends.
Kroenke Sports and Entertainment is owned by Stan Kroenke. His sports empire includes Arsenal FC, Los Angeles Rams, The Denver Nuggets, Colorado Avalanche and more. In the early stages of the Overwatch League, Kroenke’s support along with non-endemic heavyweights such as Robert Kraft (NE Patriots), Comcast Spectacor (Philadelphia Flyers), and Jeff Wilpon (NY Mets) added legitimacy to the league. He helped OWL reinforce the goal of mimicking the structure of traditional sports.
These initial investments from traditional sports snowballed. Several sports organizations have turned to esports as a growth opportunity. Traditional sports leagues like the NBA, NFL, MLB, NHL, MLS, and many soccer clubs around the world have invested in their own esports leagues and tournaments.
Unlike BTS, The Guard employees were shocked by the news. Employees took to Twitter to express their surprise and disappointment. The former employee, Hunter Grooms, created a spreadsheet of the 29 affected employees. It is unclear what severance packages were offered.
Chilling Effect of Esports Layoffs
Both the closure of BTS and The Guard could have a chilling effect on the market.
Beyond the Summit was one of the largest esports tournament organizers not affiliated with a publisher. Last year, the Saudi Arabian Public Investment Fund acquired ESL, its DreamHack subsidiary, and FACEIT. The three merged companies were large independent tournament operators. With BTS shutting down, there are even fewer, particularly in the US, of independent tournament operators.
Meanwhile, traditional sports companies have been a key source of investment and infrastructure for esports. Funding will be even harder to come by than it already is if interest from traditional sports companies wanes. Similarly, as companies tighten their belts in the face of a downturn, they look for opportunities to cut costs. If esports doesn’t show a strong ROI for traditional sports teams and leagues, they may follow in KSE’s footsteps and kill off their esports programs.
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