Immortals Gaming Club restructures its Esports business in four verticals – Sportico.com

Immortals Gaming Club, the professional video game organization backed by Meg Whitman and AEG, is restructuring its business as it seeks a more efficient and financially viable esports business.

IGC separates its brands into four distinct business units: the group’s Overwatch League franchise (the Los Angeles Valiant), a matchmaking platform (Gamers Club), a Brazil-based pro team (MIBR) and Immortals (which includes its main League of Legends the franchise). Each individual unit has a positive cash flow, according to the company, which plans to enter 2022 with more revenue recorded than it earned in 2021.

Professional video gaming has struggled in the COVID-19 pandemic, which came just after a three-year span that saw massive investments in space and a rush to create franchise leagues with structures similar to the NFL or NBA. Today, some of the most important organizations in the industry are starting to rethink their long-term business strategy.

“We realized that it wasn’t going to be efficient for us to build this conglomerate portfolio that was meant to be everything for everyone and every publisher at all times,” said Ari Segal, who was elevated to Co-Director general of IGC under the changes. “And when you’ve decided you’re not going to be the Everything Store for esports teams, then you can sharpen your pencil on what makes sense. And that, along with the need for the business model, brought us to adopt this more brand-specific approach. ”

Whitman, a longtime tech executive who led eBay and Hewlett-Packard, led IGC’s recent $ 26 million fundraiser and is the group’s largest shareholder. Other investors include entertainment and theaters giant AEG, movie studio Lionsgate, the family of financier Michael Milken and Steve Kaplan, co-founder of Oaktree Capital and co-owner of the NBA Memphis Grizzlies.

The Los Angeles-based IGC wants to bring a more responsible and fiscally sustainable model to an industry that still sees a lot of money wasted, said Steve Cohen, IGC board member and director of strategy at AEG.

“So you’re not just burning money in the hopes of a big homerun or increasing the underlying value, you’re actually a business in and of itself, feeding on it- same, “Cohen said in an interview. “It allows you to look up and look at new opportunities as your risk profile goes down. You no longer make crazy bets.

IGC was previously set up in what Segal called a “matrix model,” where large areas of business like sales or marketing are managed by an executive who does so across each brand. IGC’s separation from these units, which includes installing frames at the top of each vertical, is driven by three main goals, Segal explained.

First, given the cultural specifics of individual esports titles and organizations, the matrix model meant that no high-level executive thought only of the Immortals or MIBR, who have different fan bases in different parts of the world. This reorganization installs a person in each unit who specifically thinks about the business, marketing and community opportunities specific to their brand.

Second, many large esports organizations are run by founders, who have broad powers over the entire organization. Creating leadership positions in each brand, Segal said, has given IGC a chance to recruit more talent at the executive level. Newly hired Jordan Sherman, who worked for Gen.G, Los Angeles Clippers and Major League Baseball, has been named CEO of Immortals; Roberta Coelho, co-creator of Game XP, has been hired as CEO of MIBR.

“We saw an arbitrage opportunity in the job market,” Segal said.

Third, pro esports are teeming with what Segal has called “channel conflict”. Some game publishers have restrictions on a single group controlling multiple teams. MIBR, for example, cannot compete in the best League of Legends Tour in Brazil because Immortals compete in the North American Tour. This change could allow the company to explore new opportunities that otherwise would not have been possible.

“Creating these business units which are individually liquid and can be individually capitalized allows us to be completely flexible,” he said. “And if the market opportunity warrants being truly and completely independent, we have now set up the entire holding company in order to have as many options as possible.”

This can also be true for selling. Over the past year, several reports have indicated that IGC is buying Valiant, its Overwatch League team. The group has already offloaded its Call of Duty League team and the OpTic Gaming brand it used, as well as the Houston-based Overwatch League franchise. Segal declined to comment on any potential sale or acquisition discussions.

Immortals is one of the most valuable esports organizations in the world, although the shutdown of live events by the COVID-19 pandemic and the tightening of advertising budgets have had a pretty drastic impact on the group’s operations. IGC’s valuation was cut by more than half last year from its figure of around $ 260 million in 2019, according to Forbes‘annual rankings. Income fell 23%, according to the magazine.

Segal declined to provide financial details, but said the company was open to mergers and acquisitions in both directions. He said IGC was happy with its recent releases and purchases, including the 2018 deals for MIBR and Gamers Club.

“We will relentlessly pursue maximizing value for all of our stakeholders,” said Segal. “Which means that everything we own is always for sale, and whatever is available in the market is always something we are looking to acquire. Anyone who tells you otherwise is not doing their shareholders right. “