Beyond the top, The Guard stalled as esports layoffs spread

Beyond the Summit (BTS), a premier esports production company and facility, has announced that it is laying off all of its staff. This comes shortly after traditional sports-backed esports organization, The Guard, announced it would do the same. These layoffs indicate that even prominent esports companies are feeling the chill of the esports winter.

Beyond the Summit was founded circa 2012 as a passion project driven by love for the esports community. Over 11 years, BTS has professionalized and grown into a premier tournament organizer and production company, particularly in the Dota 2 and Smash Bros. communities. More recently, the company branched out into supporting creator-driven events.

BTS is known for its unique style, often focusing on a casual or homely atmosphere rather than a more traditional stage setup. This made BTS a major player in esports. Despite its stature, BTS is the latest casualty of the esports winter as layoffs spread.

“Based on our current financial outlook and how challenging the year ahead looks, we have decided that it would be irresponsible to keep BTS operating in its current structure. So after nearly 11 years in business, we’ve made the extremely difficult decision to let all of our people go,” said David “LD” Gorman, co-founder of BTS, in a statement. rack.

Gorman confirmed that Beyond the Summit was now closing its doors so as not to leave its staff out in the cold. BTS will keep all full-time staff on payroll for the next 2 weeks and provide severance pay and health insurance for US employees through the end of April. BTS also published one list of the 27 affected employees to help them secure new positions.

While many esports companies have taken on VC funding, Beyond the Summit has not done so despite investor interest, according to Gorman’s statement. BTS valued being grassroots and independent with a focus on serving the community.

Beyond the Summit’s final event is the upcoming Smash Ultimate Summit 6, which will be held March 23-26.

Traditional sports back dries up

Last week, The guard suffered a similar fate to Beyond the Summit. The esports organization was founded in 2017 when Kroenke Sports and Entertainment bought a franchise spot in the Overwatch League. The Los Angeles Gladiators were joined by the Los Angeles Guerrillas in 2019 when KSE bought a spot in its sister Call of Duty League. In 2021, the team introduced The Guard branding 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, The Los Angeles Rams, The Denver Nuggets, the Colorado Avalanche and more. In the early stages of the Overwatch League, Kroenke’s support alongside non-endemic heavyweights like Robert Kraft (NE Patriots), Comcast Spectacor (Philadelphia Flyers), and Jeff Wilpon (NY Mets) added legitimacy to the league. It helped reinforce the OWL’s goal of mimicking the structure of traditional sports.

These initial investments of traditional sports took off like a snowball. Several sports organizations have looked to esports as a growth opportunity. Traditional sports leagues such as the NBA, NFL, MLB, NHL, MLS and many football clubs around the world have invested in esports leagues and tournaments of their own.

Unlike BTS, employees of The Guard were caught off guard by the news. Employees took to Twitter to express their dismay and disappointment. Former employee, Hunter Grooms, created a spreadsheet of the 29 affected employees. It is not clear what severance payments were offered.

Esports layoffs are having a chilling effect

Shutting down both 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, Saudi Arabia’s Public Investment Fund acquired ESL, its subsidiary DreamHack, and FACEIT. All three of these merged companies were major independent tournament operators. With the closure of BTS, there are even fewer – especially in the US – independent tournament operators.

Meanwhile, traditional sports companies have been the main source of investment and infrastructure for esports. Funding will be even harder to come by than it already is as interest from traditional sports companies wanes. Similarly, as companies tighten their belts for a recession, they look for opportunities to cut costs. If esports doesn’t show strong ROI for traditional sports teams and leagues, they may follow in KSE’s footsteps and shut down their esports programs.