ESL and DreamHack parent Modern Times Group (MTG) reported its financial results for the first quarter of 2021, recording net sales of kr1.01B SEK ($120M USD), up 9.4% compared to kr924M ($110M) in the same quarter last year. The majority of the net sales were generated by the group’s gaming vertical, which recorded kr767M ($91.1M) in net sales or 75.9% of the group’s total net sales, while its esports vertical contribute the remaining kr244M ($29M).
MTG’s Group President and CEO Maria Redin states in her CEO letter: “The first quarter results were mixed, reflecting the continuing impact of the pandemic on our two verticals. While gaming performed well, exhibiting increased user engagement with our expanding portfolio of titles, esports continued to be impacted by the postponed return of live audience events. Short term visibility remains low, reflected in our adjusted tournament schedule. As a consequence, we are experiencing longer decision-making processes from brand partners, and in the quarter delayed signing of a small number of anticipated larger sponsorship contracts, which negatively impacted adjusted EBITDA. Most of these contracts have now been closed in Q2, 2021.” The sponsorship contracts Redin referred to include the strategic prolongation of its cooperation with its largest partner Intel and the extension of the sponsor agreement with SAP.
While MTG stated that it “does not expect live events to return in significant volumes before the end of the year,” it delivered and produced three non-audience Master properties during the first quarter of 2021, the Counter-Strike: Global Offensive tournament IEM Katowice and two Dota 2 events as part of the Dota Pro Circuit, the ESL One CIS and Dream League EU. Furthermore, ESL entered into a two-year partnership with Blizzard Entertainment to operate the Blizzard-owned esports ecosystem for Hearthstone.
MTG also reported that it made several investments towards its expansion of the ESL’s B2C and mobile esports products and digitalizing traditional sports into esports products through the recently announced partnerships with Virtual Bundesliga, the NHL and with the International Olympic Committee. MTG also invested in preparation for expansion into new geographies and markets. The costs associated with those investments negatively impacted MTG’s adjusted EBITDA for esports in the quarter by approximately kr25M ($3M). Additionally, MTG’s VC fund made a kr17M ($1.9M) investment into Berlin-based game developer Meta Games in an unannounced investment round.
In total, the company reported a net loss for the period of kr124M ($14.7M) compared to a net loss of kr96M ($11.4M) in the same period of last year.
Note: The Esports Observer used the exchange rate in effect as of Apr. 30 at a rate of kr0.118746 to $1.00 for currency conversions in this article.
