ESL and FACEIT bought for $1.5 billion by Saudi Arabia-backed group
ESL has been acquired for $1 billion, and FACEIT for $500 million, in deals that may well prove to be controversial. The acquisitions have been made by Savvy Gaming Group, an entity that's financially backed by Saudi Arabia's Public Investment Fund.
The details: While the acquisitions have been reported by German business publication Handelsblatt, and confirmed by the companies themselves, neither ESL parent company Modern Times Group or FACEIT have confirmed the value of the transactions.
- The ESL transaction is reported to be worth a total of $1B, and FACEIT for $500M.
- The buyer is backed by the Public Investment Fund, a sovereign fund from the Saudi Arabian government.
- ESL is a market leader in esports tournament operations, employing over 600 people and operating in most major titles. FACEIT is a major player in semi-pro and amateur competition with its online platform.
A new era: ESL has to be seen as one of esports' biggest success stories from data alone.
- The majority share of ESL (74%) was acquired by Modern Times Group, a Swedish broadcaster, in 2015 for €78M ($88.3M).
- MTG as a whole, including other properties such as gaming festival brand DreamHack, reported a net loss of $14.7M for the first quarter of 2021.
- The global health situation had an impact on ESL, as with all esports event operators, so selling for a large figure while the industry is still recovering may have seemed like a no-brainer for MTG.
The wider story: While MTG and FACEIT will be happy to receive $1.5B collectively for esports properties, it's not likely to go down well for the brands themselves.
- Esports doesn't have a positive association with Saudi Arabia due to concerns surrounding human rights.
- Both Riot Games and tournament organizer BLAST ended deals with NEOM, a state-sponsored Saudi city development, following fan and industry backlash in 2020.
- On a broader level, Premier League football club Newcastle United was heavily criticized following their takeover by Saudi Arabia's sovereign wealth fund in 2021.