Exclusive: Guild Esports Executive Chairman on 2021 ambitions and financial results

This morning (Friday, January 29th), British esports organisation Guild Esports (LSE: GILD) announced its results for the previous financial year.

The publicly listed company announced a loss before tax of £2.7m. The financial year in question, from 3rd September 2019 to 30th September 2020, reflects the pre-revenue stage when start-up and operating costs were high.

Guild Esports
Images provided by Guild Esports. Pictured: Carleton Curtis, Executive Chairman at Guild, who spoke to Esports Insider about Guild’s financial results, as well as the org’s long-term goals

Guild secured pre-IPO investments (the org’s IPO was in October 2020) totalling £5m, most notably including investment from footballing icon David Beckham — with a five-year commitment for him to act as Guild’s brand ambassador. It was reported by The Esports Observer in October that Guild agreed to pay Beckham $20m (~£14.52m) to use his name and likeness to promote the brand.

Net cash at the end of the aforementioned financial period was £1m.

RELATED: Guild Esports signs two-year deal with HyperX

Below are some post-period highlights (from October 2020 to 28th January 2021), when, among other things, Guild listed on the London Stock Exchange:

  • Became the first esports teams organisation to list on the LSE (though not the first teams org to go public)
  • Secured first sponsorship deal with European fintech firm worth £3.6m over three years. The anonymous firm will be announced in the coming months
  • Signed two-year sponsorship deal with HyperX yesterday (28th January)
  • Brought the total number of Guild Esports teams to four: FIFA, Rocket League, VALORANT, and Fortnite
  • ‘Fan base growing rapidly with video views of over 9.4 million and social impressions of 59 million at present’, according to official Guild financial results, which was largely fuelled by Beckham’s involvement
  • £18m in cash and near-cash as of 28th January

To delve deeper into these financial results, Esports Insider spoke with the organisation’s Executive Chairman, Carleton Curtis, to discuss what these figures represent, Guild’s long-term ambitions, and what makes it the organisation different to other esports brands.

Esports Insider: I don’t think many are worried that a company at [Guild’s] stage is losing money, but generally speaking, many esports orgs — including global brands that have been around for a decade or more — are not making a profit. Is the current lack of profitability in esports something that worries you?

Carleton Curtis: It doesn’t, because we have a different approach and a different model to most companies. One of the key things I want to stress is that we’re not interested in repeating past mistakes that orgs have made, and in some cases are still making. At the highest level, no, it’s not a concern of mine.

We believe in the promise of esports in a big way; we’re looking at the growth of audiences, playership, the market projections … To enjoy all that, you have to be a top organisation, you can’t be a boutique org. We have ambitious goals that’ll probably raise a few eyebrows. But we don’t see how you can be profitable unless you take big swings.

Our ambition is to be a tier-one org in the next two or three years. We’re extremely confident in our long-term plan. In esports, the whole of the last decade has been fertile ground for the future, but there’s still a lot of learning that has to take place — even for the biggest orgs.

ESI: You worked at Activision Blizzard [the publisher of Overwatch and Call of Duty]. What do you think of the franchising model in leagues like the Call of Duty League (CDL) and Overwatch League (OWL)? And will Guild enter into franchised leagues any time soon? 

CC: I think it’s still too early to conclude whether that’s the future of esports. I think the answer is probably somewhere in between; I lived in the Activision Blizzard world for four years, I was part of the founding team that launched the OWL and the CDL. Every publisher takes a different approach, for better or for worse. Fortnite has taken knocks from esports fans, but I think it’s pretty hard to deny that it has the Midas touch. We’re getting good signals from Fortnite esports, for example; prize pools, the structure of FNCS, and so on.

As far as franchising, if you look at what the LEC has done, the CDL and OWL too, they’re building a sustainable frame. But in the OWL and CDL, early entrance fees were, let’s say, less than sustainable. There’s definitely optimism around Overwatch 2, which is building hype back up for the franchise over there, and if you look at CoD, the game hasn’t been more on fire in history than in the last two years. Aside from Warzone, its sleeper hit is its mobile game. That’s the quietest winner.

We also have goals of entering the LEC at some point; we would love to be a part of that. But yeah, it isn’t a simple answer to this question. Both open and closed sources can work.

ESI: Mobile esports is of course a burgeoning area of esports, particularly in Asian countries. First, are there any other mobile titles besides CoD that excite you? And would Guild be willing to expand its operations into places like India and Indonesia, picking up teams in those regions?

CC: Mobile titles are 800lb gorillas; you consider what King is doing — the company that makes Candy Crush — they reach audiences by an order of magnitude more than Activision Blizzard. Now granted, that’s not esports because there’s nothing competitive about them, at least not in a strict esports sense. But mobile has so much potential.

Outside of just fantasy esports and betting, mobile is in the category of the future of esports. Mobile CoD is doing amazing, Wild Rift is something that is really compelling to us too. We’re certainly open to acquiring teams in these esports.

ESI: I noticed that Guild’s first sponsor wasn’t revealed in November 2020 as planned. I was curious why the reveal has been delayed?

CC: It’s a pretty simple answer. The deal we announced with a European fintech company was historical for esports in terms of cash value, let alone for a startup. The main issue is COVID. Obviously, esports in many cases withstood and even benefited from the impact. But in this regard, our partner wants to launch their brand in a big way with Guild, with on-site activations that involve physical proximity; we just can’t do that right now.

Everyone involved with the partnership wants to announce it, it’s just been a challenge. It’ll be a holistic programme, including sponsorship of Guild jerseys and other things.

ESI: Could you give more details about the academy system modelled after the Premier League, and touch on whether this has revenue-generating potential for Guild?

Beckham-backed Guild Esports is passionate about its esports academy — something that also resonates with Beckham himself. Image credit: TNS/SIPA USA/PA Images

CC: David Beckham saw alignment with esports and with our brand for many reasons, and the academy product was high on the list of his reasons. We expect to use his experience and expertise and resources to co-develop an esports version of that football academy system; Beckham is one of the authorities on the topic, he was the darling of the English academy system with Manchester United and Tottenham Hotspur.

There’s the ability to have physical locations. But what’s more exciting about our vision for the academy is we see true scale and accessibility through the digital portal. All you need is high-speed internet and a PC or console to log in and apply. This is starting to be crucial as a differentiator between us and other orgs’ academies; we’re a first mover when it comes to digital.

The problem with academies in esports is that there hasn’t been commitment from all orgs. There’s a lot of talk about path to pro but most don’t commit; I would imagine that piece of the business is hard to sell. But we’re trying to look at it differently. If they had taken more of a digital approach to academies, they might have different results. It can be accessible to anyone in the world.

ESI: How will the ‘interactive tournament platform’ of the academy work, and will you be working with a third party to facilitate this?

CC: We can’t share too much on that right now. We’re aiming to launch it early this year. We believe we have a product that is market ready. We want to get through a few rounds of audience testing, check that’s it’s good for customers.

I think at a high level, you’re going to see things you expect to see with a digital academy — we’re going to have an academy in most games, whether we compete in them or not, including coaching and development sources. David Beckham’s experience will be crucial here; he has lived this.

[primis_video widget=”5183″]

ESI: Looking ahead to 2021, what is priority number one for Guild Esports?

CC: That’s a difficult question to answer as Executive Chairman! Look, if we distil our business down to what fans can see, our main KPI is to win championships and create a winning culture. There was a lot of snark around Guild at first, but now we’re walking the walk. Our video programming is also taking esports content to a whole new level.

RELATED: Guild Esports completes £41.2M listing on London Stock Exchange

If you think of franchised MLS teams, they’re usually not the top team as soon as they enter the league. For us, we have the top Fortnite team in Europe. Our Rocket League team is consistently top five in Europe. We have the third-ranked FIFA player in the world. We have a dangerous VALORANT team that we expect to be top five in the world.

At a core level, it’s really about winning. Winning fuels everything. But drilling a bit deeper into business KPIs, we’re really a digital marketing and media company. Our business is the audience business. We’re super excited for this year and beyond.

Read The Esports Journal