MTG pays €78m for ‘e-sports’ stake

Modern Times Group is to acquire a 74% majority stake in Cologne-based e-sports specialist Turtle Entertainment, which operates the ESL ‘e-sports’ brand.

MTG cited the dramatic growth in e-sports, which is expected to attract 260 million unique viewers by the end of this year, as the key motivation for the investment.

MTG’s majority stake in the outfit is being acquired from financial investors and the company’s founders for €78 million (US$86.8 million) in cash. The founders and management will retain the remaining 26% and remain in their current positions. The deal is subject to regulatory approval.

MTG will report approximately SEK 20 million (US$2.4 million) in costs relate to the deal in its second quarter results.

ESL’s diet of online games leagues and competitions including ESL One and Intel Extreme Masters has attracted over 70 million unique viewers over the last 12 months. The company has about 16,000 hours of live content that is made available via gaming network Twitch, YouTube and other platforms.

MTG said that Turtle expects to grow its revenues by 50% this year to approximately €50 million and report an EBIT profit.

“At MTG, we love sports and we love sports fans. Our TV channels and platforms are home to the world’s leading sports brands, and are watched by typically young audiences. Esports is fast becoming one of the most watched and passionately followed global sports categories amongst younger audiences,” said Jørgen Madsen Lindemann, president and CEO of MTG.

He added there were now “almost as many gamers in the world as traditional sports fans, and esports was almost as big as ice hockey in 2014 in terms of number of enthusiasts”.

“However, the average revenue generated per esports enthusiast in 2014 was just over US$2, compared to US$56 for traditional sports fans, so this global phenomenon has tremendous potential,” he said.

“This investment is a key milestone in our digital development. We look forward to working with the talented Turtle team to grow the global esports community, and to make this exciting content even more broadly available online and on TV.”