Guild no franchising

#1

VirajKnight

https://twitter.com/Esports_News_UK/status/1542430836791955457

They will never make it.

#2

KoreanOverlord

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if guild are operating at a loss how red do u think companies like bleed are

#3

VirajKnight

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Bleed have investors to backup right? They heavily invest in Valorant.

#4

KoreanOverlord

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where do u think guild has the money to operate? from angels?

#6

SilentNight

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XDDD

#7

burritx

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They don't pay taxes

#9

VirajKnight

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But Bleed doesn't lose financially this much right? Or do they?

#10

KoreanOverlord

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they 100% do, and its prolly worse

most esports orgs operate at a loss, this is a known fact

#5

hekzy

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Yeah but if theyy are not making a return of investment, then they are bleeding investors' money

#8

doosean

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I don't think this would be a crucial factor, as Guild Esports is still a start-up, like it is stated in the article. They have yet to work out some sponsorship deals and whatnot. It is not strange for a start-up to generate losses initially due to a multitude of factors. Still, 5 mil quid is lowkey alarming for investors.

#11

VirajKnight

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Start up, Financially losing, Doesn't have a fanbase, employee cut etc.. all are franchising risk factors

#12

doosean

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Well, Riot did feature 100T in League, right? They were a start-up also, with all risks you have mentioned.
I mean, Riot could choose to bet on Guild too if they performances manage to be good as they slowly generate a fanbase. You never know.

#13

queueK

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the vast majority of esports org function at a loss funded by VC money. The job cuts are likely influenced by the possibility of a recession.

Riot are likely looking for the total assets the org owns and will own in the near future to evaluate their financials, rather than their margins (though that likely also matters to an extent).

#18

VirajKnight

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Job cuts are more of a red flag. And org's history. They recently released one of the rosters I think Apex Legends. Only positive thing is they have a GC squad. If they didn't have that, 100% they're not making it. But still 80% they're not making it.

#14

kapteN

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Almost every single esports org is operating at a loss. Don't think there are more than 3-4 that are actually making any profit.

Also financials are not a risk factor as Riot is willing to pay stipends to franchises rather than have them pay for the opportunity, a break from other franchising models in esports

#16

VirajKnight

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Surely other orgs don't lose 10 mil previous year and 5 mil next 6 months.

#15

Mbappe

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Besides G2, 100T and maybe TSM no one is making profit. Doubt it will be a deciding factor, but they're not getting in anyway

#17

wizardbot

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Even G2 is not making a profit, it was reported a few days ago

#19

VirajKnight

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They're making profits. They expanded its value by 300% or something past 2 years.

#20

Olofboost

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Do you know what "expanding value of a brand" means?

#21

wizardbot

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Expanding value doesn't mean they're making profit.

#23

kapteN

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Value =/= profit.

Let's use something simple like a bottle of water.

If I sell 100 bottles for $1 each, I earn revenue/value of $100, but can post a loss of $100 if I had to buy them for $2 personally.
If I triple my sales, I triple my value but triple my losses too.

Regardless of my revenue/sales, I could have a "brand value" because I'm known for selling cheap bottles of water, but could have spent another $100 on marketing to achieve that awareness and brand equity. I post further losses but have a higher valuation.

This is extremely simplified, but in any case, valuation does not equal profit.

In the case of an esports org (again extremely simplified): They could have bought a facility for their teams worth $1 million. While the value of their business has gone up with $1 million as they own the asset, they have to report a loss if that $1 million exceeded their income from sponsors and prize money etc.

#22

tonyhart7

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I mean Guild is a new to esports compared to like liquid,fnatic,g2 etc

Is not because Guild finansial problem in the first place

#24

joellogic

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dont worry bros.
David beckham is rich AF.
Guild will not disapear tomorrow. I guess