On Jan 31st, eSports Observer reported that Activision entered into an agreement to buy out most of North America’s eSports organization Major League Gaming’s assets for $46 Million dollars.
According to the report, the sale was authorized by MLG’s board of directors on Dec 21st. A letter informing the shareholders was sent out the next day.
In an excerpt from the letter obtained from eSports Observer, $31 million of the $46 million was paid by Activision via cash and taking on certain liabilities. Meaning Activision assumed some of MLG’s mountain of debt. The other $15 million is being held in escrow pending any indemnification claims that may pop up from the transfer.
The report also indicates that the proceeds from the sale will not be enough to cover stock liquidation for all of the shareholders. Only certain tiers of shareholders will be receiving benefits from the sale. Which makes the shareholders on the short end of the stick very upset.
The shareholders who seem to be getting boned can’t believe what their hearing. Some think that most of the money from the sale will be going towards paying off MLG’s bills. That doesn’t leave enough to go around for everybody. This year alone, MLG filed for multiple debt financing rounds totaling over $6 million dollars. One anonymous shareholder commented, “I got fucked on stock.”
In other MLG news its being reported that co-founder and CEO Sundance DiGiovanni is being canned and replaced by former CFO Greg Chisholm.
What will all of this mean for MLG? Only time will tell. Neither side has given details about the sale yet. We will update you if the story develops any further.
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