In September last year, the Modern Time Group (MTG), the parent company of the Electronic Sports League (ESL), announced that the planned Chinese joint venture had failed.
Originally, it was planned that ESL would enter the huge Chinese market by cooperating with the streaming service HuyaTV. Now a new strategy must be found.
Disagreement over risks
MTG stated in the press release that the main reason for the failure of the negotiations was the failure to agree with Huya on the commercial and contractual risks. Accordingly, the negotiations were broken off.
The originally planned investment of HuyaTV in the amount of 30 million US dollars in shares of ESL is therefore also no longer valid.
Nevertheless, an expansion of the commitment in China is one of the major priorities for the esport giant. The president and managing director of MTG, Jørgen Madsen Lindemann, made the following statement:
We continue to believe in the logic of this transaction and its potential for MTG, Huya and the global esports industry. Nevertheless, expansion into the important Chinese esports market remains a high priority for MTG and we look forward to taking advantage of further opportunities in the near future.
Share price slide
After the announcement, MTG’s share price fell by almost 20% (from 110.95 Swedish kroner to 93.70 kroner). It is not yet clear whether there will be further consequences for MTG and ESL in the future. In its press release, the group assured that ESL 2020’s operating business would not be affected by the failure of the negotiations.
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