MTG expects a 35-45% drop in profits in the first half of 2020
MTG expects a 35-45% drop in profits in the first half of 2020 ⚡⚡⚡ Esports news, analytics, reviews on WePlay! The latest news on WePlay!
Yesterday, Modern Times Group (MTG), the owners of ESL and Dreamhack, notified its investors of a drop in the expected revenue for the first half of 2020. This drop is a result of the impact the coronavirus pandemic has had on the company's interests.
Revenue from the first half of the year is expected to drop by 35-45%, while the first quarter will see a 25% decline. Since the coronavirus outbreak, ESL and Dreamhack have been forced to reschedule, restructure, and postpone their events. As much as esports is an industry that can weather the current storm through online events, ESL and Dreamhack events rely mostly on live events with a spectator audience.
This month alone, ESL One Los Angeles 2020 was canceled along with other Dota 2 events of the DPC 2019/2020 season. The Group Stage of ESL Pro League Season 11 also shifted to an online broadcast format, and ESL One Rio 2020 has been moved from May to November. Other events affected by the pandemic are DreamHack Summer 2020 and DreamHack Dallas 2020, which have been postponed for several months and DreamHack Tours 2020, which was canceled.
Inevitably, the coronavirus pandemic has caused some disruption to the review process, and the decision on the best route to separation will be taken once markets have stabilized and the company is able to present two strong equity stories.
The MTG predicts that things will be business as usual by the third quarter. It also intends to propose a buyback plan to recoup 10% of its issued share capital during its annual general meeting in May. If approved, the mandate will not be implemented until after the pandemic is under control.