Beyond Summit, The Guard closed as esports layoffs spread

Beyond the Summit (BTS), a leading esports production company and facility, announced that it was laying off all of its employees. This comes shortly after the traditional esports organization, The Guard, announced that it would do the same. These layoffs signal that even prominent esports companies are feeling the chill of the esports winter.

Beyond the Summit was founded around 2012 as a passion project driven by a love for the esports community. Over the course of 11 years, BTS turned professional and became one of the top tournament organizers and producers, particularly in the Dota 2 and Smash Bros communities. More recently, the company has started to support events aimed at creators.

BTS is known for its unique style, often focusing on a casual or down-home feel rather than a more traditional stage setup. With that, BTS became a major player in esports. Despite their status, BTS are the latest casualties of the esports winter as layoffs spread.

“Based on our current financial outlook and how challenging the year ahead looks, we decided it would be irresponsible to keep BTS in its current structure. So, after nearly 11 years in business, we’ve made the extremely difficult decision to lay off our entire staff,” David “LD” Gorman, co-founder of BTS, said in a statement.

Gorman stated that Beyond the Summit has now closed its doors to not leave its team out. BTS will keep all full-time employees on the payroll for the next 2 weeks and will offer severance packages and health coverage to US employees through the end of April. BTS has also published a list of the 27 affected employees to help them secure new positions.

While many esports companies have received VC funding, Beyond the Summit has not, despite investor interest, according to Gorman’s statement. BTS valued being popular and independent with a focus on serving the community.

In addition to the last Summit event, will be the upcoming Smash Ultimate Summit 6, which will be held from March 23rd to March 26th.

Traditional sports backing drying

Last week, The Guard suffered a similar fate to Beyond the Summit. The esports organization was founded in 2017 when Kroenke Sports and Entertainment purchased a franchise in the Overwatch League. The Los Angeles Gladiators joined the Los Angeles Guerrillas in 2019 when the KSE purchased a spot in the sister Call of Duty League. In 2021, the team introduced The Guard brand to create a unified brand for its esports ventures, including Valorant, Halo, and Apex Legends.

Kroenke Sports and Entertainment is owned by Stan Kroenke. His sports empire includes Arsenal FC, Los Angeles Rams, Denver Nuggets, Colorado Avalanche and many more. In the early stages of the Overwatch League, Kroenke’s backing alongside non-endemic heavyweights like Robert Kraft (NE Patriots), Comcast Spectacor (Philadelphia Flyers) and Jeff Wilpon (NY Mets) added legitimacy to the league. It helped OWL reinforce the goal of mimicking the structure of traditional sports.

These early investments in traditional sports snowballed. Several sports organizations have leaned towards esports as an opportunity for growth. Traditional sports leagues like the NBA, NFL, MLB, NHL, MLS and many football clubs around the world have invested in their own esports leagues and tournaments.

Unlike BTS, The Guard staff were stunned by the news. Employees took to Twitter to express their shock and disappointment. The former employee, Hunter Grooms, created a spreadsheet of the 29 affected employees. It is unclear what severance packages were offered.

Esports layoffs have chilling effect

The closure of BTS and The Guard could have a chilling effect on the market.

Beyond the Summit was one of the largest non-publisher-affiliated esports tournament organizers. Last year, the Public Investment Fund of Saudi Arabia acquired ESL, its subsidiary DreamHack and FACEIT. All three of these merged companies were major independent tournament operators. With the closure of BTS, there are even fewer – particularly in the US – independent tournament operators.

Meanwhile, traditional sports companies have been the main source of investment and infrastructure for esports. Financing will become even more difficult to secure than it already is if interest from traditional sports companies wanes. Likewise, as companies tighten their belts for a recession, they look for opportunities to cut costs. If esports doesn’t show a strong ROI for traditional sports teams and leagues, they may follow in the KSE’s footsteps and cut their esports programs.