Beyond the Summit, The Guard shut down as layoffs spread across esports

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

Beyond the Summit started around 2012 as a passionate project driven by love for the esports community. In 11 years, BTS has professionalized and become a top tournament organizer and production company, especially in the Dota 2 and Smash Bros. communities. More recently, the company has expanded into supporting creator-driven events.

BTS is known for their unique style, often focusing on a casual or homely atmosphere rather than a more traditional setting. This has made BTS a key player in esports. Despite its status, BTS is the latest casualty of the esports winter as layoffs spread.

“Given our current financial outlook and how challenging next year will be, we have decided that keeping BTS in its current structure would be irresponsible. So, after nearly 11 years in business, we have made the extremely difficult decision to fire all of our people,” BTS co-founder David “LD” Gorman said in a statement.

Gorman confirmed that Beyond the Summit has now closed its doors so as not to leave its staff out in the cold. BTS will keep all full-time employees on payroll for the next 2 weeks and will offer severance packages and health care for US workers until the end of April. BTS has also released a list of 27 affected employees to help them secure new positions.

While many esports companies have taken advantage of VC funding, Beyond the Summit has not done so despite investor interest according to Gorman’s statement. BTS valued being grassroots and independent with an emphasis on serving the community.

Beyond the Summit’s final event will be the upcoming Smash Ultimate Summit 6, which takes place from March 23-26.

Traditional sports ground dries out

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

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

These initial investments from traditional sports have skyrocketed. Several sports organizations have relied on esports as a growth opportunity. Traditional sports leagues such as the NBA, NFL, MLB, NHL, MLS and many soccer clubs around the world have invested in their own esports leagues and tournaments.

Unlike BTS, The Guard employees were surprised by the news. Employees expressed their shock and disappointment via Twitter. A former employee, Hunter Grooms, created a spreadsheet listing the 29 affected employees. It is unclear what severance packages were offered.

The chilling effect of layoffs in esports

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

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

Meanwhile, traditional sports companies have been a key source of investment and infrastructure for esports. Funding will become even more difficult than it is now if interest from traditional sports companies wanes. Similarly, when companies tighten their belts in the face of a recession, they look for opportunities to cut costs. If esports does not show a strong return on investment in traditional sports teams and leagues, they may follow KSE’s footsteps and reduce their esports programs.