[toc]The Modern Times Group (MTG) has released its financial results for Q2 of 2016. It has now been a year since MTG bought 74 percent of Turtle Entertainment, the holding company for ESL.
Since the purchase of a majority stake in ESL, MTG has bought 100 percent of Dreamhack, acquired leading U.K. esports agency Kuoda, and launched a 24/7 esports TV channel.
MTG describes itself as “an international entertainment group. Our operations span six continents and include TV channels and online platforms, content production and distribution businesses, radio stations, multi-channel networks (MCN) and eSports.”
Esports is in investment mode
For the first six months of 2016, the MTGx business division, which operates the esports vertical, reported a negative operating income of SEK98 million ($11.4 million).
The figure for the whole of 2015 was SEK111 million ($12.9 million), suggesting that MTG is content to take the loss as it builds its market position. The loss in Q1 of 2016 was SEK50 million, and SEK48 million for Q2.
The investment is reported to be achieving “high sales growth” across all of the MTGx businesses. Sales for the full year in 2015 were SEK451 million ($52.4 million) compared to SEK360 million in Q2 of 2016.
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MTG lists several specific achievements for the MTGx businesses:
- Acquisition of leading U.K. esports agency Kuoda
- Launch of a 24/7 esports channel in May 2016
- Establishment of the World Esports Association (WESA)
- Foundation of the Esports Integrity Coalition (ESIC)
- Launch of the DreamHack Masters international tournament
- Entry to the U.S. market with DreamHack Austin
MTG reported that ESL received 108 million online views in Q2, aided by the ESL One events in Frankfurt and Manila. The recent ESL One Cologne event fell in Q3, so did not contribute to the total.
MTG selling some traditional TV broadcasting to focus on digital entertainment
MTG President and CEO Jørgen Madsen Lindemann explained that MTG’s strategy was shifting from traditional broadcasting to focus on a broader concept of digital entertainment. To this end MTG is exiting several businesses:
“We completed the sale of our shareholding in CTC Media in Q2 and have now withdrawn entirely from traditional broadcasting in the CIS region. As part of our ongoing portfolio optimisation, we have also signed an agreement to sell our free-TV and production businesses in Ghana and Tanzania, subject to local regulatory approvals.”
“We are now not only the leading digital entertainment player in most of our markets, but also a global leader in key digital categories such as esports and MCNs.”