In an interview with fragster.de, Matthieu Dallon, the founder and President of ESWC shares his opinions on ESWC going bankrupt, Games-Services entering liquidation, their business model, the missing prize money and more.
ESWC’s parent company Games-Services went bankrupt due to “facing a serious cash flow crisis” in early April, the main reason behind this was the global financial crisis. So all the potential sponsors and partners had to reduce their marketing budgets as a result of sales decline.
We have been directly affected two times by the global crisis. The first wave was in the first semester of 2008, in the USA, during the sponsorship prospecting for the San José Finals. Everyone noticed we had only Nvidia as partner of the event. The second wave was in Europe between September 2008 and March 2009, during the prospecting for ESWC 2009. We have contacted several dozen of potential partners, big and small brands. We always received the same answer: Our stock value is in free fall, the sales decline, we are going to lose money this quarter, nobody knows when all will restart, so we have to reduce all our marketing and communication budgets, we have to target our direct consumers, and we have to cut all special budgets as sponsoring or alternate advertising.” Our licensed partners all around the world faced the same difficulties, what has doubly impacted our financing. We were a small company, a surviving start-up of year 2000, whose business model was still not totally fulfilled, so the crisis has been lethal to us. Yes, the general economic surrounding clearly is the reason of the ESWC bankruptcy.
The thing that most people have been talking about most is the missing prize money for ESWC 2008 Grand Finals and Masters.
Since 2007 and the massive losses of the company, we paid the prize money in a staggered schedule of eight to twelve months. This was an unhappy effect of the company’s schedule of expenses and incomes, and of our low-level of cash. We did it in an open manner by informing players before the tournaments. But the sudden crisis stopped the process. I’m sincerely personally affected by that, much more than by all I’ve lost in that crisis. It is unfair and harmful to all the champions. Even though I have no personal liability in that process of payment, I do my best to make it happen. I help the liquidator to find the best new business owner. I help him to give the best values to all the company’s assets. Then, in the best scenario, two possibilities: The liquidator directly pays the prizes with the money gathered at the end of the liquidation, or the new business owner pays the prizes as single debt of ESWC to cover.
Read the full interview HERE
Source: SK Gaming
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