Month: May 2022

And it’s not hard to see why. Early forays from football teams into esports were conservative to say the least, opting to stay close to football and focus on competitive events for the Fifa football series. The results were mixed at best. The Fifa franchise may have a huge global fanbase, but that hasn’t always translated into successful esports events. As a result, it is not among the top esports viewed globally and is not as popular outside of Europe. 

“That’s why some clubs, which invested into creating their own FIFA rosters, have stopped or scaled down their esports operations,” said Evgeniy Roshchupkin, CEO of esports organization Tundra. “Most of the Premier League clubs now don’t have regular FIFA teams, but only participate in annual ePremier League tournaments.”

Something had to change for Manchester City.

The first real sign was in 2019 when the club did a deal with esports entertainment organization Faze Clan. Not only did the deal introduce the club to an audience that was just as interested in the lifestyle around esports as they were the competitions themselves, it also gave them an expert to help guide them further into esports.

The move seems to have paid off. So much so that the club’s owners City Football Group signed an experienced and successful esports organization Blue United Corporation, the owners and operators of FIFA Esports team Blue United eFC in Japan, earlier this year. Together, clubs and orgs create plans, which resonate with demanding esports and gaming communities — at scale. This involves looking at the wider esports opportunity, focusing on successful international esports titles and authentic community activations with esports fans, said Roshchupkin.

The other major milestone for City was last year when its esports team made the decision to compete in Fortnite Battle Royale, which triggered the aforementioned search for competitive gamers. If successful then the move stands to open the club to even more people. Indeed, there are few pieces of entertainment intellectual property that have the reach and cultural cache that Fortnite boasts. For example: a record 15.3 million concurrent players took part in the conclusion to the Marvel-themed fourth season of the game in 2020, while more than 3.4 million watched it all unfold on YouTube and Twitch, according to Fortnite’s creators. For context, the final episode of the final season of Game of Thrones was watched by 13.6 million viewers live on the HBO channel.  

“We’re a football club and everything we do is motivated by the sport, but in recent months we’ve moved the esports team beyond Fifa and into Fortnite as well,” said Gavin Johnson, group of media director at City Football Group.  “The Fifa series will continue to be our bedrock and we’ll continue to grow in that space but we’re also looking elsewhere too,” said Johnson. 

That said, he’s adamant that the group won’t rush into new gaming titles beyond Fifa and Fortnite. Instead, it wants to ease into other areas, making sure it has a firm grasp of the fandoms of potential titles before reaching a decision on what to do. 

“We will continue to look at other titles for our esports team, but there’s nothing to share at this moment in time,” continued Johnson. “We want to make sure that the foundations are in place.”

Part of those foundations are a support network for competitive gamers. So making sure that they are cocooned in the same sort of elite sporting environment usually enjoyed by their counterparts on the pitch. The esports team already has a mental coach, for example. In total, there are four dedicated execs who support the esports team, which is made up of another four players. 

“We treat the members of our esports team with the same ethos that we do the players of Manchester City football club when it comes to the access to the physical, mental and logistical support to allow them to perform at the highest standard,” said Johnson. “That takes a lot of investment and commitment.”

Aside from the marketing wins that come with having an esports team, there are commercial opportunities too. Last month, both Manchester City and Faze opened up a pop-up shop selling co-branded merchandise at the former’s stadium. A year earlier, the club and its kit manufacturer Puma launched an esports clothing range.

“It is no secret that as the audiences of traditional sports age out, it is smart for traditional sports organisations and clubs to try and get into esports so that they can continue to grow their base — the average audience for many sports is ageing very fast,” said Kal Hourd, CEO of esports company Guild Esports. “As a result, it’s not surprising that a club like Manchester City is looking beyond FIFA and is expanding its esports focus; every esports title brings with it a distinct audience and the loyalties of a different demographic of fans.”

The Supply Chain IQ Score, as OMG is calling it, takes the form of a metric determined by accessing and analyzing product SKU data it has secured through a partnership with a firm called Crisp, an inventory data platform that imports data for about 80 percent of all grocery retailers and distributors. That feed of near-real-time information from the likes of Walmart, Amazon, Target and others, directed through Crisp, gets fed into Omnicom’s Omni marketing orchestration platform, where a cocktail of insights is mixed up by adding media spend data and market basket affinity insights. Out comes a shot of IQ score.

“There is a gap between media strategy and planning, and connecting the execution of that media to supply chain,” said John Schorr, OMG’s managing director of commerce. “So it creates a win-win situation for brands by reducing waste and increasing efficiency and effectiveness. We’ve had clients over the last couple of years pause all media activity based on product availability gaps, because they don’t have the insight to understand where a product is available.”

Evelyn Mitchell, digital advertising and media analyst at Insider Intelligence, agreed closing that gap is inherently a positive. “Having that data integrated into a planning platform makes it easier to leverage that data strategically in the context of media investment,” said Mitchell. “In the short term, optimizing spend away from out-of-stock products can reduce media waste. Longer term, it can preserve consumers’ trust in a brand. If consumers are getting served ads for a product they can’t find anywhere, it can take a toll on the brand’s image.”

The partnership with Crisp is an invaluable element for OMG, since it allows the media agency network to tap a mainline of inventory data. It helps that Are Traasdahl, founder and CEO of Crisp, had a long relationship with OMG through his time as founder and CEO of mobile ad-tech firm Tapad. The idea to essentially weaponize this data for marketers came to him when he met with a brand CMO who, when asked why she had taken the meeting, responded “Well, I can’t sell what’s not on shelves.”

According to Traasdahl, “That’s when the lightbulb went off because this data has a lot of value on the advertising and marketing side,” he said.

“From an efficiency standpoint, it’s accessible … so anyone can log in anywhere they are to access data in real time as the score updates and to utilize it for planning in-market media and investment optimization decisions that have to happen,” said Marc Rossen, OMG’s svp of investment activation & analytics. 

Schorr noted that the IQ score is already in use for an OMG client in the CPG space that plans to launch a new product in the next month across 18-20 regional markets (he declined to name the client or product). 

“We can get more granular with our media and our messaging — and that applies to programmatic, search, social, whatever the digital channel might be,” he said. 

Should that product run low in any of the markets, or not pick up sales momentum,  Schorr said media execution can be altered in less than a day when it used to take weeks because of silo’d information.

“Sales or operations or logistics teams would work with this data, but they didn’t talk to the brand or marketing team,” he said. “Now we’re seeing these teams that used to be sort of disparate, coming together and collaborating.” 

Color by numbers

It’s no secret Meta’s Instagram, with more than 1.3 billion active users, has become quite the hit with creators as well as advertisers. HubSpot recently analyzed 110 million Instagram posts by 1 million users to determine what resonates. Some findings from its 2022 Instagram Engagement Report: 

• Engagement rates on Instagram are highest on Sundays (6.47%), Saturdays (6.05%), and Mondays (5.95%).
• Video and carousel posts are the most popular, bringing an average of 1,100 and 934 likes per post respectively. 
• Captions (long or short) can boost engagement from less than 4% to more than 6%. The most effective ones lead with value.

Takeoff & landing

• Horizon Media landed media duties for retailer Kohl’s following a five-month review. Publicis’ Zenith Media was the incumbent. 
• Dentsu’s Carat named Diana Bojaj its first chief media officer, in charge of overseeing strategy, planning, innovation and content. Bojaj forms the third leg of leadership alongside U.S. CEO Mike Law and chief client officer Stephanie Russell. She was most recently head of business strategy for the General Motors business. Carat also promoted Joanna Hawkes to executive vp, head of strategy. 
• GroupM’s newly merged EssenceMediacom promoted a slew of executives, among them: Mediacom’s COO John Krichefski becomes global COO; Essence’s Richard Mooney becomes global chief data officer; Mediacom’s Matthew Mee becomes chief strategy officer; and Essence’s Sarah Walker becomes global CMO.
• Out-of-home media agency Talon America and the Digital Place-based Advertising Association plan to launch the first upfront for the digital OOH industry targeting brands and independent agencies. Participating media companies forming an unwired network that will be featured in a May 24 event include: Atmosphere, Captivate, GSTV, Reach TV, ScreenVision Media Simon, and Zoom Media. Comscore will provide evaluation of the unwired network.

Direct quote

“If you’re building a [tech] product, the engineers will say, Okay, well, what would make this product runway roadmap fail? Because engineers are very binary — yes, no. It becomes very objective — it takes the subjectivity out of [the process]. What we’ve done is lifted that and applied it to an entirely different subset of building stuff, which is us building brands, businesses and products.”

—Trevor Hubbard, founder and CEO of independent agency Butchershop, about starting client discussions talking about failure rather than success.

Speed reading

• Digiday senior ad tech reporter Ronan Shields examines Google’s latest privacy tool only to find it can enhance ad performance as well. 
• In his latest Future of TV Briefing, Digiday media editor Tim Peterson explains the growing role of demand-side platforms in the buying and selling of TV, and both the opportunity as well as the potential pitfalls they offer. 
• I got an early look at in-cinema ad/content company Screenvision’s new products and services, as it and its competitors try to rebound from dismal box-office attendance the last two years. 

“We’re selling a futures market now. It’s hard to imagine what the country’s going to look like in August of 2023, in 15 or 16 months, but that’s really what we’re selling,” said Jon Steinlauf, chief U.S. advertising sales officer at Warner Bros. Discovery.

WTF is the TV advertising upfront? 

The TV advertising upfront is an annual period of time in which advertisers and their agencies negotiate and sign year-long deals with TV networks as well as connected TV platform and streaming service owners to commit to spend an agreed-upon amount of money to buy ads on the latter companies’ traditional TV networks and/or streaming properties.

The term “upfront” — or “upfronts” — is also used to refer to the presentations that TV networks, CTV platforms and streaming services host to pitch their programming and ad products to advertisers and agencies, but really these presentations are just the most public expression of the TV advertising upfront cycle.

When is the TV advertising upfront cycle?

The TV advertising upfront cycle typically takes place in late spring and runs through the summer, typically wrapping up by the end of August. However, the cycle’s window has been expanding in recent years. Some buyers and sellers have begun their internal upfront preparations as early as October of the preceding year, and some buyers and sellers start their preliminary negotiations in February. In 2021, the pace of upfront negotiations sped up significantly, with some major TV network groups including Disney, Fox, NBCUniversal and ViacomCBS completing their upfront deals before the end of June.

What marks when a company has completed its upfront deals for the year?

When the company has run out of the inventory it is willing to sell to advertisers in the upfront market.

Sounds arbitrary.

Yeah. The TV networks basically calculate how many people they think they can deliver to a given advertiser or agency — including how this audience breaks down into different segments based on categories like people’s age and gender — as well as how many ad slots they’ll have available in the shows they air. Then they determine how much of that ad supply they want to sell in the upfront and how much they want to reserve to sell in the so-called “scatter market,” where advertisers are able to purchase this inventory without making the year-long spending commitments that ad buyers have to make in the upfront.

When do the year-long spending commitments take effect?

Primarily in October and they run through the following September. This timing stems from the origins of the upfront in 1962 when ABC scheduled its shows to premiere their new seasons in the fall and sought to secure ad deals for the shows in the spring. 

Some advertisers have done upfront deals on a calendar-year model, with the deals taking effect in January and running through December. However, these calendar-year advertisers were often at a disadvantage because the networks prioritized the traditional so-called broadcast-year model. That staggered sales process resulted in calendar-year advertisers effectively negotiating for sloppy seconds and being pressed to pay higher prices, leading to the calendar-year option all but evaporating in last year’s fast-paced upfront market, according to TV network and agency executives.

Why do upfront advertisers have to make year-long spending commitments?

Because the TV networks say so. That sounds flip, but it’s the truth. There is a limited supply of ad inventory on traditional TV — because the networks typically only air up to 16 minutes of ads per hour and each available ad slot is largely only allotted to a single advertiser at a time — so the TV networks use this scarcity of supply to press advertisers to lock up this inventory ahead of time through upfront deals.

But why do advertisers agree to participate in the upfront?

Because it can be good business. Even though traditional TV viewership is declining, it remains the most cost-effective means for an advertiser to reach a large number of people at the same time. So for marketers looking to raise people’s awareness of a brand or product, advertising on TV remains a pillar of their overall advertising strategy. And since there’s a scarcity of supply, there’s a fear of missing out among advertisers knowing they need to reach TV viewers to secure that reach through upfront deals, in which TV networks guarantee to deliver an advertiser the ability to reach a certain number of people a certain number of times.

“That happens in a seller’s market. [The TV networks] create that kind of FOMO. It just gets you to put more [money] in [the upfront market] because you don’t want to potentially lose out on the opportunity,” said an agency executive.

Is FOMO the only motivating factor for advertisers to participate in the upfront?

No, it can also be more cost-effective, assuming an advertiser expects to spend millions of dollars on TV advertising in the upcoming year. Think of buying TV advertising in the upfront market as akin to buying household products in bulk. If you know you’re going to need to use toilet paper for months to come, then it can be cheaper to buy one big pack of toilet paper at a time than to buy individual rolls. Compared to the scatter market, TV ad prices secured in upfront deals are typically 20% to 40% lower and can be as much as 80% in periods like the fourth quarter when there is a lot of advertiser demand and limited inventory supply, according to TV network and agency executives.

What if a TV network fails to deliver on the audience guarantee it makes to advertisers, or if an advertiser decides they don’t want to spend the money they committed to a TV network? Is there a refund or return policy for upfront deals?

Sort of. If a TV network fails to deliver on its audience guarantee, then the advertiser is credited with what are called “audience deficiency units” (ADUs). These are also referred to as make-goods and effectively serve as I.O.U.s by which the TV network promises to run the advertisers’ ads elsewhere on its traditional TV networks and/or streaming or digital properties to make up for the shortfall.

Meanwhile, advertisers cannot entirely get out of their upfront commitments — with the major exception being the initial stage of the pandemic in spring 2020 when TV networks did allow some advertisers to cancel their upfront commitments — but upfront deals do contain cancelation options that allow advertisers to renege on a portion of their commitments. The cancelation options vary, but typically advertisers are able to cancel up to 30% to 50% of their quarterly commitments so long as they request the cancelations at least 30 to 60 days before the quarter begins.

This is all pretty TV-heavy, but you mentioned CTV platform and streaming service owners also participating in the upfront. Do they do things differently?

In some respects, yes. Amazon, Roku and YouTube are the primary streaming-only players in the upfront market, and they generally do not adhere to the same upfront deal structure of the TV networks. Instead of fixed commitments, these streaming-only sellers sign what are commonly called “endeavor deals” with advertisers. The difference with endeavor deals is that an advertiser is not on the hook to spend a certain amount of money to buy ads from the CTV platform or streaming service but instead has set spending goals that when reached unlock perks like lower ad rates and select inventory options or ad products. 

Additionally, the streaming-only sellers typically permit advertisers to cancel up to 100% of their commitments up to 14 days before a campaign is slated to run, though Roku raised the stakes last year by offering a two-day, 100% cancelation option.

“Enthusiast Gaming always seeks to ensure that it is operating the business as efficiently and effectively as possible and that it is positioned strongly to execute on its growth strategy. Unfortunately, this sometimes includes making difficult decisions about staffing levels. Whenever they occur, these decisions are not taken lightly and we always work to ensure our employees are treated with respect,” said Enthusiast Chief Corporate Officer Eric Bernofsky in an emailed statement, provided in a direct email response after Digiday reached out to Enthusiast’s press contact.

Enthusiast Gaming did not respond to several questions for this story or offer anyone to talk to over the phone. Bernofsky said in his prepared statement that “privacy and confidentiality reasons” kept the company from answering questions about specific employees.

It all came to a head in March 2022, when it came time to balance the books of the publicly-traded company. Instead of building on the groundwork laid by Morrison and his staff, Enthusiastic executives seemingly decided to gut the company, pivoting to a focus on video content. The decision made some esports media workers speculate about whether a pathway to profitability still exists for focused, endemic esports journalism. “Trying to swallow years of losses to build up a brand is great, in theory, but very rarely do boards and executives have the stomach for it when it comes to practice,” said Jason Chung, an assistant professor of sport management and executive director of esports at the University of New Haven.

Of Upcomer’s 26 full-time staff, 11 were laid off on March 10, including editors, writers, social media managers, podcast staff and Yanier “Niero” Gonzalez, the founder of Enthusiast-owned website Destructoid, who worked at the company since June 2017. (Editor’s note: Prior to joining Digiday, the author of this story wrote freelance articles for both the previous and current iterations of Upcomer.)

A handful of employees now populate Upcomer, including a skeleton crew of writers and editors. The bulk of Upcomer’s editorial content is now written by freelancers, and some of the retained writing staff quietly left the company over the past month. The website’s video department was largely unscathed by the layoffs, though some of Upcomer’s video creators now work across multiple Enthusiast Gaming properties, per a former staffer.

And while Upcomer’s video content had been doing well on platforms such as Snapchat, its viewership has suffered in the wake of the layoffs. YouTube viewership of Upcomer’s video content peaked at about 964,000 in December 2021 but subsided to 255,000 by the end of March 2022, according to data pulled from video analytics firm Tubular Labs.

Many of the former or current Upcomer staffers Digiday spoke to requested anonymity, either because they were current staffers and feared reprisals by their employer or had already been laid off and signed a non-disclosure agreement to receive severance pay. 

Some former staffers said they felt pressured to sign the NDAs quickly, without consulting a lawyer or advisor. The process was complicated, they said, once they were laid off and their access to their Upcomer email addresses and Slack accounts were cut off.  Those NDAs were part of a string of cruel actions Enthusiast Gaming took amid the brand’s reimagining, those employees said.

A promising trajectory

On the surface, before the layoffs, the brand was doing well: the publication steadily built readership since its launch in March 2021, rounding out its staff with hires such as European League of Legends insider Brieuc “LEC Wooloo” Seeger. (Seeger is still employed with the company.) Between March 2021 and March 2022, Upcomer’s readership increased by 509 percent, according to traffic data provided by media measurement firm Comscore, with much of that growth coming in the early months of 2022.

The website covered esports from a firm journalistic perspective, much like ESPN Esports — which had employed Upcomer’s two top editors — but boasted its fair share of irreverent thinkpieces and general gaming coverage.

Publicly, Enthusiast seemed to have an appetite for investing in the brand even a day before the layoffs, when the official company Twitter account retweeted editor-at-large Tyler Erzberger’s post claiming the site had just smashed a viewership record by reaching more than 1.1 million page views over the span of eight days.

But there were cracks even in the early days of the relaunched site in mid-2021, suggesting the brand did not have the wholehearted support of Enthusiast Gaming’s upper management. 

In June 2021, executives laid off a diversity and inclusion consultant that they had hired only four months prior. The consultant’s introductory memo for Upcomer, which trumpeted a warm message of inclusivity, was quietly removed from the site, only to be reinstated after staff members protested. There were no efforts to replace her role, with higher-ups claiming that her responsibilities would be taken over by a new executive hire. The role is not currently occupied, nor is there a public job posting available for the position.

Warning signs

There were other early warning signs in the relationship between Enthusiast Gaming and Upcomer. The two companies began as separate entities; the original Upcomer esports app launched in Los Angeles in 2018, while Enthusiast has been based in Toronto since its founding in 2014. Although Enthusiast acquired the Upcomer brand in 2020, former staffers said it was never entirely clear how the website would align with the rest of Enthusiast’s media properties.

What did become clear was that Upcomer was a pet project of Enthusiast Gaming founder Menashe Kestenbaum, who was serving as the company’s president when it acquired and relaunched the brand. So in early 2022, when Upcomer staff learned that Kestenbaum would be “stepping down” into a consultative role on the company’s board, they worried that the news would lead to a deprioritization of Upcomer. “Upcomer was his baby; we were under his umbrella,” said one staff member. “As soon as he was forced out, that was when they started moving the goalposts about how many views we had to hit.”

On March 31, Kestenbaum publicly acknowledged that he was no longer with the company, announcing that he was leaving the company to start his own venture capital firm, though he remains a major shareholder of Enthusiast. According to Kestenbaum’s tweeted announcement video, he realized he was more comfortable developing new businesses than helping larger companies scale up. He did not immediately respond to Digiday’s specific queries for this article.

In the video, Kestenbaum appeared to be somewhat taken off-guard by the need to announce his career shift: “I was going to time this up, as well, with having the announcement for my venture capital fund in gaming and tech, which isn’t ready, unfortunately,” he said. “So I’m going to have to kind of do a mini-reveal, kind of ruin the surprise a bit.”

“Menashe was the biggest champion about Upcomer — it was like his passion project,” said an anonymous former staffer. “So, to have someone like him not on the leadership team anymore at Enthusiast, and replaced with other, non-endemic [executives], said to me, OK, I can expect that this year is going to look a lot different from last year.”

Enthusiast execs — primarily vp of content Ryan Musselman and director of content Rob Jones, according to former Upcomer employees — started to pour on the pressure almost immediately, cranking up the website’s readership goals to what staffers saw as unreasonable figures, although it was already on track to become one of Enthusiast’s largest publications.

Page view expectations for the year, for example, went up to 75 million, a staffer said.

“We had hit like 7 million last year,” another anonymous staffer said, “so they went up 1,000 percent.”

Cruel and unusual

Despite the new goals, Upcomer staffers still felt their jobs were safe after Kestenbaum’s exit after several of them had informal conversations with Morrison, the editor-in-chief, in which he promised that they could count on staying employed for the immediate future. Morrison did not immediately return a request for comment.

Days before the layoffs, Enthusiast Gaming execs began to more deeply probe whether Upcomer’s business model could change, whether into video or if it could be brought more in line with Destructoid, another Enthusiast property that employs a handful of full-time editorial staff and otherwise relies on freelance content.

Staffers interpreted that the executives behind the video push were Musselman and Jones, who both cut their teeth at prominent gaming entertainment network Machinima in the early 2010s. One former Upcomer staffer told Digiday that Musselman, motivated by unrealistic expectations from his experience working in video, had been pushing for cost cuts in Upcomer’s written editorial department for months. (Premium video content in gaming and esports is far from a tried-and-true strategy; VENN, which billed itself as the future of high-production gaming video content, disintegrated last year, and it’s yet to be determined if the relaunched G4 network will succeed.)

Shocked by the executives’ queries and their implications, Morrison summoned Upcomer’s staff writers for an emergency meeting, informing them layoffs could be on the horizon. Morrison was on the verge of going on vacation, and though he anticipated bad news, he didn’t think Enthusiast would make its move until he returned, according to staffers.

Morrison was mistaken. At the end of the following day, the majority of Upcomer’s staff were invited to a meeting on March 10, titled “Upcomer Vertical.” The writing was on the wall. “If you looked at Sean’s calendar, you could see that there was another meeting right after that one, just Sean and a bunch of freelancers,” said a laid-off staffer. “The next day, I literally woke up like, ‘OK, I’m going to lose my job at this meeting.’”

The meeting opened with the announcement that those present would be laid off. Morrison, who tuned in for the call while on vacation, became irate, criticizing the timing of the news and interrupting the Enthusiast human resources workers making the announcement to tell the laid-off staff that they were still entitled to the bonuses written into their contracts. “After the meeting, we were talking on Slack,” said former Upcomer writer and social media manager Carolynn Soba. “Sean was like, ‘don’t worry, your bonuses are going to be paid out.’”

The majority of laid-off Upcomer employees were denied their promised annual bonus, a snub that some said felt like a slap to the face after their year of hard work. Most staffers were told that they would receive a $5,000 end-of-year bonus upon completing goals that had been verbally communicated, but not written into contracts. Though Morrison had promised that the bonuses would go through even before news of the layoffs was public, they hadn’t yet gone out before March 10.

“The wording for the bonus was ‘as long as the milestones are met’ — and we met the milestones at the end of the year,” Soba said. “They were like, ‘as far as we know, that bonus was discretionary.’ They were using that kind of terminology to say that they didn’t owe us anything.” 

The company also pressured laid-off staffers to sign an NDA to receive their severance pay, which ranged between one and three weeks’ worth of salary, according to three of the laid-off employees Digiday reached for this report.

“It goes to show how knife’s-edge they were, with regard to profitability and revenues, if they had to break promises to a bunch of very talented people and basically shut down a site that was becoming a pretty good resource for the community,” Chung said.

Upcomer’s decent salaries — by esports media standards at least — made this even more of a knife twister. With the exception of the top brass, writers’ and editors’ salaries floated between $50,000 and $75,000, far more than other prominent endemic publications, such as Dexerto, which offers writers a starting salary of $30,000 to $35,000.

The top paid weren’t spared either: Erzberger, the editor-at-large, was laid off by Enthusiast the day before the rest of the staff found out. As the face of the new publication, Erzberger’s salary was well within the six-figure range, according to several former Upcomer staff, making him a juicy target for Enthusiast executives looking to cut costs. “I was told by Tyler [Erzberger] that they ‘took him out back’ the night before,” a former staffer said, adding that Erzberger had purportedly received a larger severance package as well.

Most of the staffers Digiday reached for this article believed the decision to gut Upcomer was ultimately made by Enthusiast Chief Operating Officer Thamba Tharmalingam. Notably, Tharmalingam was on vacation during the layoffs — another source of frustration for Morrison, who called out the COO’s absence at the March 10 meeting.

Here we go again

There was a cruel irony to the Upcomer layoffs: for some of the staff members affected, it was the second time they’d been laid off by the same brand in less than three years.

The previous iteration of Upcomer was an esports score-tracking mobile app with an editorial vertical; when the app ran out of runway in mid-2019, its editorial staff was unceremoniously laid off by upper management under previous ownership. In a bid to bring back the spirit of the old Upcomer after Enthusiast acquired the brand, Morrison recruited a number of former staff members to return to the website for the March 2021 relaunch, only for them to be laid off in a similar manner just over a year later. 

“This iteration of Upcomer, in my opinion, was such a layup in a lot of ways,” said a former staffer.

Publicly owned

Morrison and Erzberger were not the only former ESPN Esports staff to be poached by Enthusiast Gaming to help breathe new life into the Upcomer brand. Former ESPN staff writer Jacob Wolf was approached by the company in late 2020. (This Digiday reporter, also a friend and former colleague of Wolf, was also approached about a potential job at Upcomer in early 2021.) “I remember that their strategy was very much ‘we want to recruit the biggest names in esports, the most relevant names in esports, and create this website,’” Wolf said. “The offer that they presented me very early on, without a lot of extra discussion, was $200,000 base salary, $50,000 in stock incentives and $50,000 in cash bonuses related to performance.”

Wolf eventually decided against accepting the offer, taking an investigative reporting job at Dot Esports instead before leaving Dot to focus on his own production company, Overcome. “The entire discussion just kept coming back to ‘we want to hire the biggest names, and we want to pay you this much,’” he recalled.

Enthusiast’s lack of a seemingly cohesive strategy for Upcomer is a reflection of the broader challenges it faces as a gaming and esports holding company that is, at the moment, one of the few publicly traded firms in the industry. Fundamentally, the holding model is a strong one for esports companies: as companies in the space increasingly look to attain high valuations and go public, having a wide range of tangible assets and products is certainly an advantage. But today’s highest-valued esports organizations are just now pivoting to this model after spending years building their brands through a focus on competitive gaming. Enthusiast has been following the holding company model from the beginning, so it lacks the same cohesive identity. 

“They’re trying to figure out where the next big thing is going to be — and when you have such disparate properties within your organization, the question of what exactly you are becomes a very valid question,” Chung said. “Are you a media conglomeration? Are you an esports organization? Is there a distinction between the two?”

Enthusiast’s plummeting stock price may have been the straw that broke Upcomer’s back. Like the broader market, Enthusiast Gaming stock has not fared well in 2022. $EGLX currently sits at $1.63 a share, down from $2.88 at the beginning of the year and a high of $8.54 in April 2021. With Kestenbaum out of the way and a slew of salaries on the chopping block, Upcomer provided a ripe target for Enthusiast executives looking to balance the books before their next earnings report. “EG’s quarterly report is coming up, or has already happened, and their stock is way down,” a staffer said. “And I think they were trying to shed as many costs as they could.”

The demise of Upcomer has left some esports journalists with a sense of doom about the state of the industry. If esports media properties want to succeed, they may have to explore alternative revenue streams, such as Dexerto’s brand consultancy — that is, if the companies that own them even give them enough time to grow organically.

In its statement, Enthusiast Gaming said the company overall was growing but gave no indication about what this meant for the Upcomer brand specifically.

“Menashe had a whole five-year plan,” Soba said, “and that kind of went to shit.”