Esports organization The Guard is the latest entity to suffer layoffs in the gaming industry, with its parent organization looking to sell two of its esports assets: the Los Angeles Gladiators of the Overwatch League and the LA Guerillas of the Call of Duty League. The teams must be sold before the end of the year to remain in their respectiveesportsleagues. Failing to secure a buyer by the season’s end may result in the closure of the two teams.The Guard, which fields teams inCall of Duty,Overwatch,Valorant,Halo, andApex Legends, abruptly laid off its entire staff recently as fears of inflation and lack of revenue affect another gaming entity and part of a larger umbrella of downsizing in the tech industry as of late. Otheresports organizations like TSM have had funding issues recently, and 100 Thieves, Faze Clan, and OpTic, have all done layoffs, but none to the level of The Guard. The Guard’s parent company is Kroenke Sports and Entertainment, which operates sports teams like the NFL’s Los Angeles Rams, NBA’s Denver Nuggets, Arsenal FC in the Premier League, and Colorado Rapids in MLS.RELATED:Hearthstone Scales Back 2023 Esports Program, Fans Fear for Game’s FutureAccording to Esports.gg, The Guard has laid off the majority of its staff, including content creators, behind-the-scenes personnel like social media managers, human resources, and many more. Members of their esports teams remain and word from one former The Guard employee claims that organizational personnel for the teams are still employed. The LA Guerillas have begun their Call of Duty League season and the LA Gladiators' season in theOverwatch League is set to start later in the Spring. But The Guard is putting both of these teams on the market to recoup some of its franchise buy-in fees under Activsision-Blizzard’s esports system.
Sources have told Sports Business Journal that Kroenke Sports and Entertainment could potentially leave the esports scene altogether, and may be an early sign that other investors from traditional sports may be getting more nervous about the current state of the gaming and tech industries. The selling price, if Kroenke Sports and Entertainment can find a buyer for both esports teams, could come at a loss. As one of theOverwatch League’s founding teams, the Los Angeles Gladiators' franchise fee was somewhere around $15 million. The franchise fee for the LA Guerillas was approximately $25 million. It may take The Guard months of negotiations to find a buyer or another entity that will be willing to buy or run these teams after their 2023 seasons.
The Guard has until the summer to sell the LA Guerrillas and until October to sell the Los Angeles Gladiators, when the season for each team ends. Call of Duty League andOverwatch League fansare hoping not to lose a franchise in their respective leagues as the gaming and tech industries continue to grapple with shrinkage after the substantial growth they experienced in the last few years. Overwatch League teams are also bringing collective action against Activision Blizzard as teams struggle with profitability.
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