Even though Sentinels has been one of the most talked-about teams in North American esports in recent memory, the organization is still struggling to keep the lights on through 2023. In fact, in an offering letter submitted to the U.S. Securities and Exchange Commission, the team marked down significant financial losses through last year.
In the letter, it was noted that Sentinels made $2.4 million in net revenue with a gross profit of just over $1.9 million, which is also $589,000 more than what the organization made in 2021.
This, however, was negated heavily by the company’s massive expenditures through the year, which equaled to just over $10 million through general and administrative costs and spending for sales and marketing. Ultimately, Sentinels was left with an $8.2 million loss, in a year where the team signed multiple star VALORANT players and content creators.
Related: Sentinels’ $695K per month salaries necessitate more investment—even if crowdfunding works
The letter also confirmed that Sentinels were spending $695,000 dollars a month on expenses relating to player contracts, content creators, staff, and merchandise availability. As a result, the team recently opened a crowdfunding campaign on Friday, Aug. 4 in order to bring in more investors so that the org can continue to operate.
If the team reaches the minimum offering amount through crowdfunding without any additional capital raised through existing shareholders or other sources of financing, they will only be able to operate for two to three months more.
Losses like these will continue to bring attention to the unsustainable nature of esports. For example, this news followed reports stating that multiple teams in the competitive VALORANT space were looking to downsize their operations in 2024, with teams like Cloud9 and 100 Thieves supposedly reducing player salaries for next year after missing this year’s Champions tournament.
Published: Aug 8, 2023 05:16 pm