How the layoffs at 100 Thieves underscore esports’ creator-executive leadership problems
It’s an oft-repeated truism that creative types don’t always make the best business leaders. Nowhere is this more apparent than the esports industry, whose former-pro-gamer executives often lack the commercial nous and marketing smarts to transform their hype-fueled brands into sustainable companies.
Many of today’s leading esports organizations were founded by pro gamers, initially taking the form of gaming clans or YouTube content collectives rather than full-fledged businesses. As venture capitalists started to invest millions of dollars into esports teams over the past few years, their creator–founders tended to stay at the helm — for better or worse.
“Without these companies being creator-led to begin with, they would not come close to the valuations that that they eventually got,” said esports industry insider Rod “Slasher” Breslau. “The downside, however, is that most of them are not business people.”
These challenges were on full display on Jan. 10, when the leading esports organization 100 Thieves laid off roughly 30 of its employees — or roughly 15 percentage of its workforce, mostly across its content and partnership departments. The wave came six months after dozens of staffers were laid off in July. Representatives from 100 Thieves did not return multiple requests for comment.
One of the good ones
Esports organizations have long been notorious for elevating professional gamers to more business-focused senior executive roles — and for suffering scandals as a result.
Richard “Banks” Bengston, the former chief operating officer of FaZe Clan, dragged the company into controversies involving cryptocurrency schemes and illegal gambling before stepping down in May 2022. At TSM, CEO Andy “Reginald” Dinh was fined by Riot Games last year over allegations that he verbally abused some of his employees. Some workers in the esports industry are beginning to lump 100 Thieves founder and former pro “Call of Duty” player Matthew “Nadeshot” Haag into that group, too.
Haag did not immediately return requests for comment.
100 Thieves was Haag’s brainchild, but his leadership style was flawed, according to former staffers, who told Digiday that Haag treated some coworkers rudely, prioritized his passion projects over 100 Thieves’ money-making partnership business and failed to professionally communicate the company’s business plans.
Haag founded 100 Thieves in 2017 and now serves as both the CEO and public face of the company, which is considered one of the most popular esports brands in the world. Backed by $120 million in venture funding, 100 Thieves counts Drake, Scooter Braun and Dan Gilbert among its ownership group, as well as Haag and his fellow creator–owners, the popular streamers Rachell “Valkyrae” Hofstetter and Jack “CouRageJD” Dunlop. The org has won numerous titles in games such as “Call of Duty” and “League of Legends” and was valued at $460 million during its latest funding round in December 2021.
100 Thieves built a reputation as one of the good ones — an esports organization genuinely well-positioned to function as a business in the long term. The company has a robust M&A strategy, and its streetwear-inspired merchandise has often sold out in a matter of days. In 2019, The Verge referred to 100 Thieves as “the Supreme of esports;” last year, Forbes ranked it as the second-most-valuable esports org in the world.
But it’s beginning to look like a completely different company. The latest layoffs left at least one department — content production — “almost completely gone,” according to a former 100 Thieves staffer, one of six who spoke to Digiday and requested anonymity over fears that speaking out could jeopardize future esports job opportunities. Of the 188 employees at 100 Thieves that are publicly listed, many are contracted, part-time or no longer work there.
Moreover, 100 Thieves’ positive public image belied a culture of confusion and executive mismanagement, according to four former employees of the company.
Haag used his time and resources to prioritize expanding his own passion projects, including an energy drink called Juvee and a game development studio, over the partnership business necessary to keep 100 Thieves chugging along, according to three former employees.
And this passion clouded his ability to hear, and act on, critical feedback, even from other C-level executives, former employees told Digiday.
“In general, there’s a bit of a culture of fear,” a second former staffer told Digiday. “Nobody wants to step out of line.”
Four of the former 100 Thieves staffers who spoke to Digiday for this report expressed misgivings about the long-term viability of Juvee, but said that 100 Thieves management ignored these concerns. While the long-term viability of Juvee is yet to be determined, the gaming energy drink space is already somewhat saturated with competitors such as G Fuel and Rogue Energy and any consumer packaged goods business comes with high overhead costs for shipping and manufacturing.
Haag’s lack of trained business experience also occasionally came out in the way he communicated company strategy to 100 Thieves staff. 100 Thieves bundles its creators’ social followings to create a team-wide total to share with investors and partners, which is a standard practice among large esports orgs. But during one all-hands meeting, Haag referred to this practice as “selling them some snake oil,” according to two former staffers.
Passion over profits
Haag’s mercurial approach to 100 Thieves directly impacted its partnership business, according to two former employees of the company. Many of the org’s brand partners expected Haag to feature heavily alongside 100 Thieves’ other creators in the org’s branded content and activations — but as 100 Thieves grew and its sponsorship obligations expanded, Haag’s participation in branded content declined noticeably.
In recent months, Haag and other prominent 100 Thieves members such as Dunlop have rarely participated in branded content, according to a fourth former staffer. “I think that’s why a lot of the viewership has been lost — because they have all this different talent that’s there,” said a third former staffer. “They’re like, ‘who are these people? This isn’t what we signed up for.’”
Over the past six months, viewership of 100 Thieves’ YouTube channel declined by 12.39 percent and engagement with partnered videos on 100 Thieves’ YouTube channel declined by 54.55 percent, according to the data platform GEEIQ.
Six of 100 Thieves’ brand partners did not renew their contracts with the org in 2022, according to GEEIQ: Rocket Mortgage, Omen by HP, Dollar Shave Club, Rockstar Energy, StockX and CashApp. Rockstar Energy owner PepsiCo declined to comment on its reasons for ending the partnership with 100 Thieves, and the other brands did not immediately return requests for comment.
At the moment, brand partnerships account for the overwhelming majority of most esports organizations’ revenue. Although 100 Thieves president and COO John Robinson told Digiday in January 2022 that the company’s revenue streams were split evenly between partnerships and apparel sales, two former employees informed Digiday that partnerships formed the bulk of the company’s revenues, as they do for other large esports orgs.
“They’ve run into literally the same issues as every other organization, except that they have made 100 times the splash as everybody else,” Breslau said. “So it appears they are more successful than everybody else, and I don’t think that, financially, that is backed up by the merch drops.”
Pivoting away from branded content
Yet 100 Thieves appears to be deprioritizing the partnership and branded content side of its business in 2023. The organization is moving away from its current, more robust partnership approach, which includes custom content and brand integrations, toward more of a traditional sports sponsorship model focused on naming rights and jersey logo slaps, according to two former staffers.
“They’re taking the gas pedal off the whole YouTube content thing because the numbers are just doing very poor recently, so I think they’re focusing way more on esports,” said a fourth former 100 Thieves staffer. “It’s feeling more like a traditional sports company.”
The company acknowledged its financial situation as recently as December 2021, when Robinson told Dexerto that reaching profitability was not 100 Thieves’ top priority. 100 Thieves’ rapid rise, followed by its successive rounds of layoffs, form a cautionary tale about the dark side of the esports industry’s predilection with creator–executives and what happens when the reins aren’t relinquished.
“90 percent of [esports] revenue is in brand sponsorships and activations — and we have so much trouble finding other ways of revenue,” Breslau said. “Considering these are our biggest problems, they are only compounded further by having half of the biggest organizations, by valuation, started by creators that do not have training or experience in these fields.”
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