Astralis Sells LEC Spot to Karmine Corp

A Glimpse into the Past

Astralis first put its spot in the European League of Legends league up for sale in 2022. Despite the organization’s hefty asking price of between USD 40 and USD 50 million, no deal was finalized. Notable teams that showed interest in the 2022 sale included the renowned French organization Karmine Corp and the Spanish esports entity Giants. Both these organizations have a commendable rapport with Riot Games, the developer and overseer of the league, as evident from their spots in VCT EMEA, the European Valorant league.

The LEC Landscape

The LEC has witnessed some significant changes between 2022 and 2023. Misfits Gaming and Rogue, two prominent names, exited the league. While Misfits sold their slot to Team Heretics, Rogue formed an alliance with KOI, which acquired the majority share of Rogue’s LEC slot.

The Current Deal

Karmine Corp made the acquisition by purchasing 66.67% of a newly established subsidiary, AK-Game SAS, for DKK 129 million (ca. USD 18.4). Despite this major transaction, Astralis will continue to hold a minority stake in the League of Legends franchise slot.

Furthermore, Astralis has clarified that the current agreement includes provisions that would allow the Danish organization to initiate additional share transfers if they wish. This could potentially lead to Karmine Corp owning 100% of the AK-Game SAS shares by 2031.

Following this acquisition, Karmine Corp will compete in the LEC under its distinct branding. While their French regional league (LFL) team will remain in the competition, it will now serve as an Academy team.

The subsidiary that holds the slot has been valued by Astralis at DKK 194m (ca. USD 27.8). As a direct consequence of this transaction, the LEC announced that all players from Astralis will become free agents at the onset of the upcoming offseason.

Financial Implications

The anticipated net gain from the 2023 sale is DKK 153 million, with an expected cumulative cash flow effect from 2023-2025 of DKK 112 million. The sale’s completion is contingent on several conditions, all of which are anticipated to be met soon. The LEC slot transfer is slated for November 2023.

A Word from the CEO

Anders Hørsholt, CEO of Astralis, expressed his sentiments on the decision. He praised the LEC for its professionalism and acknowledged Astralis’s growth since joining in 2019. He emphasized the company’s responsibility to evaluate the benefits of a sale against retaining rights, especially when an asset’s value surges. Hørsholt thanked the fans, partners, and everyone associated with their LEC journey and expressed optimism for the future.

Guidance for 2023

Post the LEC slot sale, the 2023 guidance has been revised. The net revenue is now projected between DKK 70 million and DKK 75 million. The EBITDA forecast ranges from DKK 150 million to DKK 155 million, inclusive of the LEC slot sale gain of DKK 153 million.

Astralis’s Legacy and Future

Astralis, which rebranded from Origen in 2020, has been a pivotal part of the LEC. Maximilian Peter Schmidt, Director of League of Legends Esports EMEA at Riot Games, lauded Astralis for its contributions and expressed excitement for Karmine Corp’s entry, highlighting the organization’s strong brand and dedicated fanbase.

Image source: LoL Esports Photo via Flickr, CC BY-NC-ND 2.0 DEED