Esports Giant MLG Swings To An Operating Profit On Strength Of Its New Media Strategy

In an interview with onGamers, MLG CEO Sundance DiGiovanni stated that since the release of its recent service, the company has been “EBITA positive and expects to stay EBITA positive on a quarterly basis in 2014.”

TechCrunch covered the launch of and spoke to DiGiovanni in December about its success. He made it plain that the company’s new products were themselves profitable, but it wasn’t clear that the company as a whole was at the level of generating operating profit.

EBITA is distinct from net profit, the standard metric for “profit.” Instead, it represents Earnings Before Interest, Taxes, and Amortization. Still, for MLG to have achieved that specific benchmark is encouraging for the firm, and its investors.

MLG was early to esports — what some prefer to refer to as competitive gaming — and cycled through a number of strategies before settling on a blend of events, original content, and partnered content delivered on its own technology, and supported by its own advertising efforts.

It took $69 million and more than 10 years, but it seems like MLG has managed to build a media conglomerate on top of video game content that is sustainable in its own right at scale.

For the more industry-focused, MLG is promising its hand-selected content partners — think the big name streamers — monetization at rates that are almost confusing [Note: Minor edit for grammar included]:

onGamers: What are the current CPM rates that content providers should be expecting to see?

MLG: Here are the ranges. Typical programming is a $25 CPM. Championship stuff is $45-50. Full-length trailer stuff is $80-90, and we’ve seen things top at $100. Our rate card typically has three or four CPM levels in it, but never for video below $25. It doesn’t mean we’ll never have video below $25 because the direct sold is never going to be 100% all the time, but that’s what we’re tracking towards.

If those rates can be maintained, MLG shouldn’t have much trouble picking up enough talent to continue its viewership growth.

Update: I confirmed with MLG that the final two quarters of 2013 were the first consecutive periods of positive for the company. 

Top Image Credit: MLG