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Financial Crisis Forces TSM to Freeze Nearly Half of Its Divisions

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North American esports giants, TSM, is in dire financial shape and could end up halting operations in multiple esports titles.

According to a report from Sports Business Journal, TSM is allegedly planning to halt most of its divisions which are running on significant operational costs and focusing on just a few games. 

One casuaty could be their League of Legends team, which competes in the LOL Championship Series (LCS) North America. Furthermore, there is a possibility that this will affect the other popular games, including Dota 2, Apex Legends, Valorant and Fortnite.

The release of numerous significant members of their League of Legends team has only served to fuel this rumour. Recently, their top laner, Collin ‘Solo’ Earnest, has announced himself as a free agent. Prior to Solo, Chien-Yu ‘Kristine’ Huang (team manager) and Yang ‘Glen’ Po-jen (general manager) have left TSM’s League of Legends team. 

Addresing the rumors, TSM’s CEO, Andy ‘Reginald’ Dinh stated that the company was expanding too quickly and required some ‘budget adjustments’ to ensure business continuity. He has yet to address speculations regarding TSM plans to sell their LCS slot and to quit from LoL competition altogether. Instead, he redirected the matters by revealing TSM’s intention to compete in CS:GO tournament this year, which he claimed would require a significant amount of operational funds compared with other tournaments.

This would be the second-largest division TSM has dissolved if they choose to give up their LCS spot and disband their LoL division. Previously, on February 10, 2023, TSM had announced the disbandment of their R6 Siege division. The news came as a shock, given that TSM had won five major awards and one world championship in the R6 competition.

Financial crisis struck major esports teams

TSM isn’t the only veteran esports team which is looking to freeze their operations due to financial difficulties. Several big teams are also reportedly experiencing a similar crisis, including FaZe and Astralis.

FaZe and Astralis have experienced financial storms over the past year. The value of their shares, which were initially opened at a high price have fallen over the past year.

Just one day after its July 2022 public offer, FaZe shares fell by about 30%. They had improved in August 2022 to a price of 20 dollars a share. But the market has not been kind: FaZe’s share price are worth about 8 cents each today.

 If FaZe’s stock prices cannot stay above $1 in 30 days for the next 3 months, they will most likely be delisted from NASDAQ.

Astralis, the famed European CS:GO team, is likewise seeing a precipitous decrease in its share price. To this day, Astralis’ prices is down to $0.24 and the company are considering delisting and operating the team as a private corporation to reduce losses. Reportedly, they also intend to merge with other businesses and sell their shares to obtain additional funds.

TSM and FaZe have made several plans to increase their profits in the last year. Both have tried a new business model that will attract fans with memberships that run on the web3 model, which allows them to interact in play-to-earn games that provide exclusive prizes. 

The innovation, however, did not run as smoothly as expected. Crypto crashed last year, taking the metaverse and Web3 along with it. The situation worsened when one of the biggest crypto exchange founder and TSM’s major partner, Sam Bankman-Fried, was charged with fraud and money laundering via his exchange platform, FTX.

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