A number of the esports industry’s biggest names were approved for Paycheck Protection Program loans from the US Government that were being offered to businesses struggling during the coronavirus pandemic.
First reported by Hollywood Reporter and ESPN’s Jacob Wolf, a data set of thousands of US companies that applied for PPP loans revealed nearly a dozen big esports organisations or parent companies were approved for loans of various sizes. The data – which was released by the US Small Business Administration on June 6 – shows that the two biggest loans approved to esports organisations were to FaZe Clan and Envy Gaming Inc (Team Envy, Dallas Fuel, Dallas Empire). While the data doesn’t give an exact amount that teams applied for, it does disclose a range, and FaZe and Envy were approved for a loan somewhere in the region of $1-2 million.
These PPP loans are designed to keep business afloat during the restrictions of the coronavirus pandemic and are fully forgiven (don’t have to be paid back) if they are spent on operational costs such as staff salaries and the company can retain over 75% of its pre-pandemic salary cost. If spent correctly, it is essentially free money from the US government to help businesses in need.
Including Envy and FaZe, the majority of organisations applying for loans were those with teams in the franchised Overwatch League and Call of Duty League. ESPN’s report goes on to identify a further six organisations with teams in OWL or CDL listed as having loans approved.
- ESXL (New York Excelsior and New York Subliners) – $350,000 to $1 million loan
- Hard Carry Gaming (NRG Esports, San Francisco Shock, and Chicago Huntsmen) – $350,000 to $1 million loan
- DM-Esports and c0ntact Gaming (Paris Eternal and Paris Legion) – two $150,000 to $350,000 loans
- ReKT Global (Rogue and London Royal Ravens) – $150,000 to $350,000 loan
- Surge Esports (part of Enthusiast Gaming and owners of Seattle Surge) – $150,000 to $350,000 loan
Other notable organisations who do not operate in OWL or CDL include eUnited and Sentinels (under the name P1 Esports), who both took out loans worth $150,000 – $350,000.
Eight organizations with ownership stakes in 13 @overwatchleague and @CODLeague teams were approved for @SBAgov PPP loans ranging from $150,000 to $2 million, including @Envy, @FaZeClan, @MisfitsGG and @NRGgg, new @USTreasury docs show.
— Jacob Wolf (@JacobWolf) July 7, 2020
While the data only shows if a company applied and was approved for a PPP loan, it does not confirm whether they eventually accepted the loan payment and took the money. However, Sentinels, eUnited, and Envy Gaming Inc have all confirmed that they received a loan within the ranges shown on the data set.
“Envy Gaming did apply for and receive a loan through the PPP,” an Envy spokesperson confirms to both The Loadout and ESPN. “The amount received was among the lower end of the range listed. The loss of live events due to COVID-19 was a major change to Envy’s 2020 business strategy, going from an expected seven events hosted in North Texas to only the single event. The money received through PPP was used for its intended purposes, primarily to help pay for fixed costs of operation such as salaries of those in the organisation.”
The other organisations involved in OWL and CDL are yet to respond.
With these loans set aside specifically for small businesses that have been dramatically affected by the coronavirus pandemic, many were surprised to see big names in esports apply for and receive them considering the industry has continued to operate in an online format.
However, the fact that the majority of those applying were owners of teams in Activision’s franchised esports leagues seems to suggest that the impact of having to cancel the scheduled homestand events in both OWL and CDL is what has led to them applying for PPP loans. This is also confirmed in Envy’s statement.