The publicly described “near collapse” of Azubu in 2016 was caused by their non-traditional sources of income, according to a report in the Los Angeles Times.
Streaming company Azubu has been plagued by issues since its inception. Allegedly stemming from a “drip-fed funds” tactic employed by sponsor Sapinda Group, Azubu suffered from their sponsor inconsistently paying “$1 million or so a month” to the company instead of the funds requested.
The Los Angeles Times leaked reported plans by Azubu to buy out Austrian rival service Hitbox for “tens of millions of dollars in cash” — a curious business move given the company’s history of inconsistent funding and failed ventures. Unable to pay the rights fee for League of Legends last year, Azubu lost major investments when many of their paid streamers left for other streaming platforms.
In the report, unnamed esports business leaders said it was unlikely Azubu would be able to compete with services like YouTube or Twitch.
“There were too many letdowns, and not enough wins,” said a former employee on maintaining industry relationships. “You don’t get many second chances in e-sports, and we were trying for third chances.” This followed Azubu’s delayed promised divestment in Esportspedia, among other public relations conflicts.
New Azubu CEO Mike McGarvey has allegedly downsized the company from 75 employees to 50 and cut expenses in half, leaving spending roughly $200,000 more than Sapinda Group had been previously drip-feeding Azubu.
In an effort to reset, Azubu plans to relocate within Los Angeles and unveil a new moneymaking plan with a focus on advertising. Azubu has yet to announce their acquisition of Hitbox or financial changes planned for 2017.