Five of Flashpoint’s founding teams might owe the league 400K

Nick J. March 14, 2020

Early on in Flashpoint’s history, Flashpoint employee and esports personality Duncan Thorin Shields appeared on his shared podcast with esports journalist Richard Lewis to help explain why Flashpoint would succeed. Both Thorin and Cloud9 president Dan Fiden made sure that viewers understood two things “that will 100% be a part of the league,” according to Thorin.

  1. “Teams that are a part of the revenue share buy-in for $2 million dollars.”
  2. “[A Member team] literally gets fined if your team drops out of the rankings.”

Fortunately for Flashpoint, if you own the store, you can make exceptions. Out of Flashpoint’s eight founding teams, five are currently ranked outside of the top 20. 

  • MIBR - #25
  • C0ntact Gaming - #26
  • Cloud9 - #28
  • Dignitas - #42
  • Team Envy - #51

Dignitas and Team Envy are particularly egregious offenders, with last-minute addition Envy not even inside the top fifty teams in the world. While we don’t know when this clause comes into effect, Thorin was abundantly clear. If a member team doesn’t stay ranked inside the top 20, the League entity in Flashpoint will fine teams $100,000. 

Even if the clause doesn’t come into effect until after the first month of play, it might just be impossible for many of these teams to rank into the top 20 by that time. In order to move up the rankings, teams have to win games against better teams. And those better teams are all members of ESL Pro League. Because of scheduling, teams can only compete in one of those two leagues.

With ESL Pro League holding every top-ten team and thirteen out of the top-twenty, it looks like it is going to be an expensive month for Flashpoint’s five founding member teams. Here are the rankings of the remaining Flashpoint teams as of this morning.

  • MAD Lions - #12
  • FunPlus Phoenix - #14
  • Gen.G Esports - #15
  • HAVU Gaming - #30
  • Copenhagen Flames -  #31
  • Orgless - #36
  • Chaos Esports Club - #43

Flashpoint not yet independent, lacks outside commissioner as league starts

B Site, Inc., the company behind Flashpoint, still hasn’t announced an independent CEO for itself or a commissioner its Flashpoint League. There does not seem to be a separate league entity involved, according from what B Site's Securities and Exchange Commission filings show. B Site, Inc. trademarked the name Flashpoint on February 3. It is still in the approval process.

Despite promises that that league was in the process of hiring an independent CEO and League Commissioner separate from its member teams, no announcement regarding the position has yet been made.

Additionally, B Site Inc.’s SEC filing reports show Dan Fiden is currently serving as B Site’s Chief Executive Officer and therefore controls the Flashpoint league in that regard. He holds that title while also serving as the president of founding member team Cloud9. Co-founder and vice-chairman of Gen.G Kent Wakeford is listed as Flashpoint’s Chief Financial Officer. 

Thorin made sure to mention that Flashpoint was looking for independent entities to serve as Flashpoint’s upper management during the podcast, but the league hasn’t announced if they have made any hires to take on those roles. 

Did new Flashpoint league accidentally break SEC rules?

Additionally, Thorin’s open invitation for any and all teams to come join Flashpoint might have been a violation of B Site Inc.’s securities filings with the SEC. Currently, Flashpoint is exempt from having to report who its investors are under an exemption called Rule 506(b). In other words, as long as B Site follows certain rules, they are exempt from revealing who does and does not have ownership of the league along with how much of that ownership they have.

One of the rules is that the company cannot advertise “generally.” Essentially, offering equity or securities to friends, family, and business acquaintances is fine, but a billboard advertising them is not. 

“Under Rule 506(b), a “safe harbor” under Section 4(a)(2) of the Securities Act, a company can be assured it is within the Section 4(a)(2) exemption by satisfying certain requirements, including the following:

  • The company cannot use general solicitation or advertising to market the securities.”

With Thorin’s Twitter video offering teams increased money to come to Flashpoint’s open qualifiers or join its member teams, he may have crossed the line and broken the rule, subjecting B Site, Inc. to potential fines. 

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