Copenhagen Flames files for bankruptcy

Dear Flames fans, partners and anyone who has ever supported us in any way. Last week, on Friday, I filed for the bankruptcy of Copenhagen Flames and terminated all personnel, as we have been unable to find funding for our club going forward. For the past 6 months we have worked tirelessly to avoid this outcome but unfortunately we have failed. And for that I am deeply sorry. In the end it is my responsibility and I feel like absolute shit that it has come to this.

I have gone through our decision making the past years and I struggle to pinpoint exactly what we did wrong. Following our Major participation in 2021 and 2022 our club had great momentum and we felt that we finally were in a place where we didn’t have to fear for our financial stability and where we even had to turn down work as we simply had too much to do. The summer of 2022 was probably the first time in the 7 years since our founding where we didn’t constantly worry about financial issues. Before this it has been a constant worry, challenge and a motivational factor. We have always been on the edge because we continuously invested the money we earned back into the business.

We always knew that there were risks involved with this approach. At some point we wanted to be able to compete with the biggest clubs in the world; therefore we had to take calculated risks. This meant using all of our income in order to advance our business and revenue streams, instead of halting development and being more secure. If we someday wanted to secure the large partnerships that we needed to compete at the biggest tournaments like the Major regularly, then we had to be bold. We built the club slowly, day by day, year by year via this approach and with that goal in mind. On the edge financially, but with a plan and strategy for how to get away from that edge.

It is no secret that esport clubs have been and are struggling financially and especially the past 6-9 months have been absolutely horrendous for us in terms of securing partnerships of any kind. Both in terms of extending already existing ones as well as gaining new ones. Marketing budgets are getting slashed by brands in a lot of businesses because of the global financial crisis and so our most important source of income has been reduced in a huge way and we have struggled to close out even smaller partnerships. Missing out on the past two Majors hurt us as well as we set a goal of going to at least one Major each year. To secure income but also for the brand recognition, exposure, player sales and the gains in followers across all social media platforms. And again we know the risk of this approach, you can’t count on results in sports and we have always been looking to build a club which was independent of sporting income. But to get to that stage you need a solid foundation built from sporting success – at least to some extent.

We have tried to achieve this goal by creating different income streams like tournament organizing, a talent academy with paying students, team building events for companies, bootcamps for students, selling media production and much more. We wanted to build a sound business. A club which didn’t rely on anyone else’s money. It has always been our most important goal and our mission. We succeeded to some extent when we delivered our first positive annual financial result in 2021, but unfortunately it did not last.

With the financial crisis and the way it affected us already at the end of last year, we started looking into how to reduce our spending. We cut the Fortnite roster and personnel on the 1st of January while analyzing all spending. We ramped up our search for partners and began investor talks early this year. We discussed different scenarios of reducing costs even further both internally and with potential investors and did pretty much everything to get a plan in place that would help us fund the club for another year. Throughout this process investors have been interested in the club, but have been put off by how the esports scene has developed the past year. Clubs cutting costs, terminating personnel, investors having to cover losses and so on. And of course the fact that we needed money straight away wasn’t exactly attractive. Sadly we were denied time and time again and failed to secure the funds needed to save the club.

And so we stand here today having filed for bankruptcy. Copenhagen Flames is no more. It has been an absolutely gut-wrenching, frustrating and deeply sad experience to let go of so many amazing people who have worked tirelessly for us, who are extremely passionate about the club and who would do anything to make things work. This has been one of the worst experiences in my and my co-owner, Michal’s, lives. Our staff, players, coaches and management team have been an absolute pleasure to work with and to let go of such a special group of talented and wonderful people just feels extremely disappointing and heartbreaking.

We have done everything we could to help secure the entire personnel the best way possible and we will continue to look out for their best interest in the upcoming process.

Thank you to all partners, fans and followers for your support. It has meant the world to us and without it we wouldn’t have been able to reach the heights we did. Thank you to all former staff of any kind for your immense contribution. It gave me great joy when some of you returned to work with us again, and to watch you grow in other places. The Flames family is special and something I will treasure forever.

Iam immensely proud of what we achieved during these past 7 years without ever compromising our values, our mission or our conscience. We never looked for shortcuts or the quick buck. We have treated everyone with respect, honesty and transparency.

That is what Copenhagen Flames was. Something you can trust, something to aspire to, look up to or want to be part of. That was the vision in 2016 and despite this ending, I know in my heart that we became and were exactly that.

#BringTheFlames

Steffen Thomsen, CEO at Copenhagen Flames