There’s a saying that goes: “You can’t get blood from a stone.” It’s a fitting one for the case of ESL parent company Turtle Entertainment suing Azubu over a breach of contract regarding the two-year partnership between the companies—a deal worth a minimum of $1.5M, the sum ESL charged for its broadcast rights per year.

ESL filed its complaint on Jan. 19, 2017, with the final trial originally scheduled for July 30, 2018. On Dec. 11, 2017, the California Central District Court was informed that the parties have reached a settlement, however.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]Multiple inside sources close to the situation went anonymously on the record, speculating that ESL probably realized that there’s simply no money left with Azubu.[/perfectpullquote]

While the terms of the settlement remain unclear, from the outside, an amicable agreement seems unlikely. The legal skirmishes between ESL and Azubu defendants throughout the year were a steady back and forth, with constant claims and counters. Aside of that, it doesn’t make sense for a company eager to make its first quarterly profit to back down on $1.5M of outstanding debts.

Unfortunately, neither ESL nor Azubu representatives were willing to comment on the situation. The Esports Observer reached out to both parties as early as January, when learning about the settlement of the lawsuit, and multiple times since then, but has not received a response to date.

Multiple inside sources close to the situation went anonymously on the record, however, speculating that ESL probably realized that there’s simply no money left with Azubu. After all, Azubu’s main financier, the controversial German investor Lars Windhorst, had all his assets frozen in July last year—after allegedly reneging on deals to buy almost $70M in securities. It’s been reported in relation to other outstanding debts within the esports sphere, that even Hitbox’ founders and investors—the company Azubu acquired and merged with one year ago to form Smashcast—are still waiting on money.

There’s the other option, though: That Azubu actually paid all or some of the outstanding money.

In February, Windhorst made headlines for snapping up luxury fashion house La Perla, noteworthily from Italian entrepreneur Silvio Scaglia who launched a lawsuit against Windhorst over money owed in financial agreements in 2016. To finance his newest endeavour, Windhorst raised $500Min a bond sale, after a history of using a complex web of finance vehicles before. His new funding vehicle wasn’t only used to buy La Perla, however, but also to settle some of the largest claims against him. Over the last two years, he was involved in legal battles worth at least $220M, mostly around bonds sold out of Sapinda, another investor in Azubu.

[perfectpullquote align=”left” cite=”” link=”” color=”” class=”” size=””]There’s the other option, though: That Azubu actually paid all or some of the outstanding money.[/perfectpullquote]

In other words: there’s a chance that the lawsuit between ESL and Azubu, even if comparatively small, was among those charges Windhorst actually settled. One indicator that supports this thesis is Modern Times Group’s Q4 2017 earnings report. ESL parent company had publicly stated to expect first profits from MTGx —its esports and video content offshoot—by the end of last year, and, in fact, the company reached that goal. The corporate statement reads as follows:

“[…] net sales swelled to SEK 1.26B in the fourth quarter of 2017 from SEK 397M a year earlier. Esports sales rose 68% to SEK 515M in the fourth quarter and reflected the performance of distribution and sponsorships, follow the entry of more broadcasters, telecoms operators, and non-endemic sponsors into esports.”

It’s imaginable that money from an extrajudicial agreement between Azubu and ESL made its way into these figures. Without an official comment from any side, we simply can’t know.

What we know for sure is that esports becoming a real business, with a lot of money on the line, will lead to more of these legal fights. This is a good thing, though. It demonstrates those with ill intentions, who only come in for the quick buck, will feel the sting of legit esports organizations willing to fight back.