As if it were Mario dodging a barrage of shells while needing to stay on course, it’s been a busy month for The Gaming Stadium (TGS) across the newswire.

On February 18, TGS announced a non-binding letter of intent pertaining to a potential business combination. The result would be a reverse takeover of TGS by the shareholders of a new company: MediaCo. “The final structure and terms of the transaction have not yet been finalized, and remain subject to conditions including due diligence of the parties and receipt by the parties of tax, corporate, and securities law advice,” reads the release.

Then on March 16, TGS issued a non-update update that “TGS and MediaCo continue to conduct due diligence and work towards the establishment of a definitive structure with respect to the transaction.” It all sounded a bit vague. So we caught up with CEO Spiro Khouri to get the context on what’s next for the local esports entity. 

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Plug in the game console and set out the controllers

Khouri summarizes that TGS came across the radar of a pair of US-based organizations (who are to remain confidential)—a travel company and an intermediate entertainment company—who are looking to partner with an esports organization. They would then create a new entity and list that new entity public. Khouri and co. had been talking to them for a while and ended up coming to an agreement—that non-binding letter of intent announced February 18.

Ready player 1

The first player in this is, of course, TGS. They’ll be on the receiving end of a $1 million dollar loan. “As a company, we had planned to go to market and potentially do a raise around this time. This deal kind of threw a wrench in the plans that we had. We're growing like crazy. We need support at that scale. They basically said, ‘Okay, well, what we'll do is we'll advance you some of the money that's going to be coming anyway and allow you guys to fund the scale that you need short term,’” Khouri says.

Multiplayer mode

That brings us to MediaCo. TGS and the two U.S. organizations would potentially merge together if a deal were to be set. “Each business unit will continue to operate as it does, but there's also going to be a ton of cross-pollination between us three,” Khouri tells me over Zoom. If that deal is completed, he says that they will re-list the company like a new business.

Cross console integration

TGS first opened its doors in June of 2019. Khouri describes the company at the time as “basically a community centre for gamers.” The goal was to build a bunch of these centres across Canada and then the U.S. But COVID hit, shifting the model that it had built. 

“We had to restructure. We started to go into digital tournaments. It was a huge boon to our business—it changed everything for us. That necessity bred an amazing opportunity. Now that things are kind of coming back online, we're also getting back into the live event space,” he says. TGS is now thriving as a virtual and in-person entity. 

Next year’s game

As he looks ahead, Khouri notes that his relatively small team is thrilled. “We’ve built this company off of some amazing investors and partners, but also a lot of long hours and hard work. I think any startup is probably similar in that respect and we're constantly looking to grow and scale,” he points out.

He continues by saying this deal would bring a few things into the TGS fray. The first is scalability. TGS would be a partner with two more organizations meaning a combined revenue effort rather than one solo breadwinner. The second aspect is support. A merged, public company would pool accounting and legal teams, something Khouri said “would relieve some of the stress” on both him and the team. This is something that’s all too real for TGS, after all, as the company had to cease trading for a period last fall. 

Still, the most vital part of this proposed deal for him is access to additional capital. “I think any startup or any company would say that,” he says. TGS will continue to grow and scale, spurred on in their quest to become an esports juggernaut.

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