The People Who Acquired Football Outsiders Are Screwing The People Who Built It
2:51 PM EDT on April 27, 2023
In mid-April, a Canadian sports media company called Champion Gaming published a triumphant press release touting the success of its product, the football analytics website Football Outsiders.
“In 2022 Football Outsiders hit over 2 million new users for the first time in the publication's history, and logged over 6,000 active subscribers, an increase of over 32% from the same time last year,” the press release said.
From the optimistic tone of the corporate missive—CEO Graham Simmonds offered a sunny quote, saying that Football Outsiders was “extending the brand's footprint with football fans” by offering new resources, like more sports betting content, in order to “continue our growth trajectory”—a reader would have no idea that the company is, in fact, in serious financial trouble.
Most troublingly, Champion Gaming has been refusing for months to pay a group of freelance writers thousands of dollars for their work, work that directly contributed to Football Outsiders' strong year. The timing of the press release stung these writers, as the company was touting the value of their work out of one side of its mouth while claiming financial hardship and refusing to pay them out of the other. “The absolute. Fucking. Gall,” wrote Football Outsiders contributor Bryan Knowles in a tweet responding to the press release.
Champion Gaming’s inability to meet its financial obligations doesn’t end there. Champion Gaming has been consistently late paying staffers, borrowed money at what one financial expert called a “usurious” rate, and has seen its service agreement with TriNet, a payroll and benefits provider, abruptly terminated, leaving employees unsure of the status of their health insurance. Defector spoke to multiple contractors and current employees, reviewed internal company documents, and examined publicly available financial filings in order to piece together a picture of a company with significant debt and a trickle of revenue, and a shaky business plan that seems to revolve mostly around the buzzwords of the day. Champion Gaming describes itself as a “data and analytics company that provides predictive and prescriptive analytical models and win probability applications and statistics in the sports industry for teams, media, fans, and bettors.” What that business model actually looks like in practice isn’t so clear, even to those who do work for the company.
“We don't know what else Champion Gaming is really besides Football Outsiders,” Jackson Roberts, who joined Football Outsiders as a contributor in August, told Defector. “Their whole site is basically just, Here's what Football Outsiders is and we own it. So if Football Outsiders is having a record year and they're still struggling so much, what else is going on?”
Whatever Champion Gaming is trying to do, it doesn’t seem to be working, and its stumbles towards sustainability are now threatening a beloved and formerly independent publication.
In early April, just weeks before Champion Gaming sent out its cheery press release, a group of four writers who had not been paid by the company went public with the issue.
“Champion Gaming, the parent company for Football Outsiders, is refusing to pay the site's contributors the money they have earned. Many of us have not been paid since December, with thousands of dollars in unpaid invoices piling up,” read an April 3 public statement signed by four Football Outsiders contributors—Bryan Knowles, Cale Clinton, Tom Strachan, and Roberts. “Despite repeated pleas to CEO Graham Simmonds and CFO Cam Wickham, and despite a written contract establishing clear rules and timing for payment, there has been no movement on this front. Dozens of articles, representing hundreds of hours of work, remain published and unpaid.”
The statement went on to say that the writers would stop working until they were paid: “We cannot and will not continue to be exploited or treated as expendable.” Despite an outpouring of support online, they received no response from the company.
On April 17, just one day before the company’s press release was published, the same group of unpaid workers released an updated statement. They had still not been paid. They hadn’t been contacted at all by Champion Gaming. The statement said that the workers had begun to explore legal options to recoup their wages and had signed contracts with another football website, Underdog Fantasy, in order to make money in the meantime.
During a call with Defector in late April, Knowles, Clinton, and Roberts explained that the company’s silence left them with few options, and they sought legal advice from the National Writers Union.
“From a financial point of view, Football Outsiders […] has been my primary source of income for seven and a half years,” Knowles told Defector. “I'm hopeful that something on official letterhead will actually cause something to happen, but if they don't pay us, we're gonna have to go through with [legal action].”
Simmonds and Champion Gaming’s Chief Financial Officer, Cameron Wickham, did not respond to multiple emails and calls requesting interviews and seeking comment. Similarly, Champion Gaming co-founder and vice chairman of the board, former president of HBO Sports Ken Hershman, did not respond to multiple requests for comment. In fact, Champion has been silent on the issue apart from a statement it issued to the website Outkick in early April, saying the company had a “difficult year financially” and that it was “working towards a resolution.”
“Management is working on an impending financing to catch up with all the outstanding funds owing to contributors and other consultants. To be clear: Champion is not refusing to pay anyone,” the statement claimed. “Management is working towards a resolution and the editorial management at FO is aware of the difficult situation.”
Football Outsiders was founded in 2003 by Aaron Schatz. What began as his passion project grew into a fully fledged website for advanced football analytics and statistics such as DVOA (Defense-adjusted Value Over Average). Football Outsiders went on to strike partnerships with ESPN and became a popular source for hardcore football nerds and casual fans alike. In 2018, Schatz sold Football Outsiders to a company called EdjSports. He stayed on as editor-in-chief, and, according to longtime Football Outsiders writer Mike Tanier, the site continued to operate as normal.
Then, in September 2021, Champion Gaming, co-founded by Simmonds and Hershman, entered the picture. It acquired EdjSports, and Football Outsiders along with it, in late 2021 as part of a “reverse takeover,” a way for private companies to go public quickly without having to go through an Initial Public Offering. As part of the deal, Champion Gaming merged with a shell company called Prime City One Capital. According to a news report from the time, "the group closed a funding round of $3.65 million (CAD $4.62 million), giving it a roughly $12.3 million post-money valuation, and it is on track to begin trading in a few weeks.”
Champion Gaming had ambitions to expand beyond NFL coverage. It struck a licensing deal with Inpredictable, an NBA analytics website run by Mike Beuoy, and partnered with SharpRank, a sports betting resource. The terms and status of these partnerships are unclear; Beuoy and SharpRank did not respond to queries. Champion Gaming also brought on Chris Spagnuolo to oversee content (for a particular microgeneration of sports media consumers, Spagnuolo is best known as the guy who left Barstool Sports after writing a blog calling Rihanna fat), and hired ESPN’s Katie George to be a brand ambassador and create video content. Spagnuolo declined to comment. Defector was not able to reach George for comment.
By the summer after the takeover, changes at the top of the company were underway. In June 2022, Simmonds took over from Hershman as CEO; Wickham took over as CFO; and the company’s president, Chief Innovation Officer, and director all resigned. The company framed the changes as an exciting new chapter. Of Simmonds’s ascent to CEO, Hershman said in a press release, “Given his previous experience as a public markets CEO and his extensive background in online gambling, the board of directors and I determined that his leadership of the Company would be both ideal and appropriate to steer us going forward as we build a leading sports content and data intelligence business.”
But by the fall there were signs that the company was floundering. According to financial documents filed in November 2022, which are publicly available through Sedar, Canada’s securities filing system, the company had little cash flow and was carrying significant debt, especially relative to its revenues. In the first nine months of 2022, Champion Gaming reported $969,789 in revenue and $5,619,803 in losses. (All monetary figures cited in the filings are in CAD.) As of Sept. 30, 2022, the entire company had only $55,776 in cash, with even less coming in. As of the same date, the accounts receivable, meaning revenue the company accrued, but which they still needed to be paid, was only $13,911. On page six of the same filing, the company wrote: “These material uncertainties cast significant doubt as to the Company’s ability to continue as a going concern.”
The company’s main form of cash flow came from issuing equity and borrowing money. In October 2022, Champion Gaming raised $750,000 by issuing 10,000,000 shares. In November, it raised $307,500 by issuing 4,100,000 shares. In September 2021, the company had 3.1m shares outstanding; a year later that jumped to 67.0m—without raising substantial cash. In January, the company borrowed $300,000 at a 20 percent interest rate, plus free stock. One financial analyst, who requested anonymity to speak candidly about the company's financials, told Defector it looked like Champion Gaming was a “shoestring operation” that raised money by “borrowing at usurious rates,” offering “highly dilutive equity rounds.”
The fall of 2022 was also when Football Outsiders workers started to notice more delays in getting paid.
“Champion has never paid an invoice on time,” Knowles said. “But when they’re consistently two months late, you could plan on it. It was the end of the 2022 season when things really started getting pushed and we had to keep reminding them to actually get us paid.”
“My November invoice was paid on January 20,” Clinton said, noting that he too was used to being paid on a long delay. But by mid-February, he had yet to be paid for December’s work. “It wasn’t until March 20 when I sent Aaron an email like, Hey this is getting ridiculous. Aaron told me Bryan was having a similar problem.”
By the spring, full-time staffers were starting to have issues with the company as well. On April 13, employees received a letter from TriNet, a professional employer organization contracted by Champion Gaming to manage its employees’ health insurance, stating that TriNet’s service agreement with Champion Gaming had been terminated. The TriNet letter, obtained by Defector, instructed employees about next steps for accessing health insurance, tax information, and other benefits.
“It threw everyone into turmoil,” Tanier said, adding that the company didn’t initially respond to employee questions about what this would mean for them and their families.
In a meeting on Wednesday, April 26, nearly two weeks after employees received the TriNet letter, Champion Gaming told staffers they would be getting their health insurance through COBRA, a law that allows employees who lose health insurance, usually due to layoffs, to continue their coverage. Tanier, who attended the meeting, said Champion Gaming claimed it would "reimburse" employees for the employer's share of the coverage. Tanier said he asked Champion Gaming administrator Patti Birk if "reimburse" meant that Champion Gaming would pay the COBRA cost as part of payroll, or if employees would pay out of pocket and then hope Champion Gaming would send a check to cover it. According to Tanier, Birk responded, "I hope not." Birk did not respond to an email from Defector.
In its April statement to Outkick, Champion Gaming explained that it had “inherited some significant debt and liabilities,” and that, as a result, “senior management has forgone salaries since joining the Company and have been working diligently to manage the Company through these difficult times.” It’s unclear exactly which senior managers are forgoing pay.
Employees are frustrated by Champion Gaming’s mismanagement and fearful about what it could mean for a successful website that’s been a key source of football analytics for decades. Multiple people who spoke with Defector said the past few months have been gut-wrenching.
“It's just really disheartening to see this niche, special interest, really passionate sports blog that blossomed into a pretty influential sports analytics company, just get sucked dry so quickly,” Clinton said.
Across the board, Football Outsider writers and contributors emphasized their loyalty to the site’s founder, Aaron Schatz, and stressed that he is in a difficult position.
"Aaron Schatz gave me my first real shot in this industry. I was a school teacher, stringing anonymously, and Football Outsiders gave me my first byline. I am one of many who owe my career not just to Aaron Schatz but to Football Outsiders. It’s a platform that allows you to be analytical and discursive and funny,” Tanier said. “To see what’s happening now is painful.”
For his part, Schatz said, “It's been tough the last few months, no question. I'm proud of the great staff we've put together at Football Outsiders and I look forward to getting this all resolved so we can return to putting out good football content.”
It’s not clear what shape this resolution might take. Simmonds and Wickham did not respond to questions about the challenges of trying to get a sports betting media concern off the ground in this competitive market, though multiple sources said company execs have been teasing an acquisition deal that would supposedly put the company on more solid financial footing. Simmons and Wickham also didn’t respond to questions about how they saw Football Outsiders fitting into this vision. For the people who made the site what it is, though, that’s top of mind.
“We were fans before we were writers,” Knowles said. “This is something that we care about being destroyed.”
Correction: An earlier version of this article stated that Chris Spagnuolo was fired from Barstool Sports after writing a blog in which he called Rihanna fat. Spagnuolo clarified that he left by his "own choice due to how they handled that situation."
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