DarkZero Esports respond to conflict of interest concerns after Dexerto found documents revealing they’ve invested in merchandise company Raven.
Despite declaring themselves as partners in the public domain, it has not been announced publicly that DarkZero had acquired an ownership stake in the merchandise company until now.
DarkZero compete in Rainbow Six Siege, recently placing first in the North American Six August Major and Season 1, Stage 2 of the North American League — results that arguably position the team as the best in their region.
Raven produces and sells merchandise for partner teams Excel Esports, Rogue, Spacestation Gaming, and Tribe Gaming. DarkZero are also listed as a partner on their website.
On April 27, Raven published on their site that they had raised $1.4m in a seed funding round with a “US-based private equity fund.” The fund’s identity was not revealed in the blog post, nor had there been any public declaration of ownership beyond company records on Companies House — the United Kingdom’s official registrar.
You had to have purposefully gone seeking these documents to find DarkZero’s involvement in Raven.
In a confirmation statement published to Companies House dated July 22, it’s revealed that DarkZero Esports LLC owns 6666 ordinary shares in the company. Raven’s managing director Samuel Wells owns 8500 ordinary shares, making the North American team the second-largest shareholder.
Other shareholders include Adam Cooper and Robert Loveday, Raven personnel who both hold 750 ordinary shares each. DarkZero’s CEO Zach Matula and director of operations Robert Stamey were both appointed as directors of Raven on April 24, according to documents.
Conflict of interest?
Dexerto contacted Wells to ask why DarkZero’s position in Raven had not been declared in the initial announcement, nor on social media or their website. He replied: “As long-term partners, DZ took a minority share in Raven to grow their ecosystem as an esports organisation which in turn allows Raven to grow and expand as an endemic esports apparel brand. All information is readily available in the company registrar.”
There is nothing inherently wrong with DarkZero not declaring their ownership interest in Raven, but it raises conflict of interest concerns such as them gaining access to information about Raven’s partner orgs that they otherwise wouldn’t be privy to. DarkZero and Raven partner Spacestation Gaming both compete in North American Rainbow Six Siege, for example.
— Raven (@RavenGG) September 11, 2020
DarkZero’s Matula responded to Dexerto’s request for comment on the investment, why it had not been announced to their fans, and conflict of interest concerns.
“DarkZero has a minority financial interest in Raven and this has never been something that we have attempted to conceal and is even a matter of public record,” he said. “If the investment is of interest to the public we would be thrilled to have Dexerto readers be aware that DarkZero is proud to have invested in the most innovative esports apparel brand in the world!”
People having ownership stakes in multiple companies is nothing new and there have been plenty of concerns voiced surrounding conflicts of interest — even in esports.
Examples include OpTic Gaming founder Hector Rodriguez used to be a shareholder in Dexerto and was declared as such in relevant articles, ESPN covers esports and their owners, Disney, are also investors in Team Liquid’s parent company aXiomatic, and Valve has had to issue multiple orders to resolve such conflicts in Counter-Strike. Earlier this October, it was unearthed that the CEO of Better Collective, the parent company of CS:GO news site HLTV, is also a co-owner of Astralis.