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Report: Activision buying out MLG

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Notice to shareholders describes a $46 million deal

Activision Blizzard will buy out Major League Gaming and effectively close down the esports company, according to documents obtained and posted by Esports Observer on Friday.

The rumored deal, which neither Activision nor MLG have commented on, is a $46 million cash transaction. Activision Blizzard will acquire a majority of MLG's assets, with the remainder to be mothballed in a holding company now led by the former chief financial officer of MLG. MLG co-founder and CEO Sundance DiGiovanni is out.

A phone message for DiGiovanni was not immediately returned. Polygon also reached out to other representatives of both MLG and Activision Blizzard and will update this post with any comment they make.

Esports Observer reports that the deal was approved Dec. 21 by those who hold the majority of MLG's outstanding stock, which is a collection of investment companies. Other stockholders were not aware of the deal and had no say in it; they were notified Dec. 22 of the deal.

No official announcement has been made yet and it's possible the purchase agreement sent to shareholders is a draft.

In October, Mike Sepso, the other MLG co-founder, joined Activision as the vice president of its new esports division. Activision also hired Steve Bornstein, the former ESPN, ABC and NFL Network chief executive, to run the new esports operations.

MLG, founded in 2002, is one of the oldest companies in what is still a relatively new field. In October, the Call of Duty World League's Pro Division left MLG for rival Electronic Sports League, ending an eight-year run with MLG. Last year MLG made several attempts to refinance more than $6 million in outstanding debt.

MLG.tv, a premium streaming service that launched in 2013, is the largest dedicated esports network. MLG opened MLG.tv Arena in Columbus, Ohio in 2014, and it is the site of upcoming championships for Counter-Strike: Global Offensive and Halo over the next three months. It's unknown how this rumored sale might affect those events.