Copenhagen Flames files for bankruptcy

The Danish organization that served as a pipeline for upcoming talent is no more.

Copenhagen Flames has filed for bankruptcy and terminated all of its personnel, bringing an end to the company's seven-year run in esports. The Danish organization boasted a plethora of talent through the years that are now established at the top level, including Rasmus "⁠HooXi⁠" Nielsen, Jakob "⁠jabbi⁠" Nygaard, and René "⁠TeSeS⁠" Madsen, and was a pivotal pipeline for talent in the Danish scene.

The Flames become the second Danish organization to fold in just as many weeks, with the other Danish pipeline of talent, Tricked, also filing for bankruptcy on April 12.

In a statement posted on Copenhagen Flames' website, CEO Steffen Thomsen explained that the decision to file for bankruptcy was made after the organization failed to find funding to sustain operations.

Just two weeks ago, the company announced that it was seeking an investment of 5 million DKK ($740,000 USD) in order to "strengthen the club's financial foundations and initiate a number of initiatives to ensure profitability in 2024 and beyond." That effort, alongside other attempts to find investors and partners, ultimately failed.

"It is no secret that esport clubs have been and are struggling financially and especially the past 6-9 months have been absolutely horrendous for us in terms of securing partnerships of any kind," Thomsen said in his statement.

"Both in terms of extending already existing ones as well as gaining new ones. Marketing budgets are getting slashed by brands in a lot of businesses because of the global financial crisis and so our most important source of income has been reduced in a huge way and we have struggled to close out even smaller partnerships."

The CEO also pointed towards a failure to qualify for the last two CS:GO Majors as a pain point when it comes to securing income, gaining brand recognition, exposure, and player sales; however, he also acknowledged that "you can’t count on results in sports" and that the organization were aware of the risks of this approach.

"We have always been looking to build a club which was independent of sporting income. But to get to that stage you need a solid foundation built from sporting success – at least to some extent.

"We have tried to achieve this goal by creating different income streams like tournament organizing, a talent academy with paying students, team building events for companies, bootcamps for students, selling media production and much more. We wanted to build a sound business. A club which didn’t rely on anyone else’s money. It has always been our most important goal and our mission. We succeeded to some extent when we delivered our first positive annual financial result in 2021, but unfortunately it did not last."

Copenhagen Flames have had a stalwart presence in the tier-two scene for the past handful of years, boasting a plethora of Danish talent which they have been able to sell to other organizations at varying points. Particularly, the team found immense success at PGL Major Stockholm and PGL Major Antwerp, making it to the playoffs of the latter tournament before the roster ultimately fell apart.

Since then, the organization has struggled to field a team that can make it back to the same level, with their recent rosters failing to make the BLAST.tv Paris Major and IEM Rio Major as well as dropping to No. 55 on the HLTV world rankings.

The decline in successful results and Major appearances, combined with the recent economic turmoil that has plagued many other organizations in esports, has left the Flames to die out.

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"It has been an absolutely gut-wrenching, frustrating and deeply sad experience to let go of so many amazing people who have worked tirelessly for us, who are extremely passionate about the club and who would do anything to make things work," Thomsen said in his closing remarks.

"Our staff, players, coaches and management team have been an absolute pleasure to work with and to let go of such a special group of talented and wonderful people just feels extremely disappointing and heartbreaking. We have done everything we could to help secure the entire personnel the best way possible and we will continue to look out for their best interest in the upcoming process.

"I am immensely proud of what we achieved during these past 7 years without ever compromising our values, our mission or our conscience. We never looked for shortcuts or the quick buck. We have treated everyone with respect, honesty and transparency.

"That is what Copenhagen Flames was. Something you can trust, something to aspire to, look up to or want to be part of. That was the vision in 2016 and despite this ending, I know in my heart that we became and were exactly that."