How Magnus Carlsen is building a business empire like no other chess grandmaster

Carlsen has several private sponsorship agreements, including with Unibet, a sports betting site; Isklar, a Norwegian water company; and Simonsen Vogt Wiig, a Norwegian law firm. But the main vehicle for his business ventures is Play Magnus, a company that he co-founded in 2013, the year he became world champion.

Initially designed as an app that allowed users to mimic Carlsen’s playing style and strength at different ages, Play Magnus has expanded, mostly through acquisitions, to become a company with a dozen subsidiaries. It now includes an online playing site, multiple teaching and training platforms, and digital and book publishing arms.

According to Andreas Thome, Play Magnus’ chief executive, the company has about 250 employees and about 4 million registered users of its products and proprietary learning programs. One year after it went public on the Euronext Growth Oslo stock exchange, Play Magnus now has a market capitalization of about $115 million. It is the only publicly traded chess company in the world.

Magnus Chess, the private entity created when Carlsen was 16 to handle his winnings, owns 9% of Play Magnus, making it the second-largest shareholder. Magnus Chess, in turn, is 85% owned by Carlsen; that makes his personal stake in Play Magnus worth nearly $9 million.

Though Carlsen has no role in the day-to-day operations of the company that bears his name, he has an outsized influence on its strategy. His father sits on the board of directors, and Magnus Carlsen is consulted on major decisions.

Carlsen’s ideas have long had an influence on the company’s acquisition strategy.

“He very much wanted a play zone when we had just the apps,” Henrik Carlsen said. So Magnus pushed for the merger in March 2019 with Chess24, one of the principle playing sites on the internet.

Then, last year, with the pandemic having shut down all in-person tournaments and also having postponed the world championship, the company decided to create its own competitions. Once again, Thome said, Carlsen was brought in to advise.

“We worked with Magnus quite a lot on that,” Thome said. “What could be an interesting concept for engaging more fans around the world? What should be the format?”

Play Magnus organized a series of 10 mostly online tournaments with $1.6 million in prizes. The events featured 44 of the world’s best players, including Carlsen.

The inclusion of top players, including the world champion, allowed the tour to attract sponsors. Among those who signed up were Meltwater, a media intelligence company, for which the tour was renamed; FTX, a cryptocurrency exchange; and Mastercard. Julius Baer, a Swiss wealth management bank, became the main sponsor of a second so-called challengers tour for up-and-coming players.

The Meltwater Tour final was last month, partly held in an esports studio in Oslo, Norway, built by Play Magnus. Unsurprisingly, Carlsen won. He also collected the largest share of the season’s purse — just over $315,000. Wesley So, an American, finished second and pocketed $215,000.

That made the tour created and run by Carlsen’s company financially lucrative for Carlsen, an outcome that Thome insisted was not a problem.

“The fact that Magnus is strongly supporting the tour, playing in the tour, taking it seriously, competing, is making sure that other top players are playing there and is very valuable for the company,” he said. That, he argued, was good for both the company and its shareholders.

In its third-quarter shareholder report, Play Magnus reported that the tour had 115 million live broadcast views and 29 million hours of video watched — putting it on a path, Thome said, to breaking even financially. Nevertheless, the company reported a $5.3 million loss for the third quarter, bringing its 2021 losses to more than $14 million. With cash reserves of nearly $22 million, those losses would seem to be sustainable for now.

Play Magnus already has announced that it will hold another champions tour, with nine tournaments, beginning in February. The company is also creating a regional tour in India.

“Over time,” Thome said, “we would like our Champions Chess Tour to be for chess what the PGA is for golf or what Formula One is for racing.”

Henrik Carlsen, who has been ever-present at his son’s side during his career — part confidante, part support team — acknowledged that being the face of Play Magnus has put added pressure on his son. But he said Magnus has always been able to compartmentalize his commercial and competitive interests.

“Thinking about the commercial consequences when he plays a tournament or even for the world championship is absurd,” Henrik Carlsen said.

His son is favored to retain the world championship when he plays Nepomniachtchi; he is higher ranked than his challenger and has far more match experience. But even if he loses, it may not have a material effect on the financial outlook for his business interests.

“Play Magnus group of companies is highly diversified in terms of our revenue streams,” Thome said. “Some of those streams are more related to Magnus than others, so it is better to have him as world champion. But I think that Magnus has reached a status in the chess world due to his performances over a very long time, which means he will be a legend of the game forever.”