Denial Co-Owner Zach Smith Accused Of Withholding Payment
Former CEO of Denial Esports, Zachary Smith, is under fire this week as numerous allegations have been made public regarding player payments. During the course of our investigation into Smith and Denial Esports, Hotspawn has acquired evidence that spotlights Smith’s suspicious business practices.
Hotspawn has acquired private messages between Smith and players which displays how the CEO dodged questions regarding salary and player visas. Several sources have come forward shedding light on Smith’s intentions and how he repeatedly took advantage of players. Private messages show that Smith signed teams with language barriers or visa issues, and manipulated them into signing contracts declaring they would receive no salaries.
Denial Esports was founded in 2013 by Robby Rignalda. The team would go on to win the Call of Duty 2015 World Championship, which helped propel the organization to new heights within the industry. Denial closed their doors in 2017 due to payment issues involving staff and players.
The tarnished brand was revived by Smith after he purchased Rignalda’s equity in Denial and assumed all of the company’s previous debts. It soon became public that Smith did, indeed, pay back some players the money they were owed. Would Smith successfully flip a new leaf for Denial Esports?
Acquisitions and Transfers
Smith and his board soon began to acquire teams in PlayerUnknown’s Battlegrounds, CS:GO, Call of Duty, and Gears of War.
Smith signed four PUBG players and a coach to compete in the National PlayerUnknown’s BattleGrounds League, making the official announcement on January 7, 2019. A combination of Gears of War players from Echo Fox and Ghost Gaming were signed by Denial Esports and announced on January 10, 2019. Smith acquired the South African Bravado Gaming CS:GO squad on January 28, 2019 and also acquired the Call of Duty World League slot from OverTime Esports at the end of January.
Denial’s list of competitive teams was impressive, especially since all of the squads were signed and competing within a month and a half of the company starting up again. Denial’s Gears of War roster placed second at the Gears of War Pro Circuit in Mexico City in February 2019, their PUBG roster qualified for the new pro league, and all of the other teams seemed to be holding their own. The Denial ship seemed to be righted and running on course.
Public Relations Nightmare
In February 2019, we began to see the first cracks in the revitalized Denial Esports organization. Two Twitter videos were posted featuring Denial’s CEO, Smith.
In the first, Smith said, “All the nerds are mad that I said f*****. I didn’t say f***** in a negative connotation towards gays, I said it because he was being a f*****.” The seemingly angry Smith continued on with, “It’s the same as being a b****.”
The other video features a disgruntled Smith sitting on a chair and talking to his camera. We are not sure who he is addressing, but the short clip includes him saying “If anybody has a f****** issue, come see me. I am six foot four, fully f****** tatted, and I will smack the f*** out [of] you, boy.”
On March 25, 2019, Smith made a statement on Twitter apologizing for his remarks:
Horror stories began to emerge from people who were previously or currently involved with Smith and Denial, and they told a scary tale.
Jason Seruly, who now calls himself a “concerned fan,” but was originally involved with Smith’s efforts in Halo in 2016, came forward to shed some light on the view that Smith paid the debts to Denial players and staff from Rignalda’s tenure.
Jason Seruly alleges that “They [New Denial Board] assumed Denial Esports’ debt from Robby, took Robby’s holding in Denial, and paid the owed players settlements – Not the full amounts. It’s all smoke and mirrors.”
No previous players or staff who are owed by Denial Esports under Rignalda’s control responded for comment.
“Nothing personal, it’s just business”
On May 13, 2019 ex-Denial Call of Duty player Nathan “nxtshay” Dupuis posted a Twitlonger accusing Denial of not paying player salaries, failing to deliver on player visas and neglecting to pay OverTime esports for the player and CWL slot acquisition.
We reached out to Dupuis and Ryan ‘Zeek” Lapierre, and they were able to provide an inside look.
According to messages acquired by Hotspawn, Lapierre sent a Twitter direct message to Smith on April 22, 2019 asking about his visa. Lapierre’s messages were consistently dodged by Smith with excuses ranging from flight layovers to a busy schedule. Ryan Lapierre did not receive an answer on his or his team’s visas until April 25.
Lapierre asked Smith about a call that Dupuis had with Smith on April 24, and Smith replied with “Not true. I don’t think he [Nathan] is the brightest.” After this point, Smith continued to dodge Lapierre’s request for his salary.
It wasn’t until May 1, 2019 that Smith asked for Lapierre’s bank account information. Hotspawn has acquired proof that Smith received Lapierre’s banking information. It still had not been paid as of May 15, 2019.
A source who wishes to remain anonymous claims, “He [Zach Smith] specifically seeks out players that are in need and ‘buys’ goodwill in various communities. He will find players who need flights, hotel rooms, and/or travel accommodations, and manipulates them into play for free, basically. He is a serial liar and scam artist.”
We reached out to other players who used to be under Denial’s banner, and the story remained the same. A source close to the old PUBG team shared their side of the story. They wish to remain anonymous out of fear of legal litigation.
“We are currently playing under ExG [Excelerate Gaming], but we are in talks with the NPL and OGN trying to figure out how to get Zach [Smith] out of the scene. It’s a mess. [I] don’t want others getting f**** over. We are tired of getting manipulated.”
We talked with six individuals who are allegedly owed money. According to our records, Smith owes over $100,000 USD to players. The players feel that they are owed their salary due to signing contracts or letters of intent that state their salary.
According to Lapierre, “We [the players] are only asking for what is owed. Nothing else.”
“For the players by the players”
Two days later after Dupuis’ Twitlonger, Smith posted his own Twitlonger announcing that he would be handing over the day-to-day operations of Denial Esports.
Within Smith’s post, he writes, “It is important to note that this player knew and agreed to the entire situation and even signed a declaration prior to joining our team confirming his understanding and acceptance. This was only done due to existing immigration laws regarding work authorization and visas.” The players did sign a declaration stating that they were not United States citizens and would not be earning a salary in the United States. The players were asked to sign these papers in order to provide them to MLG in order to begin the visa process. Once the players signed that declaration letter, they were no longer legally obligated to earn a salary through competing. When asked, Dupuis and Lapierre told Hotspawn they were told, “to sign the letter for MLG or else they wouldn’t be able to play.”
Later in Smith’s statement, he claims that Denial “set up an escrow account with funds to cover the alleged owed salaries of the player.” When we reached out to the alleged player, he stated that he did not receive funds or information on the account. In fact, the players had no idea what an escrow account was.
As of May 16, 2019, Smith has not contacted Ryan Lapierre, Nathan Dupuis, or any of the previous Call of Duty players about the alleged escrow account.
A few hours before Smith’s statement was released, OverTime Esports released their own statement sharing their side of the story. OverTime claims that Smith still owes the organization “tens of thousands of euros for the sale of the CWL Pro League spot we got earlier this year.” Due to the lack of funds, OverTime Esports has been inactive since January 28, 2019.
Hotspawn reached out to OverTime Esports for comment and their response was, “We are open to any questions. Even if we don’t get what we are looking for (money for the Pro League spot), we want to clear things about Denial and how they are working.” According to OverTime Esports, the organization did not use a legal representative due to the time frame of the deal. OverTime Esports had, allegedly, approximately 72 hours to close the deal with Denial. The deal window was small due to the start of the Pro League matches on February 4, 2019.
Hotspawn reached out to Smith and his lawyer, but they declined to comment.
At this time, Denial is still running normally. Jerry Nguyen, chief strategy officer, will be promoted to help run the day-to-day operations along with a promotion for Patrick “Blackbeard” Smith (no relation to Zach Smith) to CEO.
If any previous or current Denial Esports players or staff would like to share their story, please reach out to Hotspawn or Amanda Zelauskas.