I know most esports orgs operate at a loss, but what exactly brings revenue in from their team? Like EDG just got a million dollars from champs, and I'm assuming that's split between the team and the org however which way. But is earnings actually the only form of revenue they make off teams? I guess bundles just got included, but what about esports with no in game team related purchases? I'm struggling to see the financial reasoning for supporting a valorant team; how sustainable is the current model?
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How do orgs make money off rosters?
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It depends a lot on the esport in question, at the moment teams in VCT are fine, because riot pays an insane amount to each team. This isn't even including bundle sales that boost revenue significantly. Anything outside of VCT will be tough due to the lack of viewership and tournaments.
The revenue model differs between esports, for example in CS the circuit is much more open and the revenue from in game items is absolutely massive. There's smaller orgs that managed to keep their rosters running for an extra year or even two just from the money generated by getting to the Major.
Outside of making big events, there's also the revenue model of being a "feeder" org. You basically find the next talents and get them to the tier 1 level, then you can sell their contract off for significant sums, there's an org in CS that in the past has reported higher revenue than most tier 1 teams just by doing that.
Even tier2 players in CS are rich asf. I seen Styko's video (former player in Apeks a tier 2 team) where he was getting like 300k just from stickers alone. Tier 1 players are getting like at least 900k to 5 million dollars. S1mple's buyout even though he hasn't played in over a year is still around 3-4 million. Insane!
It all depends on the definition of tier 1, in CS it often is described as top ~10 teams in the world (in fact it will more often be lower). If we consider all of VCT as tier 1 then it already dwarfs CS because from 2025 it will be 12 teams per region (48 teams in total). The Major hosts 24 teams (which get stickers), which is still only half the size of VCT.
I would say top 15-20. But the difference is that tier 2 can play with tier 1. That can be top 30, top 50, hell even sometimes top 100 team somehow manage to sneak in a tier 1 tournament time to time.Valorant only has a couple tournaments per year, CS has like 10-15 just for tier 1, for tier 2 its even more. Plus, the major is one of many tournaments.
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