How to Start An eSports Team? What are the costs?

Welcome to the era of the internet! Where real-life sports have taken a back seat and the glory days of eSports have begun! eSports teams and tournaments have been rapidly gaining popularity throughout the last decade. Those at the right place at the right time have been at the forefront of the cash benefits that the eSports world has to offer. So…if you were to win the lottery tomorrow hypothetically, and wanted to start your own eSports team, what would it cost? Before you get your budget set, let’s take a look at the most popular eSports team’s earnings and spending habits.

Starting an Esports Team: The Necessities

As a team owner, you’d be responsible for player salaries, employee salaries, team housing/office space, travel/accommodations for tournaments and events, not to mention any other miscellaneous costs that come with starting a major eSports organization. According to a Forbes investigation into the startup costs of eSports teams, it’s actually pretty likely that your company will be in the negative for quite a while as you build your team’s roster and brand. It’s speculated that at least half of a professional team’s spending (think TSM, Cloud9, or FaZe) is allocated to talent acquirement, player salaries, and branding.

Aside from these aspects, you’ll likely be putting the rest of your funds into one of the categories mentioned above, and according to Team Solomid, this could get pretty pricey. In 2018, Andy Dinh (Owner of TSM) invested 1.5 million dollars into buying a house for his Fortnite team members to reside. This isn’t a rarity amongst major esports teams.

When it comes to spending large amounts of money on their players, look no further than FaZe clan, who reportedly bought not one but three mansions around the Los Angeles area for their team members to reside. One of the mansions is confirmed to be worth at least 12.5 million dollars… Before you throw out all possibilities of starting an eSports team, let’s see what’s in it for you. I mean the whole point of an Esports organization is to generate revenue for its owners and players.

Starting an Esports Team, Making the Big Bucks

How Much Does it Cost to Create and Manage An Esports Team?

So, you’ve bought the house, signed the players, hired the staff, and are ready to start making money. Where do you start? Once your players start winning tournaments, your organization would take a percentage of their winnings as per your contract. As your team gains name recognition and your players sign advertising deals, this will also bring in additional revenue for your team. Remember TSM’s leader who dropped 1.5 million on the house for his team? Shortly after signing with TSM, Fortnite star Ali “Myth” Kabbani attracted the attention of popular chain Chipotle. The company presented TSM with a sponsorship deal reportedly worth seven figures. This is one of several opportunities that major eSports organizations are presented with when they acquire players with strong name recognition and large followings on social media.

In the end, if your esports team made it big, you could potentially reap some serious rewards. So, how much are we talking here? Last year alone, the top three ranked esports teams were all worth at least 200 million dollars or more. With Cloud9 being valued at 310 million dollars, followed by Team Solomid (TSM) at 250 million, and Team Liquid ranking 3rd with a net worth of 200 million.

In the end, it’s almost impossible to put a number to how much it would cost to start an Esports team. It all depends on the team’s size, talent, and about a million other factors. Statistically speaking, you could end up spending anywhere from fifty thousand to several million dollars a year.

While the numbers speak for themselves, it’s important to remember that starting an Esports team is a lot of work. However, for those that rise above the rest, there’s nothing better than making a living playing your favorite video games and seeing the world while you’re at it! Regardless of the risk and rewards that come from starting an Esports team, it’s safe to say that we merely see the beginning of the world of eSports. There’s no telling where Esports organizations will be in 10 or 20 years from now. One thing is sure, there is most definitely money to be made in eSports organizations. Who knows…we may one day be seeing your Esports team up at the top with the other big names battling it out in the area.

Updated on 08/09/19 by Quentin Rosso

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