Magician: "To support the roster of an esports organization, you need at least $400,000 a year."

There are practically no new clubs in the region. Why and what has changed?

Recently, the following trend has appeared - clubs with traditional investments do not appear, only established players in the market remain. But clubs began to appear under the auspices of bookmakers. These are 2 separate business models, and for each I will tell you why. You want to open a club. To begin with, let's calculate the expenses and incomes, very rough and basic. So we can understand how to build a club model. We take CS:GO/Dota 2 for the market - there are differences, but the general meaning will be clear.

Expenses

• Salaries We average about $1,000-$2,000 for five players and a coach plus an analyst $1,000 = $7,000-$13,000.
• Bootcamp If you have to rent a ready made bootcamp it will cost $5,000-$6,000 per month on average. Considering everything. The second option is to buy the PC itself and rent a house, but then more money at the start (On average, a complete PC will cost about $2,500-$3,000 with everything, you need 7 of them)
• Personnel costs Manager, marketer (SMM), operator/editor, designer, financier, lawyer, general director in the amount of $5,000-$6,000(Basic RFP subject to minimum skill and outsourced parts).
• Other Expenses For everything else about $2,000-$3,000 per month.
• Total We have an average monthly cost of $20,000 to $30,000 to have a club with only one squad. Yes, part of the expenses may decrease if the bootcamp is not every month, but the goal is to become a TOP team. In total, if you add on top of the costs of marketing, legal and everything else, you need about $400,000-$500,000 per year to run the club.

Income

• Prizes An average percentage of 20 to 40% of the prize share goes to the club, you won't earn much here.
• Transfers If you are lucky and everything works out, then in CS:GO you can earn 5-6 digit amounts, but the thing is very fickle, because you don’t know who will need whom and when, from clubs who is willing to pay.
• Sponsors At the first stages, this means signing a bookmaker + 2-3 sponsors on a barter basis. But it is important to understand that in order to sign a bookmaker: you still need to have media and participate in some championships. Other categories like merch, payouts from leagues, stickers (CS: GO) are not relevant because the new club will be of little interest to anyone
• Total We have a model in which you need to make investments every year and hope that management will bring everything to the TOP, build a business model. This is the reason why they stopped investing in clubs in its classical sense.

And now let's see from the side of the bookmaker how they can maintain the lineup in the eSports discipline. For those teams that entered under the bookmaker tag, they reduce part of the staff and bootcamp costs. There is marketing. Thus, they receive a finished product in the form of a composition that is branded and advertised. over which they have control. Why it became possible - earlier there was a very negative background from Valve and the community when naming the team after the bookmaker. Now it has become the norm due to the reduction of the partner market, so everyone is used to it. Therefore, I will not be surprised if similar compositions appear in the near future - I am more than sure that this is only the beginning of a development cycle that many have overlooked.