How Does An Esports Team Make Money?

A look at the different ways that professional esports teams make money, from tournament winnings to sponsorship deals.

Introduction

While there are a few ways that individual esports players can make money, the vast majority of revenue for esports teams comes from three primary sources: sponsorships, tournament winnings, and merchandise sales. In this article, we’ll take a look at each of these revenue streams in turn and discuss how they work.

## Sponsorships
The majority of revenue for most esports teams comes from sponsorships. Sponsorships are financial agreements between an esports team and a sponsoring company in which the sponsoring company provides funding to the team in exchange for promotional consideration.

The specifics of these agreements vary from team to team and sponsor to sponsor, but they typically involve some combination of the following:
– The sponsoring company’s logo being prominently displayed on the team’s jerseys or website;
– The team wearing or using the sponsoring company’s products during events;
– The team participating in promotional activities on behalf of the sponsoring company;
– The team streaming sponsored content on their Twitch channel or YouTube channel;
– And so forth.

In return for this promotional consideration, the sponsoring company provides funding to the team which they can then use to cover their operating expenses. These expenses can include things like player salaries, coaching salaries, travel expenses, equipment costs, and so forth.

The size of these sponsorship deals varies widely from team to team and from year to year, but some recent examples include:
– In 2019, French poker site Winamax agreed to sponsor several European Counter-Strike: Global Offensive teams with deals worth up to $1 million per year.
– In 2018, Japanese car manufacturer Honda agreed to sponsor Team Liquid’s Dota 2 roster with a deal worth $4 million per year.
– In 2017, American energy drink maker Red Bull agreed to an extension of its sponsorship deal with German organization Evil Geniuses with a deal valued at $6 million per year.

The Different Ways an Esports Team Can Make Money

Esports teams can make money in a few different ways. The most common way is through sponsorships from companies who want to advertise to the team’s audience. Teams can also make money by winning tournaments and prize pools. Another way teams can make money is through content creation, such as streaming on Twitch or Youtube, or through merchandise sales.

Sponsorships

An esports team can make money through sponsorships from companies that want to advertise to the team’s fanbase. The team will typically have their logo on the players’ jerseys andStreams, as well as getting a cut of any merchandise sales. The team may also get paid to appear in promotional videos or social media posts for the sponsor.

Advertisements

Advertisements are common in traditional sports, and they are starting to become more common in esports as well. Teams can make money from advertisements in a variety of ways, including through sponsorships, product placements, and banner ads.

Sponsorships are agreements between a team and a company in which the company pays the team to promote its products or services. For example, a team might agree to wear a sponsor’s logo on their jerseys, or to place the sponsor’s banner ad on their website. Product placement is similar to sponsorship, but it generally refers to the placement of products within the game itself. For example, a company might pay to have its energy drink appear as an item that players can pick up and use within the game.

Banner ads are advertisements that are displayed on a team’s website or social media pages. These ads can be sold directly by the team, or they can be sold through an advertising network such as Google Adsense.

Prize Money

While playing in tournaments and events, teams can earn prize money. This is awarded to the team by the organizers of the event, and the amount depends on how well the team places. For example, The International, one of the biggest Dota 2 events of the year, had a prize pool of over $24 million in 2017, with the winning team taking home over $10 million. So if a team can win or do well in enough events, they can make a significant amount of money just from prize pools.

Merchandise

One popular way for esports teams to make money is through merchandising. This can include selling items such as t-shirts, hoodies, and other apparel with team branding. Fans of esports teams are often willing to buy merchandise in order to show their support for their favorite team.

Another way teams can make money through merchandising is by selling merchandise related to specific events or tournaments that the team is participating in. For example, a team might sell t-shirts with event branding leading up to and during a major tournament that they are playing in. This can be a great way for teams to generate additional revenue around key events.

Conclusion

So, how do esports teams make money? There are a few ways. Some teams are sponsored by big companies who see the value in investing in esports. Others make money through tournaments and prizing, and some generate revenue through streaming platforms like Twitch. Ultimately, it depends on the team and what their strategy is. But one thing is for sure: with the popularity of esports continuing to grow, there will be more and more opportunities for teams to make money in the years to come.