Owning and operating an esports team is very similar to owning a business. I found this particular topic very interesting because of my own entrepreneurial spirit.
How do you start a professional esports team? Decide if you want to start a brand new team or join a franchised system. When getting started focus on keeping your team local, find sponsors, decide on a team name and logo, and utilize social media to grow your fanbase.
When I started researching this particular topic, I didn’t even realize that franchising an esports team was possible. I knew owning a team would be a lot of work, but I had no idea that it could really become a full-time career. Unfortunately, a lot of organizations fail because they don’t put the proper people and procedures in place to be successful. Hopefully, you can avoid some of these mistakes and create a team that one-day will rival Evil Geniuses.
Even though you’ve decided to start a team you’re probably still wondering how esports teams make money?
Owners of esports teams earn money through a variety of different avenues. The first is through tournament championships.
The more your team wins the more prize money you get. Obviously, you’ll have to split that prize money with the players you employ, but if your team is good, there’s a lot of potentials for everyone to make money.
Another way esports teams make money is through corporate sponsorships. Companies will pay to have their logos and brands associated with organizations.
Finally, the last route is more for franchised esports teams where the league will pay their teams through revenue sharing.
Basically, any media rights and sponsorships generated on a league level are paid out to owners. Everyone is benefitting from the league and sport only becoming more popular.
So there is money to be made in esports, but you’ll need to start a team first.
Before you continue reading this particular blog, I think it’s best to warn you that a lot of this information won’t be relevant to you depending on the game you’re playing professionally.
If you’re playing a single-player game like Super Smash Brothers or Street Fighter, it won’t be necessary to create a team to compete.
Many amateur esports players who use those games will start on their own before starting or joining a team. Eventually, they hope to be signed to a group for financial security and increased exposure.
Having an official professional esports team is more common for multiplayer games.
Esports teams are really for multiplayer games like League of Legends, Dota 2, Counter-Strike: Global Offensive, and Overwatch.
These games rely heavily on teamwork and multiplayer use.
If a gamer wants to compete in tournaments using these games, they must be part of a team.
It’s Not Easy
As we’ll discuss later in this blog owning and operating an esports team is not easy.
If you are a retired gamer, a parent of a player, or just have a desire to be a part of the ever-growing esports industry than owning a professional team might be something you’d like to try.
Many people think owning an esports team is simple and can be done without much hands-on work.
Unfortunately, that’s not the case!
These esports teams take a lot of patience, dedication, and hard work for them to really be successful.
It’s definitely possible to create a highly successful team, but you need to have your expectations in check.
The most common way to start an esports team is on their own.
We’ll discuss purchasing a franchised esports team later, but most likely you’ll be doing it on your own separate from a massive esports League.
I’ve recently fallen in love with the mindset of being an entrepreneur. It’s never something I thought would appeal to me, but I find a lot of enjoyment in it.
Owners of professional esports team need to have an entrepreneur mindset!
DID YOU KNOW?
Noah Whinston was the youngest Esports team CEO at the age of 21.
You’ll need this mindset because so many responsibilities will fall on you as the owner.
Hopefully, some of the following advice will make it easy for you as you start this journey. Just remember, every esports team, even the most successful ones, had very humble beginnings.
You are getting involved with the industry at an absolutely perfect time! It’s only growing in popularity every year, and hopefully, you’ll find lots of success.
When it comes to owning a professional esports team, it’s highly encouraged that you focus on one game in the beginning.
This gives you time to gain experience as a new owner. Especially since there’s so much to learn as an owner.
Thankfully there’s a huge variety of games to choose from, but it really comes down to personal preferences and finances.
Try to find a game you enjoy watching. Even though you may not necessarily be playing the game, you still want to enjoy being apart of tournaments.
This will only increase your desire to have your team win and to watch them play in tournaments.
We can discuss finances later, but choosing a game will affect your finances. Certain games will obviously have higher entrance fees at tournaments because the game is just more widespread.
Your finances will also determine whether you want to compete in PC, console, or VR leagues.
Focus Locally First
Once you’ve decided on the game, try to work on completing these steps. They don’t necessarily have to occur in any particular order.
To help with costs and to create excitement I would encourage you to start your esports team locally.
I understand this can be difficult depending on where you live, but there are several advantages to keeping everything local.
#1 Local Tournaments
You’ll be able to keep a lot of costs down by only focusing on local tournaments.
The expense to have your team travel to tournaments across the country can be incredibly high. It’s much easier, in the beginning, to focus on matches within a four-hour drive.
CHECK IT OUT
Feel free to utilize Battlefy and Toornament to find esports tournaments near you.
After your team has dominated the local talent and tournaments, then you can talk about expanding to national competitions.
#2 Team Building
Beyond keeping costs down, remaining local helps build team morale and camaraderie.
Teammates can only get to know each other so well over the internet and online play. They need to be practicing together in the same room to work on timing and communication.
This is especially easy whenever everyone lives in the same area or city.
#3 Local Sponsors
As we’ve already discussed owning a professional esports team is not cheap because of tournament fees, salaries, and travel fees.
One of your priorities needs to be finding local sponsors.
Having sponsors on your side will limit your costs so your team can grow and build a proper following. Depending on your skills at marketing this can be a particularly challenging step.
This is why you start local.
Find the local stores and services operating in your city and approach them first.
Sell them on the publicity and social media following that your team will be getting.
These local sponsors will also appreciate your team competing in tournaments close to home so their logo can be seen by possible consumers. It’s very common to have company logos on the team’s jerseys.
My professional background includes owning a service type of company. I handled all the marketing and business development for our company.
This meant that local sports teams were continually coming to me hoping our company would sponsor them.
We did find some success in sponsoring a sports team, but I was never approached by an esports team. If one had, I would have been tempted to give it a shot.
When setting up these corporate sponsorships, please make sure to have some sort of documentation outlining all expectations between your team and the sponsorship company.
The last thing you want is for there to be any disagreements between you and your sponsors. Try your best to keep them happy and show them a good return on investment.
#4 Deciding on a Name
The last real benefit to keeping your team hyperlocal is the ease it gives you for naming purposes.
If you do a quick Google search of various professional esports teams, you’ll see all kinds of names. Most of them don’t make sense and are just used for marketing purposes.
To maintain that local feel you can name your esports team in honor of your home city.
For instance, if we decided to start an esports team, we could easily call it the Charlotte Beavers.
I know it’s a stupid name, but it shows a little bit of city pride and is memorable.
#5 Brand Building
When deciding on your name, you’ll need a good logo that fits with it.
Owning an esports team is very dependent on marketing and brand awareness. There are a lot of groups and organizations, so you will need every advantage to stand out.
Having a memorable name and logo are great ways to stand out from the crowd.
You need to be smart with your brand to make sure it gets the proper exposure. Either handle social media yourself or find a company to do this for you.
Having a consistent and strong social media presence will be vital to your success as a young esports team.
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Look at how Team Liquid uses social media to grow their fanbase.
You want your players to have a very clear understanding of your brand image as they go out and compete.
Everyone needs to be on the same page, and all your social media channels need to be identical.
Let’s recap everything you’ve done up to this point to build your esports team.
- You’ve picked the game you want to compete in
- Decided to keep it local
- Began to look for sponsors
- Decided on a team name and logo
- Began utilizing social media
These are all incredibly vital steps that need to be accomplished. As you’re doing every task make sure to get plenty of advice on proper financial practices and seek legal advice if required.
Your team is a business, so please make sure everything is buttoned up and taken care of.
We all know you can’t have an esports team without players. This could be both the most fun and most frustrating part of being an owner.
Depending on the game you decided to play you’ll most likely need a minimum of five (5) players. It’s recommended you also have a few substitutes just in case someone can’t make it to a tournament.
Finding players for your esports team is honestly the single most crucial aspect of finding success.
You’ll never earn any money if your team never wins. Being an esports athlete is incredibly performance-based.
Your players have to show up ready to dominate at tournaments so you can continue to fund the team.
Unfortunately, players can cause a lot of excitement and frustration.
If you didn’t already know, esports is an industry with very young athletes. So the athletes you will be employing are most likely going to be between the ages of 17 to 25.
With their age being so low, there is a lot of frustration that can come from player immaturity. You need to make sure everything is properly under control.
You need to conduct as much research as you can about these players before signing them to your team. Scout local competitions to make sure you are finding the right talent.
I keep referencing the business analogy because it’s incredibly relevant to owning an esports team. When hiring new staff, you always conduct in-depth research and background checks before hiring someone. Esports is no different!
When scouting at tournaments, you need to be looking for more than just talent. There’s always going to be gamers that are very good at what they do, but you want athletes that bring more to the table.
Watch how a gamer warms up, handles losses and wins, and interacts with other players.
You’ll learn a lot about someone very quickly by seeing how they compete.
I hope your players will represent the team brand well. After all, they are the face of your company. They are the ones wearing your logo and representing you at tournaments.
After you’ve spent some time scouting players I would recommend holding tryouts. It’s no different than when my high school football coach made us try out to make the team.
You want to make sure your players are communicating well, can win, and will handle the pressure. Find athletes that are genuinely passionate and love what they do.
DID YOU KNOW?
Even the Overwatch League held tryouts to find the best talent.
As the owner, you’ll be spending a lot of time with these gamers so make sure you enjoy their company.
Up and Comers
Since you are a new team joining the industry, I wouldn’t recommend going for the very best players. Most likely they already have contracts in place and will not take your offer seriously.
Your best bet would be to find young and upcoming talent that’s looking for an opportunity. Gamers that are hungry and want to prove themselves.
By going this route you might just find the next esports superstar!
A slightly more awkward conversation you’ll need to have with the players you bring on board is how you will support them financially.
This is a tricky topic to discuss because so many teams handle player contracts differently.
Depending on the esports team sometimes the athletes only get paid when they win. It’s more of a part-time job then a full-time career.
Your financial situation will absolutely determine how you are compensating your athletes. You obviously want to be fair to them and be competitive with other gaming teams.
Most athletes will typically join teams that offer the most financial security.
This is when I would recommend finding an accountant and a lawyer. Have them design your player contracts, so everyone knows what’s expected.
CHECK IT OUT
Esports attorney Ryan Morrison wrote a great article about esports contracts.
You don’t want to be caught in problematic situations because things weren’t documented adequately.
Obviously the players would prefer being salaried employees, but in the beginning, they fully understand that’s not always going to be the case.
Compensate them however you can by their performance or even hourly.
As an owner, you have an incredible opportunity to mold young men and women into great athletes and professionals. You need to treat them as professionals and expect the same from them.
I really do hope you find a great team that can help you build a winning organization.
The Nuts and Bolts
Choosing a team name and finding players are honestly the more fun parts of setting up a professional esports team.
All the other tasks you need to finish are more on the operational side of the business.
There are 3 things you need to decide on when you are ready to start training and competing.
The first is deciding where your team is going to practice.
The larger esports teams have what is called gaming houses. Athletes from teams will live together, and practice together in gaming houses.
Esports organizers use these homes as an incentive to sign up players because they typically allow them to live there completely free.
I will admit that gaming houses are an excellent way for teammates to bond together not only through training but also by just living life together. But typically new esports teams don’t have gaming houses for their athletes.
Another route you could go would be to either use a co-working space or rent a small office. Basically, any small size area with high-quality internet that allows your gamers to train and practice together will work.
By having a dedicated space, it gives your athletes the chance to get in the right mindset when showing up to train. It’s more of a professional mindset and keeps them focused.
If you genuinely can’t find or afford space for everyone to practice together in person online gaming is another alternative. All your players can log on together and compete.
Online gaming definitely is good for practice, but your players can only build so much camaraderie together over the internet.
The other decision you’ll need to make is whether to provide the gaming equipment for your athletes or if they have to bring their own.
Again the larger more established esports teams provide all their athletes with the very best PCs, gaming chairs, headsets, jerseys, and gaming consoles.
As a newer team, you will have to decide what you want to invest in. Sometimes it’s just not possible to provide your organization with the same equipment.
It’s widespread in the industry for athletes to bring their own gear when they’re getting together with their teammates.
Having corporate sponsors can definitely help with this part of the business. If you happen to get a tech company to sponsor your team, there’s a chance they may provide you with some gaming equipment.
All of the equipment can be incredibly expensive. Take a look at our previous How Expensive is it to Play Esports: Part 1 about the expenses that come with esports.
If I was an esports team owner, my priority would be investing in proper jerseys for my gamers. It goes back to representing the brand well by having all your athletes in matching jerseys.
It makes them really feel like a team and it looks professional.
Your team can’t properly utilize a training space or equipment without having a very detailed and thorough team practice schedule.
The best esports teams in the world have incredibly detailed practice schedules for their athletes. They have it mapped out how long they’re going to be plugged in playing and training offline by studying game film.
This all goes back to that mentality of being a professional athletic team.
Look at any team in the NBA, NFL, or MLB, and you’ll quickly notice how much time and effort these athletes put into training. They understand the need to train so they can continue to be the best at what they do.
Your athletes will need to buy into the concept of training to be better not only for themselves but also for the team.
Have dedicated time marked out for playing time, brakes, team building, film studying, and even physical exercise.
These are all components of training that need to have their own dedicated time.
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Here’s a snipett of a typical training day for esports team LG Dire Wolves
- 8:00am – Wake Up
- 8:30-10:30am – Gym, shower, breakfast
- 10:30-11:30am – Video Review
- 12-3pm – First team practice block
- 3-4pm – Break
- 4-7pm – Second team practice block
- 7-8pm – Dinner
- 8pm-12am – Solo practice
If you don’t have the background on how to train an esports team properly, then I would highly advise either consulting with a retired player or maybe appoint a team leader.
Having a dedicated team leader can be helpful to keep your team focused and organized. Hopefully, you can find one of your gamers that has leadership qualities.
Once you’ve figured out all the financials, put together a team, have a dedicated practice area, and developed a team schedule you’ll be ready to compete.
Enter in as many tournaments as you can and build your team’s reputation in esports leagues.
This is a very new concept that esports leagues are trying to push forward.
All of the major sports leagues in the United States are made up of individual owners having teams. It’s the same in the NBA, MLB, and NFL.
The only way I thought someone could have an esports team was by starting it themselves. I wasn’t aware that people could just buy a team.
Leading the Charge
Riot Games and Blizzard are the two game developers making esports franchising a reality.
For those of you that don’t know, Riot develops and runs the League of Legends Championship Series while Blizzard operates the Overwatch League.
Both are incredibly popular and have captured the attention of all esports fans.
The League of Legends Championship Series is a worldwide league with additional locations in Europe and Asia.
Their North American division is where there franchising has become a reality. Riot wants to have 10 permanent League of Legends franchises within the next few years.
The current price to buy a League of Legends franchise is $10 million dollars for existing team owners and $13 million for new owners.
Blizzard, on the other hand, is trying something more unique in their Overwatch League. They are trying to mimic it after other sports leagues by having permanent teams in specific cities.
Right now there are Overwatch teams in New York, Dallas, Texas, Philadelphia, Atlanta, and many more. Their goal is to have 28 teams in the Overwatch League.
The franchise fee for an Overwatch team is actually $20 million dollars.
I was shocked at the price being charged for these franchises. It’ll be interesting to see if wealthy business owners see the value in purchasing one of these teams.
Even though this is an absolutely massive amount of money, it’s still significantly cheaper than other sports franchises.
DID YOU KNOW?
The NFL team Carolina Panthers were recently purchased for $2.3 billion dollars.
Both game developers obviously see great potential with their leagues; otherwise, they wouldn’t be asking such a large amount.
Who’s in Charge?
What’s particularly interesting to me about these two esports leagues is the fact that the owners aren’t necessarily in charge. In the NFL the owners make all the decisions on rule changes and approvals for new franchises.
In both the Overwatch League and League of Legends Championship Series the game developers hold all the power. Blizzard and Riot make the decision on all the rule changes and any new expansion opportunities.
Thankfully they are both trying to take care of the athletes that are competing. Riot is currently establishing a player union for the gamers in the League of Legends Championship Series.
Blizzard is not planning on starting a union, but they are requiring that each player on a team gets paid a minimum of $50,000 a year, health insurance, and a housing/practice facility.
I’m glad these large companies are still thinking of the athletes that are making their league so popular in the first place.
If you can go this route then, by all means, take the leap of faith. It’s definitely helpful to join an established league and get access to the best players.
I just find it so exciting that these opportunities are even out there for people to get involved in the esports industry.
With all the teams and leagues coming into esports a $20 million franchise fee is going to seem low in the next decade or so.
Are there any risks with owning an esports franchise? The most significant risk is the general public no longer caring about a specific game. Game developers are always releasing new products, so you never know how long a particular game is going to remain popular.