Because e-sport is still very young and learning to become even more professional, it is quite difficult to estimate the amount of revenue generated by a professional team or a big event. Private contracts, secrets, competition. So many factors make this task very challenging. SmartCast will shed some light on this!
We have to be open about it! This document is based on estimates, no contracts were available to us. Our work is based on serious sources such as esport-earnings. We played around with numbers that were heavily scrutinized by long time players and observers of the e-sport scene.
To create this report we took a closer look at one case: the EnvyUs. Their Counter Strike squad to be precise. It’s a team composed of 5 French players that can be considered to be the second best team in the world. We followed all their results during the year 2015 with nearly 7 months of competition. This is what we have learnt:
How much does a team cost?
From February 11th to August 23rd, the EnvyUs have taken part in 16 competitions all around Europe. Most of these took place physically. And the season is not over, we still have several competitions our frenchies must compete in. They will soon be leaving for Dubai, Paris and Stockholm! We estimate the travel costs for 6 people (5 players + 1 coach) at 70 000 dollars in the year.
The players and their manager will receive a monthly salary. Their employer, EnvyUs is run by the company Envy Gaming LLC based in the USA. Difficult to know the contractual details between the two parties. Or even the type of contract they have. The only thing we do know is that 3 of the players, Nathan “NBK” Schmit, Fabien “Kioshima” Fiery & Vincent “Happy” Cervoni each have their own company in the form of simplified share based companies. Based in Nice, the birthplace of the club’s future Gaming House we can guess that players pay taxes in France. The task now becomes harder still as we know that NBK lives in Austria.
In order to talk about how much the salary could be, we must start off with a hypothesis. We will go with the basis that each player earns a salary before taxes of 3 000 dollars per month. The coach, who deals with the daily needs of the team and coordinates their different travels, will earn 2 000 dollars a month. Taking into consideration some expenses for equipment, accessories as well as extra wage costs. We then end up with a total budget of about 380 000 dollars just for the Counter Strike squad.
How much does a team earn?
Now comes the question most of us have been asking. How much does the Counter Strike team earn? Money from cash prizes is the first source of revenue we can think of. Out of 16 competitions, the frenchies earn a total of 273 700 dollars. There are still 7 or 8 more competitions to attend for the “boys in blue” including a major in Dubai! In some countries, earnings from tournaments are taxable: we can therefore assume this corresponds to 10% of the total sum.
The team will also take a cut of the earnings. The average is between 10 and 15%. For now we will estimate this at 32 000 dollars.
Counter Strike has a very singular economy. With each major competition come new skins for sale that allow players and fans to customize their weapons. If this enormous success is bringing in lots of money for the editor Valve, it also allows the more popular teams to increase their treasury. The skins market is in constant growth. Teams taking part in the ESL One in Cologne earned a total of 4.2 million dollars! Just that! How big of a slice did each team take home? Cross-referencing the number of subscribers for each player on social media and popularity polls at the contests, we have been able to make an estimate! EnvyUs would have presumably earned 550 000 dollars selling skins since the beginning of the year.
Historically, the major part of a team’s revenue comes from sponsoring. EnvyUs has 5 top-notch sponsors: Monster, Gaems, Astro, Scuf Gaming and DXRacer. How were these partnerships negotiated? Monster is a very generous brand and EnvyUs’s main sponsor. For comparison’s sake, Monster has invested up to 4 million dollars for their American moto GP lineup. From our estimations, the amount of the deal between the two could be around the 250 000 dollars mark. Selling brand exposition for its two teams, CS:GO and COD, could allow EnvyUs to earn up to
500 000 dollars from sponsorships.
Historically, the major part of a team’s revenue comes from sponsoring. EnvyUs has 5 top-notch sponsors: Monster, Gaems, Astro, Scuf Gaming and DXRacer. How were these partnerships negotiated? Monster is a very generous brand and EnvyUs’s main sponsor. For comparison’s sake, Monster has invested up to 4 million dollars for their American moto GP lineup. From our estimations, the amount of the deal between the two could be around the 250 000 dollars mark. Selling brand exposition for its two teams, CS:GO and COD, could allow EnvyUs to earn up to 500 000 dollars from sponsorships.
Calculators at the ready!
Adding up the different revenue streams, the team would be able to generate nearly 1.3 million dollars in revenue. With its activity on Counter Strike, EnvyUs could be earning benefits of around 225 000 dollars over the course of 7 months. The remaining sum going straight to the player’s pockets. Look out though, this is not pure benefit! A good amount of the money must surely go towards helping EnvyUs / Envy Gaming LLC to maintain their activity in the future in the world of e-sports and gaming accessory sales.
For our players, if we add up the salaries, cash prizes and skin sales, we go up to a monthly salary of around 15 000 dollars. What about streaming or coaching? With their heavy timetable of competitions and trainings, the five French players don’t have much time for these activities. That’s why we did not take them into account here.
Overall, even if these results can considerably change from our initial estimates, an undeniable dynamic appears here. Electronic sport – Counter Strike – is a very profitable business for these structures. Maybe not for all its actors, but definitely for high end competitive teams. If sponsoring the great gaming talents can be beneficial, this still represents a heavy load in the beginning. A structure that wants to start out must have very strong foundations to be able to support the initial expenses.
Through writing down the numbers of this ever evolving sphere, it is clear that electronic sport is becoming more and more profitable for its actors and still has some very bright days ahead of it!
(We have tried contacting EnvyUs but have not received an answer yet)
Translation – James Berry
