I’d promise teams a payment that lasts several years and doesn’t depend on how many skins sell that season.
Research · Summer 2026
Anchorless
Why esports teams keep collapsing
Esports keeps drawing bigger crowds, and teams keep folding anyway. I spent the summer trying to explain that gap by comparing how esports teams and traditional sports clubs make their money.
Download abstract (PDF)~5,000words
34sources
2022–24the “Esports Winter”
The paradox
Huge audience, empty wallet
6.9M+viewers tuned in to the 2024 League of Legends World Championship.
≈ $20Mnet loss for the LCK, Korea’s top LoL league, in 2024.
₩16.6Boperating loss reported by T1, the most famous team in that league.
If attention were the problem, these numbers would point the same way. They don’t. So I stopped asking how many people watch and started asking where the money actually comes from.
How I set it up
Follow the revenue
Independent variable
Organization type: esports team or traditional sports club
→
Mediator
Revenue mix: what share of income is locked in by contract
→
Dependent variable
Financial sustainability: who survives a bad year
My argument is that esports teams aren’t short on income streams. They have plenty: sponsors, creators, investor money, a cut of game sales. What they lack is an anchor, one stream that arrives every year no matter what.
What an anchor looks like
The broadcast deal
Manchester United sells tickets and sponsorships like everyone else. But about a quarter of its revenue comes from broadcast rights signed years in advance. A losing season doesn’t cancel that check.
Esports has no real equivalent. Most of what a team earns is negotiated deal by deal, and any of it can walk away.
Manchester United revenue by source, FY2025
£ millions
- Commercial£333.3M
- BroadcastANCHOR£173.0M
- Matchday£160.3M
0100200300400
Evidence, part one
When the league moves the floor
| League | Number | What happened |
|---|---|---|
| Overwatch League | $20M | Teams paid about $20M for a franchise slot. The league shut down in 2023. |
| Call of Duty League | $25.5M | In 2024 the league dropped its entry fees. Toronto Ultra had $25.5M left to pay, and it was simply forgiven. |
| VALORANT Champions Tour | $105M+ | Riot shared over $105M with teams in 2025, but the amount rises and falls with in-game skin sales, so fans decide it, not a contract. |
One policy change from a game publisher can rewrite a team’s whole business plan overnight.
Evidence, part two
Same shock, different ending
Major League Baseball, 2020
- The pandemic cut league revenue by about 64%.
- Instead of walking away, broadcasters signed a $12.4B extension.
Overwatch League, 2021
- A lawsuit hit the publisher, Activision Blizzard.
- T-Mobile, Coca-Cola and State Farm left within days or weeks.
- By early August, three official partners were left.
FaZe Clan went public at roughly $725M. When GameSquare bought it in 2024, more than 97% of that value was gone.
At listing
2024 sale
The obvious pushback
Rich owners?
A fair objection: T1 is backed by SK Telecom and Comcast Spectacor. Doesn’t a wealthy parent company work like an anchor?
I don’t think so. A parent can stop paying whenever it wants. A broadcast contract can’t.
Evil Geniuses, after PEAK6 bought it
- Tried to sell the team in 2023 and again in 2024
- Went through three rounds of layoffs
- Disbanded its roster
What I took away
Build the anchor first
Most esports teams are private and don’t publish their finances, so I worked from proxies: franchise fees, reported losses, and how often teams entered or quit.
Franchise leagues against open circuits like Dota 2, where anyone can qualify and no one buys a seat.
The full paper is about 5,000 words with 34 sources. Email me and I’ll send it: syan27@kis.ac
Download abstract (PDF) ← Back to site