As we have seen previously in our post on electronic sports or eSports , these are becoming a worldwide phenomenon, so it is natural that it arouses the interest of many companies to enter this field . Whether founding your own club or acquiring stakes in some entities, no one wants to lose the opportunity to be part of this business that has been declared one of the most watched sports phenomena worldwide.

But what do we know about the eSports model? How is your business model different from a traditional club ? In this post, we are going to explain how an electronic sports club gets its funding, and for this we will use the comparison with a traditional sports club.

Retransmission rights

Most traditional clubs have broadcast rights from which they get most of the money for their organization. This is why it is something that eSports clubs are working on, building on their relationships with game developers and tournament organizers.

It’s one of the most controversial topics on the eSports scene. An example of this was when during 2016 certain teams asked the developer of the most famous electronic sport, League of Legends, to be able to process a distribution of income and broadcasting rights. To this, Riot Games, which is the developer, said no.

This dispute highlights the power that game publishers have over the teams that compete in their leagues. Therefore, one of the main differences between a traditional club and an eSports club is that an electronic sports team depends on someone who has the supreme power, that is, on the people who created and developed the game. Having to do what they say without being able to do anything in return.

It’s a key difference to keep in mind when thinking about the gaming industry. This will change when developers and event organizers give in and realize that for the model to work, it has to make sense to all stakeholders – players, teams, developers, and fans.

Sponsorships

95% of income in an esports club is based on endorsement deals. Although we are experiencing a rapid evolution of eSports, it is a reality that, if it were not for the sponsors, many of the clubs would disappear. In an eSports team, the fundamental part of the benefits depend on them, but since it is a sector that is in constant economic growth, many investors appear on the scene such as financial entities, sports or technology giants.

However, this type of investment carries a risk . A club that is at the top of the competitions, can disappear into the dark in milliseconds if it does not have a versatile and adequate organizational structure, since it is an area that is constantly changing.

In general, eSports teams depend more on one sponsor for survival than traditional sports teams. However, these first ones have not yet come close to what they want to achieve in terms of sponsorship but it is something they are working on to achieve it. To learn more about how to get a sponsor, visit our post how to get sponsors for your sports club.

Stadium and ticket sales

Last but not least, we have the income obtained from the sale of tickets. If it is true, that most of the traditional clubs have their own headquarters or place where they celebrate their sporting events and they profit from the sale of tickets. This is something that eSports clubs lack. They run their business in a more profitable way , that is, since everything is run online they compete from their gaming houses.

However, there are some competitions that are held from stadiums where their fans can go, but they are not from a club, but from eSports in particular. While traditional clubs profit from ticket sales, in eSports clubs that is something that cannot be observed yet.

The audience

It is one of the fundamental keys of this business, and it is the number of followers that are part of this phenomenon. There are many young people who every year get hooked to follow this type of sports. In an eSports club, 10% of the income is obtained from its followers, that is, from how involved the follower is with the team. This is one of the things they try to copy from traditional sports with the merchandising of the teams. T-shirts, sweatshirts, gaming peripherals with the face of their favorite player … all kinds of products that fans can buy and give direct income to the club.

However, they still have a long way to go as the electronic sports fan spends about $ 4 a year while in other traditional sports such as basketball the figure increases to about 15.

In conclusion, electronic sports still have a long way to go and consolidate. Although they are on a good path, they have to learn from the great traditional clubs in order to establish themselves as one of the star sports. However, they are already more watched and significant than many other sports, such as American football or tennis. Even so, they must continue working to advance and unseat the star sport, football.