Recently, Cloud9 shocked the eSports world by announcing that they would be fully transparent with the salaries of their new, star-studded Counter-Strike: Global Offensive roster, starting with the signing of Alex “ALEX” McMeekin, the star in-game leader that was formerly a part of the super-team Vitality. Henry Greer, the general manager of Cloud9 CS:GO, revealed that ALEX was signed to a 3 year, $1.65 million dollar contract. Yes, you heard that right: one MILLION dollars. However with more contracts in the foreseeable future to fill the 5-man roster, one perplexing question stands: how do eSports organizations afford these huge contracts?
Throughout the years, eSports has grown immensely, becoming an over billion dollar industry in 2019. While sponsorships and merchandise may make up some of revenue for eSports teams, their main backings are brand investments. In recent years, many big name celebrities such as Stephen Curry and Shaquille O’Neal have invested more than 30 million dollars into teams such as Team SoloMid and NRG. Considering the hundreds of millions of dollars some top eSports teams are worth, these investments seem like surefire moneymakers. However, currently there are almost no teams turning a profit, so why is so much money being invested?
There are two possible reasons why people may consider investing into eSports teams: their global popularity and potential for major growth. Competitive eSports has blossomed in the past few years to become one of the most popular activities in the world. In 2019, the “League of Legends” world championship held an average viewership of 21.8 million viewers from around the world, peaking at 44 million concurrent viewers. In comparison, the 2019 NBA finals between the Toronto Raptors and Golden State Warriors had an average of 15.14 million viewers. While this may not seem like a huge difference, League of Legends has only been out for 11 years while the NBA has been established for 75 years, showing the immense popularity that eSports games have garnered in a short amount of time. With such an exponential growth in popularity, investors are purchasing equity in teams in the hopes that these teams will grow greatly over time. In the digital age that the world lives in, eSports has the potential to grow and become bigger than ever before, surpassing what many people may consider “traditional sports.”