The orgs are media companies that happen to field teams

Fans track prize pools. Prize money is close to irrelevant to how an organisation actually funds itself.

Where the money comes from

Sponsorship, by a wide margin — peripherals, energy drinks, financial services, increasingly non-endemic brands. League revenue share in franchised circuits, which is stable and is the reason franchising was attractive despite the buy-in cost. Content and creator output, which for several orgs now exceeds competitive revenue. The streamers pay for the team. Merchandise, smaller but high margin.

Prize money typically splits with the players and covers a fraction of a roster’s annual cost.

Why that shapes decisions

If revenue is sponsorship and content, then reach matters more than trophies. An org with a mid-table roster and enormous social reach is in better financial health than a winning org with none.

This explains decisions that look sporting-irrational: signing a popular player over a better one, keeping a recognisable veteran, or entering a region for audience rather than for competitive depth.

The franchising correction

Several franchised leagues have seen valuations fall and slots returned. The buy-ins assumed a media-rights market that did not materialise on the expected timeline.

What to watch

Whether orgs are hiring content staff or competitive staff. That ratio tells you what business they think they are in, and it has been moving in one direction for years.

Reported at Esports Insider and Dexerto; analysis ours.