Big sport reduces the salaries of players – should we expect such measures in e-sports?

The coronavirus pandemic has hit all walks of life, pausing the global economy. Especially under the new conditions, eSports has won – unlike traditional sports disciplines, gamers’ competitions can still be held online, gathering large audiences. To understand how eSports clubs deal with the pandemic and whether to expect a reduction in salaries in this industry, we turned to organizations from the CIS.

What is the difference between the work models of sports and e-sports clubs

Big sport suffered from the coronavirus epidemic at the beginning of March – even then all the major national federations decided to suspend the competition until its holding is safe for all participants. Representatives of the sports business considered various solutions to the problem: they proposed to complete the English Premier League alone by fixing the position of the teams, but canceling flights to the minor league; resume after coronavirus; play without spectators and even hold a marathon with daily matches.

Any of the options is better than downtime – while the season is on pause, the league and all its clubs are losing enormous money. For example, according to the calculations of the Daily Mail, Manchester United will lose 116 million pounds (± $ 143.8 million) if this year’s championship is not completed, and the total losses of the English teams will be about 1.137 billion pounds (± $ 1.410 billion). The amount consists of several factors: revenue from the sale of rights to TV broadcasts and income from the sale of tickets, paraphernalia and advertising rights.

For e-sports clubs, some of these revenue items are not available, including a key item from the budget of sports organizations – the sale of broadcast rights. Tournament operators in e-sports independently show their events (or transfer rights to local studios) and do not share the income from streams with teams. Ticket sales are also carried out by maintenance companies, so the teams’ profits are actually only the minimum percent of prize money and advertising contracts: participation in sponsorship events, sale of rights to player images and placement of banners on their sites.

The situation is different in franchise leagues: their organizers share the profit from showing matches with participating teams. In this format, the main Overwatch championship, the regional League of Legends championships and the Call of Duty league are held. However, in the CIS, these competitions are not popular with the audience.

Adapting to New Realities

Under normal circumstances, e-sports clubs are obviously losing to representatives of traditional sports in terms of profit – including because they have fewer sources of income. In the realities of the COVID-19 pandemic, the situation turned upside down: sports teams were in a difficult position, since they immediately lost almost all income items.

Because of this, even giants such as Juventus and Liverpool had to take drastic measures to survive the quarantine period without matches. The Italian club has already announced that it has agreed with the players to reduce their salaries for March, April, May and June 2023 – according to the information on the official website, this will save him about € 90 million. Many Russian clubs, for example, CSKA, made a similar decision. , Rubin and Spartak. “Rostov” and “Ural” refrained from such practice, but these are more likely exceptions that confirm the rule.

Such methods are still alien to eSports clubs – the Astralis Group in Denmark is still the only organization that took such measures. Russian clubs maintain a mode of operation – even in the conditions of “weekend” announced in the country. Organizations are able to participate in tournaments and produce various media content on a previous scale, making adjustments for logistics.

Most of the new problems that have arisen in connection with the virus are completely solvable. For example, the search for new formats, as traditional reporting essays became unavailable due to the lack of LAN tournaments. If before this organization worked according to the usual pattern, allowing the public to learn more about how the team lives during tournaments, now they will have to look for other reasons for showing players.

“Media” for e-sports teams is even more important than directly sporting results – if we talk exclusively about the budget. Most of the prize money won is taken by cybersportsmen, and the club commission in such cases is minimal. But the appearance of players on streams, in interviews and in other media formats allows organizations to more often show sponsor logos and develop their own brands.

This method of work, which lies at the heart of the e-sports business, is now being actively developed by professional athletes. So, many Formula 1 pilots have been participating in virtual Grand Prix since March, attracting millions of views, and football players are actively fighting in the local FIFA 20 championships.

The realities of eSports teams in the CIS

However, it must be borne in mind that the coronavirus pandemic also affected eSports sponsors. For example, betting companies had to reorganize their work taking into account new realities, as sports betting disappeared from circulation, and other companies’ incomes decreased with the transition of people to self-isolation and remote work.

To understand how this affected the business of e-sports organizations, we contacted representatives of clubs from the CIS. Virtus.pro, forZe and HellRaisers told Cybersport.ru about the current realities of the e-sports business. The press services of NAVI, Team Unique and Team Spirit could not provide an operational comment about possible reductions in the salaries of players, Gambit Esports did not discuss the situation.

VP VP Glamazda noted that the e-sports business is not at risk because of the current economic situation in the world. According to him, due to general isolation, tournament operators, who lost the opportunity to hold LAN events, were the first to suffer. Some of these competitions had to be canceled urgently, which created additional costs.

Glamazda also said that e-sports disciplines coped with the situation differently. More than others, Apex Legends suffered, which, according to CEO VP, was previously inferior to all competitive games in terms of e-sports. Due to COVID-19, the organizers canceled the “royal battle” major, and some organizations closed the line-ups to save money.

A representative forZe in a comment for Cybersport.ru noted that the coronavirus pandemic has opened up new opportunities for the industry. So, without great sport, many fans of football, basketball, car racing and other disciplines drew attention to the computer games industry.

During general isolation, forZe launched a joint FIFA 20 tournament with FC Spartak players, as well as many different promotions to attract the attention of a traditional sports audience. According to representatives of the organization, they expect that after resolving the situation with COVID-19, many fans of football and other sports will continue to support the eSports club. The organization also announced that it will soon make a loud announcement of an online project.

Aleksey Slabukhin, CEO of HellRaisers, noted that we can only evaluate the consequences of the current crisis in a couple of years. At the same time, CEO HR acknowledged that many offline companies today began to discover e-sports as another channel of communication with the audience.

At the same time, Slabukhin noted that 90% of such innovative companies are likely to stop experimenting with e-sports after the pandemic. However, if the remaining 10% replenish the sponsorship market of domestic e-sports, the industry will even be able to somehow win the situation with COVID-19.

There will be no abbreviations

At the same time, there is a possibility that eSports clubs will still have to think about reducing the salaries of players. If companies in large sports spend money on stadiums, training facilities and other infrastructure, then game teams payroll is almost the only expense. This deprives such organizations of flexibility – if the issue of budget savings arises before e-sports, then they can only reduce salaries.

All members of the Danish holding Astralis Group have already decided on such measures – players of the CS: GO roster of the same name, as well as LoL and FIFA teams will receive amounts 30% less than usual until the situation with the coronavirus is stabilized.

There is a risk for the players, and the difficulty here is that, unlike many athletes, there is no one to protect the interests of e-sportsmen. Members of the National Basketball League, Serie A and many other sports championships have corresponding unions.

Esports also has CSPPA, which is designed to defend the interests of players in CS: GO, but in fact it has no real influence on the market, for which it has been criticized by the community more than once. In addition, its leader Andreas Xyp9x Hoyslet already went for a salary reduction, as this was in the interests of his own organization. He can hardly now defend the opposite position in discussions with other clubs.

Because of this, cybersportsmen today are in limbo – if they are not satisfied with the requirements of the organization, they can only leave it. However, the current economic situation has affected all clubs, so it is unlikely that competitors will be able to offer the departed players more.

However, in the CIS the situation remains stable – HR, VP and forZe representatives assured Cybersport.ru that they are not going to resort to such decisions. Organizations are considering other ways to cut costs, but they plan to pay salaries to all employees in full – at least at this stage.

The e-sports industry in the epidemic was not only able to remain operational, but also received an important mission – in fact, it has become one of the few mass entertainment available to the general public. You can learn more about how this sphere has adapted to new realities in our material.