Yevhen Zolotarov, CEO of the team Natus Vincere, told about the financial side of having an esports team and making it profitable in his interview for cyber.sports.ru. We translated the key points.
Transfers in Dota 2
9pasha‘s transfer from VP to NAVI was probably the most expensive one in the history of NAVI‘s Dota 2. However, it wasn’t too much money, because he had only four months of his contract left.
I saw an article on your blog stating that EG bought RAMZES666 for 200 to 300 thousand dollars, and I can tell you that there are no numbers of that size in Dota 2. I think that the highest amount so far paid VP to get RodjER, and it happened because a transfer window was to close soon, so they wanted him urgently.
All in all, transfers in Dota 2 are usually several dozens thousand dollars, and on a rare occasion, they can be slightly over a hundred thousand. That happens because, unlike CS:GO, Dota 2 players see contracts as a nine months term from one The International to the next one. When it ends, many free agents appear, as well as players who have contracts but willing to leave the teams, so there is no reason for the teams to keep them. That is why we usually have quite a sensible transfer prices.
The prices didn’t change at all over the last five years. But the matchmaking became better, so I think that there are more good players now in Dota 2 comparing to the past years.
Transfers in CS:GO
In CS:GO, the transfers usually look more professional. Still, there are many problems, such as five-years long contracts without a buyout price so that they can require any amount. I’m fine when a team counts a reasonable price for the player and demands it. But it isn’t always like that. For example, the CEO of the team Crazy said that 250 thousand dollars for his players were a joke. Mind that we speak about the players who just participated in their first Major ever, and they didn’t even advance to the playoffs. Sure they have made some noise, but that isn’t yet a reason to demand so much.
Or look on G2 and Vitality. They are contenders, and even though one team doesn’t need a player, it isn’t willing him to the other one. And the transfer prices in CS:GO are way higher than in Dota 2.
Dendi, ex-Liquid, and their New Teams
I think that ex-Liquid players, who left the organization to make a new one, don’t really understand what they are doing. They seem to believe that a club was making huge money on them and keep bags of cash in the office. But in fact, I didn’t see them doing anything for media, sponsors, or content.
From the organization’s perspective, that roster was worth it for the image, and also mind a percent they received from the money the team won — usually, it is 10 to 20%. But Team Liquid made the right decision releasing them. I heard what size of a salary they wanted to get, and I can say that there is no possibility to make it profitable for the club.
I can wish luck to KuroKy because managing a club is not easy, especially when you don’t have a media weight. And I can’t say that there is a line of sponsors waiting in Dota 2.
Dendi has the same ming now, but unlike to Miracle- or KuroKy, he understands how does content-making work. And sponsors don’t look for just a subscriber amount — they need SMM, commercials and other activities. Also, Dendi is not going to be the CEO, as far as I know. Other people are helping him, they ask for my advice sometimes, and I’m trying to help.
There is a successful case: Puppey‘s team. So when I said that I think that ex-Liquid players made a wrong call, it didn’t mean that it can’t work. I’m just saying that they won’t get more money comparing to what they had in Liquid.
But Dendi doesn’t have money on the mind in the first place, but ambitions, and that is why I support him. They will have to become good at recruiting players and finding sponsors because a competitive Dota 2 team is worth 300 to 500 thousand dollars yearly.
The Ecosystem of Dota 2
I believe that the ecosystem in Dota 2 is a problem that is causing the state of players’ minds when they don’t care about the organization and only aim to win The International. It would make much more sense if Valve would keep the same amount of a prize pool, but gave half of it to tier-2 and tier-3 tournaments.
The Core Players
I don’t think we should overextend one player in the team disciplines. Even s1mple, even though he is the best player in the world, is just a part of a mechanism we call a CS:GO team, along with other components, such as a coach, a manager, an in-game leader, and so on. In Dota 2, it’s the same. A shot-caller is essential; the 4th position impacts on the early-game the most, and the core positions do the late-game. So you can’t tell there is a core player and he is only relevant.
Who Inflated the Esports Market
It is not worth it at all to buy the players for that high price. The market now is highly inflated because of such teams as G2, FaZe, crazy transfers such as Niko‘s, unreasonable salaries, and stickers royalty that players receive entirely. But 90% of the organization have realized already that it is not working because income doesn’t cover expenses.
It is not because of transfers but because of salaries. The top CS:GO teams spend 1,2 million dollars yearly, and up to 1,5 million. None of them make enough income to cover it.
Who was inflating the market? The clubs with investment money. But any investor will require a return someday, and for many of them, this day is coming. So salaries, as well as transfers, inevitably go down.